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Working Paper
Diversification and specialization of U.S. states
This paper documents the evolution of the international relationships of individual U.S. states along three dimensions: trade, migration, and finance. We examine how specialized or diversified state economies differ in terms of the products they export and with whom they trade, the origins of the immigrants who live in the state, and the origins of the foreign banks operating in the state. We show that states that are diversified along one of these dimensions are often quite specialized along others. New York is?perhaps, not surprisingly?the most diversified state in terms of global linkages.
Working Paper
The Postpandemic U.S. Immigration Surge: New Facts and Inflationary Implications
The U.S. experienced an extraordinary postpandemic surge in unauthorized immigration. This paper combines administrative data on border encounters and immigration court records with household survey data to document two new facts about these immigrants: They tend to be hand-to-mouth consumers and low-skilled workers that complement the existing workforce. We build these features into a model with capital, household heterogeneity and population growth to study the inflationary effects of this episode. Contrary to the popular view, we find little effect on inflation, as the increase in supply ...
Working Paper
The Postpandemic U.S. Immigration Surge: New Facts and Inflationary Implications
The U.S. experienced an extraordinary surge in immigration from 2021 to 2024, which triggered widespread discussions about its macroeconomic impact, particularly on inflation. To determine the impact of the immigration surge, we first document the salient features of these new immigrants: they are primarily low-skilled relative to the existing workforce and more likely to be hand-to-mouth consumers. We then incorporate these features into a heterogeneous agent model with capital-skill complementarity. We find that the supply- and demand-side effects of the immigration surge roughly cancel ...
Working Paper
Unauthorized Immigration and Fiscal Competition
Reflecting upon recent enforcement policy activism of US states and countries within the EU towards unauthorized workers, we examine the overlap of centralized (federal) and decentralized (state or regional) enforcement of immigration policies in a spatial context. Among other results, we find that if interstate mobility is costless, internal enforcement is overprovided, and border enforcement and local goods are underprovided when regions take more responsibility in deciding policies. This leads to higher levels of unauthorized immigration under decentralization. Interregional migration ...
Working Paper
Immigrant language barriers and house prices
Are language skills important in explaining the nexus between house prices and immigrant inflows? The language barrier hypothesis says immigrants from a non common language country value amenities more than immigrants from common language countries.> ; In turn, immigrants from non common language countries are less price sensitive to house price changes than immigrants from a common language country. Tests of the language barrier hypothesis with Swiss house prices show that an immigration inflow from a non common language country equal to 1 percent of an area's population is coincident with ...
Working Paper
Skilled Immigration Frictions as a Barrier for Young Firms
This paper studies the impact of skilled immigration policy frictions in the United States on technology-intensive firms by age cohorts. We use firm-level data and a general equilibrium model with endogenous firm entry and exit. The empirical results show that skilled immigration policy frictions directly influence young firm dynamics in technology-intensive sectors by affecting firm survival. Our general equilibrium model incorporates skilled foreign labor and immigration policy frictions that mimic the H-1B policy and matches the age distribution of firms in high-technology sectors, showing ...
Working Paper
The impact of migration on earnings inequality
This paper examines the impact of migration on earnings inequality using 1940?2015 data from the U.S. census and American Community Survey. Despite measurement challenges, I successfully replicate existing findings regarding national trends in earnings inequality and migration, and subsequently analyze regional and state patterns. Using 1940 birthplace information to instrument for migration, I find that recent immigration mildly increases the top decile earnings share, while recent in-migration and out-migration have no significant effects on such inequality. I estimate that immigration ...
Working Paper
Self-selection among undocumented immigrants from Mexico
This paper examines the effect of changes in migration determinants on the skill level of undocumented immigrants from Mexico. We focus on the effect of changes in economic conditions, migrant networks, and border enforcement on the educational attainment of Mexican-born men who cross the border illegally. Although previous research indicates that illegal aliens from Mexico tend to be unskilled relative to US natives and that economic conditions, networks and border enforcement affect the size of illegal immigrant flows across the border, the interaction of these variables has not been ...
Working Paper
Heterogeneous Capital Ownership, Partial Democracy and Political Support for Immigration
This paper analyzes and compares equilibrium immigration levels of some popular political economy models in the context of unequal capital holdings. We show that immigration rises (falls) with inequality in a limited (inclusive) democracy where only a small (large) fraction of the population has voting rights. Furthermore, we highlight the similarities between a campaign-contributions model and a partial-democracy model in terms of their predictions about immigration policy. In particular, we show that extension of voting rights in a partial democracy has qualitatively similar implications on ...