The Allocation of Immigrant Talent: Macroeconomic Implications for the U.S. and Across Countries

RePEc Short ID: pbi318
ORCID iD: 0000-0001-7323-1932

Birinci, Serdar; Leibovici, Fernando; See, Kurt

doi:10.20955/wp.2021.004

Working Paper Revision

The Allocation of Immigrant Talent: Macroeconomic Implications for the U.S. and Across Countries

Abstract: We quantify the macroeconomic costs of barriers to immigrant labor-market integration in the United States. We develop an occupational-choice model featuring natives and immigrants of multiple types who differ in productivity, preferences, and the wedges they face that distort occupational choices. Estimating the model with U.S. microdata, we find that immigrant barriers are sizable, especially for recent, non-fluent, and undocumented immigrants. Removing all barriers raises output by 1.5%. While targeted policies yield modest gains individually, jointly reducing barriers related to legal status, language, and the integration of recent immigrants delivers gains exceeding half of those achieved by removing all barriers.

JEL Classification: J24; J31; J61;

https://doi.org/10.20955/wp.2021.004