Abstract—This paper uses three years of individual-level data to analyze the determinants of individual preferences over immigration policy in the United States. We have two main empirical results. First, less-skilled workers are signi � cantly more likely to prefer limiting immigrant in � ows into the United States. Our � nding suggests that, over the time horizons that are relevant to individuals when evaluating immigration policy, individuals think that the U.S. economy absorbs immigrant in � ows at least partly by changing wages. Second, we � nd no evidence that the relationship between skills and immigration opinions is stronger in high-immigration communities. I.

Abstract. In this paper, I selectively review recent literature on illegal migration from Mexico to the United States. I begin by discussing methods for estimating stocks and flows of illegal migrants. While there is uncertainty about the size of the unauthorized population, new data sources make it possible to examine the composition of legal and illegal populations and the time-series covariates of illegal labor flows. I then consider the supply of and demand for illegal migrants. Wage differentials between the United States and Mexico are hardly a new phenomenon, yet illegal migration from Mexico did not reach high levels until recently. An increase in the relative size of Mexico’s workingage population, greater volatility in U.S.-Mexico relative wages, and changes in U.S. immigration policies are all candidate explanations for increasing labor flows from Mexico. Finally, I consider policies that regulate the cross-border flow of illegal migrants. While U.S. laws mandate that authorities prevent illegal entry and punish firms that hire unauthorized immigrants, these laws are imperfectly enforced. Lax enforcement may reflect political pressure by employers and other interests that favor open borders. I thank Roger Gordon for helpful comments and Jeff Lin and Maribel Pichardo for excellent research assistance. 1.

There are large differences in immigration (per capita) levels among rich OECD countries. In addition these differences are unrelated to the respective levels of income per capita and display a large persistence over time. Existing economic theories of immigration cannot explain these facts. This paper presents a dynamic political-economy model of immigration where agents choose an immigration policy at each period. In the model immigration poses a trade-off to the native voters. Wage gains from a given immigration policy need to be compared to its expected political costs (if any). The latter may arise because immigrants gain voting rights and their political preferences may be against those of the voters who let them in. The equilibrium can be characterized analytically. Immigration is shown to depend crucially on the degree of intergenerational mobility in skills in the economy. When mobility is low the political effects of immigration determine the policy whereas for high mobility the wage motive dominates. For some parameters the model produces immigration patterns that resemble those present in the data. In the last section I plan to test whether the model provides an answer to the empirical puzzle. ∗ I am greatly indebted to Jess Benhabib for his patient role as my advisor and to Alberto Bisin for tons of help. Also, I have greatly benefited from discussions with Sophie Bade, Joan

The purpose of this paper is to explain the attitudes toward immigration and the formation of immigration policy in a small open economy setting including a non-traded sector and imperfect labour mobility across sectors. The direct democracy approach is used to transmit voters ’ attitudes into immigration policy. I find that the voters regardless of their skill level will be opposed to the inflow of low-skilled immigration and will favor high-skilled immigration, if the domestic non-traded and imported goods are poor substitutes in consumption. If the degree of substitution is between non-traded and imported good is sufficiently high, a country with a high-skilled (low-skilled) median voter will be favorable (opposed) to both low-skilled and high-skilled immigrants. At an economy wide level, higher skill level of voters makes them more tolerant towards immigration.

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We ask what level of migration would maximize world welfare. Welfare is assumed to be a weighted average of the utilities of the world’s various citizens, but the weights are also country specific. Using a calibrated one-sector model we find that unless the weights are heavily biased towards the natives of rich countries, the extent of migration that would be optimal far exceeds the levels observed today. The claim remains true in a two-sector extension of the model. All versions of the model assume that migration is the only redistributive tool.

While anecdotal evidence suggests that interest groups play a key role in shaping immigration, there is no systematic empirical evidence on this issue. To motivate our analysis, we develop a simple theoretical model where migration policy is the result of the interaction between organized groups with conflicting interests towards labor flows. We evaluate the key predictions of the model using a new, industry-level dataset from the United States that we construct by combining information on the total number of immigrants and H1B visas with data on lobbying expenditures associated with immigration. We find robust evidence that both pro- and anti-immigration interest groups play a statistically significant and economically relevant role in shaping migration across sectors. Barriers to migration are lower in sectors in which business lobbies incur larger lobbying expenditures and higher in sectors where labor unions are more important. JEL classification: F22, J61.

In the political-economy debate people express the idea that immigrants are good because they can help pay for the old, thus help sustaining the social security system. In addition, the median voter whose income derives from wages will wish to keep out the immigrants who will depress his/her wage. Therefore the decisive voter will keep migrants out. The paper addresses these two accepted propositions. For this purpose we develop an OLG political economy model of social security and migration to explore how migration policy and a pay-as-you-go (PAYG) social security system are jointly determined. The sub-game perfect Markov, depends on the different patterns of fertility rates among native born and migrants. Our analysis demonstrates that a social security system may change the first proposition significantly because the median voter may opt to bring in migrants to help him/her during retirement. As for the second proposition we get a significantly nuanced version. Not always immigration helps sustain the social security. 1

towards immigration:

The domestic politics of international trade seem to differ in fundamental ways from the domestic politics of immigration, but it is difficult to say exactly how and, more importantly, why. This paper uses a common frame of reference, simple endogenous policy models, as a way into this issue. These models capture the essential insight underlying much political economy analysis that material interests drive policy preferences. Part of the claim made in this paper is that trade politics appear to be essentially about material interest, while immigration politics are not. Related to this claim, however, is the complementary claim that the politics of these two seemingly similar issues are also organized in fundamentally different ways. The argument proceeds in five parts. The first part describes the general structure of endogenous policy models; the second provides a brief overview of theoretical and empirical work on trade; the third provides a similar overview of contemporary research on immigration politics; the fourth compares the political structures of the politics in these two domains; the fifth section concludes. I. What are Endogenous Policy Models, and What Are They For? Endogenous policy models formalize the notion, widely applied for virtually as long as there has been systematic study of economic policy, that material self-interest has a sizable effect