The Impact of Imigration on American Labor Markets Prior to the Quotas

Current debate on the impact and assimilation of immigrants into the American labor market sounds remarkably like the debate which eventually triggered the imposition of the quotas in the 1920s. Then as now observers failed to agree on exactly what the impact of the mass migration was on labor markets. Despite its relevance to current discussion, there has been almost no quantitative effort to assess late nineteenth century impact, while instead analysis has been obsessed with assimilation issues. This paper redresses this imbalance by confronting three macro-impact questions that are just as relevant today as they were almost a century ago: Did late nineteenth century American immigrants act as a flexible (guestworker) labor supply? Did they flow into occupations where job creation was fast, or did they displace natives in occupations where job creation was slow? Did immigrants reduce the growth of wages and living standards for natives while increasing their unemployment? We use econometrics and computable general equilibrium models to get surprising and unambiguous answers.