Date of Award

Fall 2023

Project Type

Dissertation

Program or Major

Economics

Degree Name

Doctor of Philosophy

First Advisor

Loris Rubini

Second Advisor

Bruce Elmslie

Third Advisor

Karen Conway

Abstract

This dissertation examines the impacts of immigration on the domestic labor market in theUnited States and its interaction with international trade of goods by domestic industries. The dissertation contributes to two distinct strands of literature, literature on the welfare effects of immigration focusing on the changes in immigration in the United States since the election of President Trump, and the literature on immigration-trade linkages, focusing on the role of immigrants in the United States in absorbing adverse trade shocks to the economy as well as their role in generating positive trade for the economy. This dissertation offers sufficient support for the reader’s arguments in three pieces about how immigration benefits the host economy and why restricting immigration is not best for a nation like the United States.

The first essay examines how the decline in immigration to the United States following2016 has affected the welfare of domestic workers. The three channels of complementarities, substitutabilities, and number of variations created are the main areas of focus in relation to effects on natives. In order to accomplish this, the first essay constructs a model of immigration with four different worker types: high-skilled natives, high-skilled immigrants, low-skilled natives, and low-skilled immigrants. The model is then calibrated to match significant data from 2010 to 2019 in the United States. It has been shown through counterfactual analysis that between 2016 and 2019, the loss of immigrants decreased total native consumption by 0.32 percentage points. The complementarity with low-skilled workers was the key factor in why natives with high levels of competence lost the greatest ground or roughly 0.45 percentage points. However, even low-skilled native workers experienced a loss of 0.04 percentage points since the benefits of increased variety outweigh the drawbacks of increased competition from immigrant workers.

The second essay analyzes how rising trade between China and the US has affectedimmigrant workers in the US. Previous research has demonstrated that this trade shifted production away from low-skilled manufacturing industries and toward other industries that require a lot of human capital. Native labor may, however, fall behind the shifting labor market due to the high expense of retraining. The study examines whether domestic businesses hire immigrants to fill growing demand until local labor can keep up with it. The essay investigates the effects of increased imports from China between 1990 and 2014 on immigrant employment classified into STEM and non-STEM occupational employment, which are representations of human capital intensity. It does this by using the measure of import exposure from the literature. Overall, it has been shown that exposure to Chinese imports increases the number of jobs for immigrants. Since China’s entry into the WTO in 2001, the immigrant employment share in the working-age population has increased in both manufacturing and non-manufacturing sectors by 0.02 and 0.03 percentage points, respectively. For non-STEM occupations, however, import exposure has also increased the immigrant job growth rate outside of manufacturing over the same time period. The results indicate that while immigrants may have short-term contributions to reducing the detrimental employment effects of import exposure in manufacturing for both STEM and non-STEM jobs, aggregate job losses for manufacturing workers persist over the long term regardless of the nativity.

In the third essay, the impact of immigrants on US manufacturing industries’ industry-levelexports are examined. The study determines the causal impact of immigrants on exports between 2005 and 2014 using variations in immigrant employment at the occupation level across US manufacturing industries. Increased trade is hypothesized to result from network effects that lower the knowledge cost of foreign markets, according to the pro-trade effect of immigration theory. This essay makes the claim that because they have better access to decision-making processes and are better able to build business relationships with trading partners, immigrants are better able to generate trade when they work in managerial and corporate-level positions as opposed to those at the operation or production level. Accordingly, occupations are categorized in a way that takes these variances into account. It has been shown that exports at the industry level are increasing the immigrant share in managerial and cognitive jobs while decreasing the immigrant share in operational and manual occupations using an instrumental variable technique compatible with the immigrant enclave approach. While hiring more immigrants as machine operators or maintenance employees reduces exports by around 3%, hiring more immigrants as managers enhances exports by about 10%.

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