Capitalizing on Immigration
The Economic Impact of Mass Deportations
Javier Cravino et al.
NBER Working Paper, February 2026
Abstract:
This paper quantifies the effects of large-scale deportations on wages, prices, and real incomes in the United States. We impute the legal status for each worker in the American Community Survey by combining detailed individual information with group-level visa records. In 2024, 3.2% of US workers were unauthorized, but some regions and sectors were heavily dependent on unauthorized immigrant labor. We develop a dynamic quantitative framework with multiple regions, sectors and occupations, heterogeneous workers, and endogenous capital accumulation to study the economic impacts of removing unauthorized workers. We derive analytical expressions relating region- and occupation-specific real wages and sectoral relative prices to changes in the supply of immigrant workers, observable factor shares, and combinations of structural elasticities. Following the removal of 50% of unauthorized immigrants, in the short run average native real wages rise 0.15% nationally, driven by an increase in the capital-labor ratio. In the long run, however, native real wages fall in every state, and by 0.33% nationally, as capital gets decumulated in response to a lower population. Consumer prices in the sectors intensive in unauthorized workers -- such as Farming -- rise by about 1% relative to the price of the average consumption basket, while most other sectors experience negligible relative price changes.
The socioeconomic returns to citizenship: A randomized controlled trial
Jens Hainmueller et al.
Proceedings of the National Academy of Sciences, 3 February 2026
Abstract:
Based on observational studies, conventional wisdom suggests that citizenship carries economic benefits. We leverage a randomized experiment from New York where low-income registrants with permanent residency who wanted to become citizens entered a lottery to receive fee vouchers to naturalize. Voucher recipients were about 36 p.p. more likely to naturalize. Yet, we find no discernible effects of access to citizenship on multiple economic outcomes, including income, credit scores, access to credit, financial distress, and employment. Leveraging a multidimensional immigrant integration index, we similarly find no measurable effects on noneconomic integration. However, we do find that citizenship reduces fears of deportation. Explaining divergence from past studies, our results also reveal evidence of positive selection into citizenship, suggesting that observational studies are susceptible to selection bias.
The Vanishing Wage Effect: Immigration, Task Prices, and Endogenous College Major Choice in General Equilibrium
Jessie Dickens & Samson Shen
University of Minnesota Working Paper, March 2026
Abstract:
We develop and estimate a dynamic general equilibrium model in which forward-looking students choose college majors in response to immigration-induced task price movements. Our framework closes the loop between immigrant labor supply, education decisions, and future native wages. We show that endogenous native reallocation not only offsets but more than fully reverses the partial-equilibrium wage effect of immigration, generating long-run wage responses that differ sharply from static estimates. The overshooting reflects substantial task complementarity, which amplifies education reallocation relative to the direct wage channel. A leave-one-task-out decomposition reveals that the adjustment is driven entirely by divergence between interpersonal and IT task prices, a dimension absent from standard cognitive/manual frameworks.
Immigration Restrictions and Natives' Intergenerational Mobility: Evidence from the 1920s US Quota Acts
James Feigenbaum et al.
NBER Working Paper, January 2026
Abstract:
We study the effects of immigration restrictions on the intergenerational mobility of US-born men in the United States. We link US-born sons observed in 1900, 1920, and 1940 full-count Censuses to their fathers, and construct a measure of county-level exposure to the 1920s immigration acts, which sharply curtailed immigration from Southern and Eastern Europe. Exploiting this policy-induced variation, we find that the quotas reduced intergenerational mobility among US-born white men, but had no adverse effect for Black men. Among whites, losses were smaller for sons of richer fathers, who were more likely to migrate away from highly exposed areas. Evidence from the 1940 Census indicates that exposed white men were less likely to be employed and earned lower wages in adulthood, consistent with both occupational downgrading and reduced productivity within occupations. We show that these effects operated through both reduced immigrant-native complementarities and incomplete substitution from unrestricted migration, while human capital investment can explain at most only a modest part of the total effect.
When Border Control Formalizes Labor: Evidence from Texas's Operation Lone Star
Li Gan, Manuel Hernandez & Yike Zhang
Texas A&M University Working Paper, January 2026
Abstract:
This paper examines the complementarity between border control and legal migrant labor. Using administrative data on H-2A certifications from 2015 to 2025, we exploit the geographic concentration of Texas's Operation Lone Star (OLS) to study how intensified border enforcement affects employers' reliance on certified H-2A workers in agriculture. We find a large and persistent increase in H-2A certifications in border counties, which were more exposed to enforcement activity, following the policy's implementation, relative to interior counties. Complementary analyses show that the increase in certified workers was accompanied by a similar rise in employer applications, indicating greater reliance on the H-2A program rather than changes in certification or approval practices. At the same time, we find no evidence that intensified border enforcement coincided with contractions in agricultural production, land values, or total farm employment, or with broader changes in local economic conditions. Instead, the results are consistent with firms adjusting their hiring practices toward formal labor channels in response to heightened enforcement pressure. Overall, the findings imply that in high-enforcement contexts, border controls and guest worker programs function as policy complements, strengthening firms' incentives to utilize legal migration pathways and formalize labor use without displacing production.
How Immigrants and Racial Segregation Affect Immigration Attitudes
Chuang Chen
Political Behavior, forthcoming
Abstract:
Do immigrant presence and racial segregation affect different individuals' attitudes toward immigration? There is a controversy in previous literature about whether more immigrants lead to more or less anti-immigration attitudes. I argue that the disagreement is because they ignore the degree to which the immigrants (and other minorities) are segregated. In the U.S. context, I hypothesize that for conservatives, higher immigrant/racial segregation is related to more pro-immigration attitudes because a lack of intergroup communication functions as a "shield" against more salient group membership and substantial prejudice against the outgroups. With data covering five presidential elections in 2008-2024 from the U.S. Census, American Community Survey, and Cooperative Election Study, I use Bayesian multilevel linear regressions with immigration attitudes as DV. Most results support the hypothesis. This paper contributes to immigration politics by comparing the different effects of immigrant presence and racial segregation interacting with ideology and providing a modified version of the threat theory in explaining the divergent effects of racial segregation on liberals' and conservatives' immigration attitudes.
The H-1B Wage Gap, Visa Fees, and Employer Demand
George Borjas
NBER Working Paper, March 2026
Abstract:
The H-1B program lets firms hire high-skill foreign workers for a six-year term. The annual number of visas allocated to for-profit firms is capped at 85,000 and there is excess demand for those visas. The analysis merges administrative data, including the I- 129 petitions that report the wage offer made to specific H-1B beneficiaries, with the American Community Surveys. On average, H-1B workers earn 15 percent less than comparable natives, suggesting that firms may be willing to pay a one-time fee to obtain the visas. The data are examined using a labor demand model to simulate how a fee alters the hiring decision. For moderate levels of excess demand, the revenue maximizing fee ranges from $97,000 to $154,000 after allowing for unobserved productivity gains or costs associated with an H-1B hire, and for wage growth and job turnover in the H-1B workforce. The fee also changes the skill composition of that workforce, making it more skilled.
Immigration and serious gang violence: Assessing the immigrant revitalization thesis on urban gang shootings
Calvin Proffit, John Leverso & Ben Feldmeyer
Journal of Criminal Justice, March-April 2026
Abstract:
Over the past few decades, extensive empirical evidence has supported the immigrant revitalization thesis, demonstrating that immigration is often associated with reductions in community crime. However, debate over the relationship between immigration and crime has increasingly grown in public and political discourse with many politicians claiming immigration fuels gang violence. Yet remarkably little research has examined immigration effects on serious gang violence, despite pervasive rhetoric suggesting that immigration adds to gang crime. The current study addresses this gap in the research by examining the association between immigration, fatal, and nonfatal gang shootings across 77 Chicago community areas during the 2010-2021 period, using fixed effects negative binomial models. Findings suggest immigration is unrelated to increasing gang violence in Chicago neighborhoods but serves as a strong protective force against these forms of serious violence when they are unrelated to gang activity. Together, these findings challenge contemporary claims that immigration contributes to serious gang violence and reinforces the importance of distinguishing gang and non-gang violence when evaluating the crime consequences of immigration.