Determining a Positive Causal Relationship of Immigration on Living Standards
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Determining a Positive Causal Relationship of Immigration on Living Standards Jessica Zhu 1
& William
Pulleyblank 1
# This is a U.S. Government work and not under copyright protection in the US; foreign copyright protection may apply 2019
Abstract This project investigates the complex relationship between American citizens and America’s forty million plus immigrants by analyzing changes in the living standards of native-born Americans versus the immigrant population size. We aggregate data collected from the American Community Survey’s Public Use Microdata Samples from 2010 to 2015 at the Public Use Microdata Area level. Using the method of instrumental variables, we assess if and how immigrants affect the living standards of native-born Americans. With the number of ports of entry per state as the instrument, we find preliminary evidence to suggest a positive causal, not just correlational, relationship between percent of immigrants in an area and the average living standard of the area’s native-born citizens. As data availability improves, our methodology will allow for a stronger case to support a causal relationship between immigration and American living standards. It has the potential to provide data-driven policy recommendations that improve the economic opportunities of native-born citizens while also supporting immigration. Keywords Immigration . Policies . Economy . Living standards . Income . Causation
Introduction Immigrants have shaped the cultural and economic landscape of the USA ever since the nation’s birth in 1776. Although often termed a “nation of immigrants,” the USA began limiting immigration early in its history. It began screening immigrants in the 1870s to exclude prostitutes and criminals. Then, in 1882, it went on to ban Chinese immigrants, with the Chinese Exclusion Act, and mentally disabled people. The USA also created
* Jessica Zhu [email protected]
1
Department of Mathematical Sciences, United States Military Academy, West Point, NY, USA
Zhu J., Pulleyblank W.
an immigration system to standardize this process with the Immigration Act of 1882. It created a tax per immigrant entry and further restrictions targeting criminals and persons with mental illnesses. Since then, restrictions and procedures have only increased as the federal government has attempted to affect the “quality” of its residents by keeping out people with “undesirable characteristics and inexpensive labor” (Briggs 2003). The government was, and still is, primarily trying to protect its definition of the national interest by operating under the assumption that certain immigrant characteristics are better for the nation than others. Unsurprisingly, the forty million plus immigrants living in America today significantly influence the lives of everyone around them. In fact, at least one quarter of the US population are either immigrants or the children of immigrants (Batolova and Zong 2016). As the National Academies of Sciences writes, “Not only does immigration affect the environment in which everyone liv
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