Immigration policy debates often suggest a different treatment of immigrants based on education level – research suggests that this may not be warranted.
Well put. I'd still guess that in general the higher paid the immigrant the greater the benefit, but a) that does not exclude non-degree holders and b) there is not reason to trae one off against the other.
Thank you for the comment! You raise some good questions (some of which I may answer in another article).
>>Furthermore, the paper does nothing to study the effects on the market if all firms were faced with the inability to access H2-B labor.<<
I don't think such a study is actually feasible from an empirical perspective, because you would need to compare it to a counterfactual society where there are H-2Bs available. From a theoretical perspective (which I will touch upon in one of my upcoming articles), this boils down to an 'autarky' world (i.e. all production is done internally). One issue that immediately arises is that besides technological innovation, firms will often choose to move abroad for production (which I discussed in my previous article on H-1Bs) if trade is open.
The comparison between firms that win the lottery vs the firms that lose the lottery is probably the best empirical way to get at this question. The evidence shows us that there are no differences in domestic hiring on whether one wins or doesn't win the lottery (if anything, winning the lottery appears to crowd-in domestic workers - i.e. increase the numbers of domestic workers hired. We see a similar pattern for H-1Bs also).
>>It can be abstracted 100x over, but it's silly to suggest these groups of people are somehow 0% substitutes for one another. <<
No economist argues the substituability is 0%. The question is how substitutable are these workers. Commonly, it is thought to be high, but empirically it appears to be actually quite low. Moreover, the studies I referenced here, and I agree with you, are 'narrow' (i.e. partial equilibrium). We do not observe the impacts of any spill-overs into the creation of other jobs that may be driven by the fact that immigrants come in. The number of jobs available is not fixed and it is a function of immigrants (among other factors). Basically the question is does the 'income effect' dominate/offset the 'substitution effect'. Research appears to show that it does.
>>Look what happened in 2021...<<
I don't necessarily agree with the causality here. To me (and this is also a guess), the stronger welfare protections that were implemented during Covid (longer UI, additional benefits such as SNAP, EITC and CTC etc) allowed workers to be more 'picky' with the job they chose. That is, they had more ability to wait for a job that is a better match for them (and for the firm). This resulted in very high GDP growth (better firm and job matches) as well as strong real wage growth on the low wage part of the distribution (matching with a better firm typically results in higher wages). If it was just retirement/dropping out of labor market, I don't think we would see strong GDP growth since output would remain the same (each dropped out worker would be replaced by another worker, producing the same output, while receiving a higher wage.)
Well put. I'd still guess that in general the higher paid the immigrant the greater the benefit, but a) that does not exclude non-degree holders and b) there is not reason to trae one off against the other.
Thank you for the comment! You raise some good questions (some of which I may answer in another article).
>>Furthermore, the paper does nothing to study the effects on the market if all firms were faced with the inability to access H2-B labor.<<
I don't think such a study is actually feasible from an empirical perspective, because you would need to compare it to a counterfactual society where there are H-2Bs available. From a theoretical perspective (which I will touch upon in one of my upcoming articles), this boils down to an 'autarky' world (i.e. all production is done internally). One issue that immediately arises is that besides technological innovation, firms will often choose to move abroad for production (which I discussed in my previous article on H-1Bs) if trade is open.
The comparison between firms that win the lottery vs the firms that lose the lottery is probably the best empirical way to get at this question. The evidence shows us that there are no differences in domestic hiring on whether one wins or doesn't win the lottery (if anything, winning the lottery appears to crowd-in domestic workers - i.e. increase the numbers of domestic workers hired. We see a similar pattern for H-1Bs also).
>>It can be abstracted 100x over, but it's silly to suggest these groups of people are somehow 0% substitutes for one another. <<
No economist argues the substituability is 0%. The question is how substitutable are these workers. Commonly, it is thought to be high, but empirically it appears to be actually quite low. Moreover, the studies I referenced here, and I agree with you, are 'narrow' (i.e. partial equilibrium). We do not observe the impacts of any spill-overs into the creation of other jobs that may be driven by the fact that immigrants come in. The number of jobs available is not fixed and it is a function of immigrants (among other factors). Basically the question is does the 'income effect' dominate/offset the 'substitution effect'. Research appears to show that it does.
>>Look what happened in 2021...<<
I don't necessarily agree with the causality here. To me (and this is also a guess), the stronger welfare protections that were implemented during Covid (longer UI, additional benefits such as SNAP, EITC and CTC etc) allowed workers to be more 'picky' with the job they chose. That is, they had more ability to wait for a job that is a better match for them (and for the firm). This resulted in very high GDP growth (better firm and job matches) as well as strong real wage growth on the low wage part of the distribution (matching with a better firm typically results in higher wages). If it was just retirement/dropping out of labor market, I don't think we would see strong GDP growth since output would remain the same (each dropped out worker would be replaced by another worker, producing the same output, while receiving a higher wage.)
Appreciate the comment!