Headwind for the boatlift?

In 1980, Fidel Castro suddenly allowed thousands of Cubans to leave the country—if they could find a way out. Americans, many of Cuban extraction, swooped to the rescue by bringing lots of boats to the Cuban Port of Mariel. It was called the Mariel boatlift. Some 125,000 Cubans moved to America in a matter of months and perhaps half settled in Miami. Some 10 years later, economist David Card viewed the Mariel boatlift as a natural experiment and used it to study how immigration affects wages and employment in the receiving country. He concluded there was not much discernible impact in Miami. His paper is seminal, both for its counterintuitive finding and for its introduction of the natural-experiment approach to the study of immigration’s impacts. Last month, George Borjas, an economist and Cuban emigré himself, revisited the data and came to opposite to conclusion from Card’s. The boatlift hurt the wages of low-education Miamians. So I dug into the data. Borjas’s work ended up not convincing me. More on the GiveWell...

The domestic economic impacts of immigration

My client GiveWell, working closely with the foundation Good Ventures through the Open Philanthropy Project, is seriously considering labor mobility as a cause to which Good Ventures should commit resources: It appears to us that moving from a lower-income country to a higher-income country can bring about enormous increases in a person’s income (e.g., multiplying it several-fold), dwarfing the effect of any direct-aid intervention we’re aware of. But there are worries: Does letting more workers into a wealthy country take jobs from people already working there? Or does the competition for jobs reduce wages all around? These possibilities are a particular concern as they apply to low-skill workers, who are poorer. For due diligence, GiveWell hired me to review the evidence on the potential side effects of immigration. Here is my full report, ready for comments from anyone. To read my conclusion, skim down to the bullet points. The immigration policies of wealthy nations could be prime leverage points for Good Ventures. “Observably identical” people—ones with the same education, age, sex, and so on—earn 2.0–15.5 times more in the United States than in poor countries such as Peru, Haiti, Egypt, and Yemen (Clemens, Montenegro, and Pritchett 2008). Allowing more low-income foreigners to work in wealthy nations could therefore raise their incomes more than almost any other step that governments or philanthropists can take.1 But there is a concern: Does allowing more immigration take jobs from people already in the labor force of the receiving country? Or does it depress their pay? This document performs due diligence on this question, especially as it pertains to low-skill workers in the receiving...