Inside Calculations

Kevin Lewis

February 20, 2024

The Indirect Fiscal Benefits of Low-Skilled Immigration
Mark Colas & Dominik Sachs
American Economic Journal: Economic Policy, forthcoming 


Low-skilled immigrants indirectly affect public finances through their effect on resident wages & labor supply. We operationalize this indirect fiscal effect in a model of immigration and the labor market. We derive closed-form expressions for this effect in terms of estimable statistics. An empirical quantification for the U.S. reveals an indirect fiscal benefit for one average low-skilled immigrant of roughly $750 annually. The indirect fiscal benefit may outweigh the negative direct fiscal effect that has previously been documented. This challenges the perception of low-skilled immigration as a fiscal burden.

Scientific Talent Leaks Out of Funding Gaps
Wei Yang Tham et al.
Harvard Working Paper, February 2024


We study how delays in NIH grant funding affect the career outcomes of research personnel. Using comprehensive earnings and tax records linked to university transaction data along with a difference-in-differences design, we find that a funding interruption of more than 30 days has a substantial effect on job placements for personnel who work in labs with a single NIH R01 research grant, including a 3 percentage point (40%) increase in the probability of not working in the US. Incorporating information from the full 2020 Decennial Census and data on publications, we find that about half of those induced into nonemployment appear to permanently leave the US and are 90% less likely to publish in a given year, with even larger impacts for trainees (postdocs and graduate students). Among personnel who continue to work in the US, we find that interrupted personnel earn 20% less than their continuously-funded peers, with the largest declines concentrated among trainees and other non-faculty personnel (such as staff and undergraduates). Overall, funding delays account for about 5% of US nonemployment in our data, indicating that they have a meaningful effect on the scientific labor force at the national level.

Trick or treat? The Brexit effect on immigrants' mental health in the United Kingdom
Cinzia Rienzo
European Economic Review, February 2024 


This paper investigates changes in the mental health of immigrants living in the United Kingdom (UK) during the European Union (EU) referendum. Using the UK Household Longitudinal Study, this paper assesses how the mental health of immigrants has changed before and after the referendum, compared to natives. Findings suggest that following the EU referendum result, mental health significantly improved overall for naturalised immigrants as a whole and for non-EU immigrants, relative to the changes in natives. Further, there is no evidence that mental health worsened even for EU immigrants. Our results vary by gender, with non-EU women experiencing a statistically significant improvement in mental health. The results are robust to several checks, including using balanced panel data and individual fixed effects. Our findings are consistent with the idea that the end of free movement for EU immigrants has alleviated the perception of discrimination against non-EU immigrants. This interpretation is supported by empirical results from a multinomial logit showing that non-EU migrants, particularly women, are more likely to perceive discrimination for race-related reasons when denied a job, an effect which is no longer significant in the post-referendum period.

Immigrant Communities and Knowledge Spillovers: Danish Americans and the Development of the Dairy Industry in the United States
Nina Boberg-Fazlić & Paul Sharp
American Economic Journal: Macroeconomics, January 2024, Pages 102-146 


Despite the growing literature on the impact of immigration, little is known about the role existing migrant settlements can play for knowledge transmission and the location of industry. We present a case that can illustrate this important mechanism and hypothesize that nineteenth-century Danish American communities helped spread knowledge on modern dairying to rural America. From around 1880 Denmark developed rapidly, and by 1890 it was a world-leading dairy producer. Using a difference-in-differences strategy and data taken from the US census and Danish emigration archives, we find that counties with more Danes in 1880 subsequently both specialized in dairying and used more modern practices.

Homeward Bound: How Migrants Seek Out Familiar Climates
Marguerite Obolensky, Marco Tabellini & Charles Taylor
NBER Working Paper, January 2024


This paper introduces the concept of "climate matching" as a driver of migration and establishes several new results. First, we show that climate strongly predicts the spatial distribution of immigrants in the US, both historically (1880) and more recently (2015), whereby movers select destinations with climates similar to their place of origin. Second, we analyze historical flows of German, Norwegian, and domestic migrants in the US and document that climate sorting also holds within countries. Third, we exploit variation in the long-run change in average US climate from 1900 to 2019 and find that migration increased more between locations whose climate converged. Fourth, we verify that results are not driven by the persistence of ethnic networks or other confounders, and provide evidence for two complementary mechanisms: climate-specific human capital and climate as amenity. Fifth, we back out the value of climate similarity by: i) exploiting the Homestead Act, a historical policy that changed relative land prices; and, ii) examining the relationship between climate mismatch and mortality. Finally, we project how climate change shapes the geography of US population growth by altering migration patterns, both historically and into the 21st century.

Why (Some) Immigrants Resist Assimilation: US Racism and the African Immigrant Experience
Claire Adida & Amanda Lea Robinson
Quarterly Journal of Political Science, Summer 2023, Pages 295-338 


Scholarship shows that Black immigrants to the United States resist assimilation to reduce exposure to racial discrimination faced by U.S.-born African Americans. But, not all Black immigrants are equally likely to be (mis)perceived as African American. We argue that immigrants who are likely to be misidentified as African American have incentives to reify ethnic boundaries as a form of protection against racial discrimination. We develop this argument from interviews and focus groups with African immigrants. We then use a lab experiment to measure rates of miscategorization and identify its correlates among African immigrants. Finally, we test our argument with a novel survey of Somalis, an immigrant population with two ethnic subgroups who differ in their likelihood of being miscategorized as African Americans. We show that this difference shapes the degree of resistance to assimilation. These findings improve our understanding of the relationship between racial discrimination and incentives for Black immigrants to resist assimilation.

Migrants at Sea: Unintended Consequences of Search and Rescue Operations
Claudio Deiana, Vikram Maheshri & Giovanni Mastrobuoni
American Economic Journal: Economic Policy, forthcoming 


Many developed countries currently both face and resist strong migratory pressure, fueling irregular migration. The Central Mediterranean Sea is among the most dangerous crossings for irregular migrants in the world. In response to mounting deaths, European nations intensified search and rescue operations in 2013. We develop a model of irregular migration to identify the effects of these operations. Leveraging exogenous variation from rapidly varying crossing conditions, we find that smugglers responded by sending boats in adverse weather and shifting from seaworthy boats to flimsy rafts. As a result, these operations induced more crossings in dangerous conditions, ultimately offsetting their intended safety benefits due to moral hazard and increasing the realized ex post crossing risk for migrants. Despite the increased risk, these operations likely increased aggregate migrant welfare; nevertheless, a more successful policy should instead restrict the supply of rafts and expand legal alternatives for migration.

Age at Immigrant Arrival and Career Mobility: Evidence from Vietnamese Refugee Migration and the Amerasian Homecoming Act
Sari Pekkala Kerr, William Kerr & Kendall Smith
NBER Working Paper, January 2024 


We study the long-run career mobility of young immigrants, mostly refugees, from Vietnam who moved to the United States during 1989-1995. This third and final migration wave of young Vietnamese immigrants was sparked by unexpected events that culminated in the Amerasian Homecoming Act. Characteristics of the wave also minimized selection effects regarding who migrated. Small differences in the age at arrival, specifically being 14-17 years old on entry compared to 18-21, resulted in substantial differences in future economic outcomes. Using Census Bureau data, we characterize the different career profiles of young vs. older immigrants, and we quantify explanatory factors like education, language fluency, and persistence from initial employers.


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