Where are the Winners - Princeton University · Where are the Winners: The Determinants of US Immigration Policy, 1795-2008 Margaret E. Peters Stanford University November 13, 2009

Puzzle Data and Methodology Results Conclusion

Where are the Winners:The Determinants of US Immigration Policy, 1795-2008

Margaret E. PetersStanford University

November 13, 2009

1


The Forms of Globalization

19th Century 20th Century

Trade Closed Open

Immigration Open Closed

Puzzle 2


Economic Openness in the US

Source: Immigration flows: U.S. Citizenship and Immigration Services (2009) .Tariffs: Historical Statistics of the United States – Millennial Edition (Carter etal. 2006).

Puzzle 3


Traditional Explanations for International Economic Policy

• Importance of domestic interest groups

• Apply models of trade policy formation to immigration policy

Interest Groups

Trade Immigration

Producers Producers

Labor Labor

Nationalists Nativists

Puzzle 4


Traditional Explanations for International Economic Policy

• Importance of domestic interest groups

• Apply models of trade policy formation to immigration policy

Interest Groups

Trade Immigration

Producers Producers

Labor Labor

Nationalists Nativists

Puzzle 4


The US Case

• Hard Case

• Assume that party will predict voting

• Importance in the world economy

• Precursor to EU?

• 50 small “countries”

Puzzle 5


Overview of the Argument

• Use a formal model based on Grossman and Helpman’s (1994)model of trade protection and apply to immigration

• Rely on menu auction problems more generally

• Intuitively, model generates prediction that as demands ofpro-immigrant groups decrease anti-immigrant groups becomemore influential

• Examine when pro-immigrant groups demands for opennesschange

Puzzle 6







Puzzle 6







Puzzle 6


Producer Support for Immigration

• Producers support for immigration varies inversely with

• Labor productivity• Ability to produce overseas

• As these factors increase, support for immigration byproducers decrease

• Anti-immigrant groups have more influence over policy

Puzzle 7







Puzzle 7







Puzzle 7


Roll Call Votes in the Senate

• Use senators’ vote on immigration in a non-traditional way

• Best historical data on support for immigration

• Uses state level variation Importance of State Level Variation

• Hard test

• Assume that party will often perfectly predict voting behavior

Data and Methodology 8


Roll Call Votes in the Senate

• Use senators’ vote on immigration in a non-traditional way

• Best historical data on support for immigration

• Uses state level variation Importance of State Level Variation

• Hard test

• Assume that party will often perfectly predict voting behavior



Histogram of Votes per Year

020

40

60

Vote

s p

er

Year

1800 1850 1900 1950 2000Year

Histogram of Votes per Year



Percent of Expansive Votes Given Votes Reaching the Floor



Can Voting be Predicted by Party Alone?

Voting by Party

Not Cohesive Perfectly Cohesive

Number 1248 143

Percent 90% 10%

Voting by State

Senators Vote Differently Senators Vote the Same

Number 9169 23993

Percent 28% 72%



Positions of the Two Parties

Coefficents from logit regression on each vote regressed on an indicator forRepublicans.



Positions of the Regions

Coefficents from logit regression on each vote with party as control variable;the Northeast is the omitted category.



Observable Implications of My Argument and AlternativeHypotheses

Concept Variable Expected Sign

Productivity Capital in Agriculture –

Productivity Value produced per worker –

Ability to offshore Workers/ Establishment –

Rise of Labor Union participation rates –

Rise of Nativism Percent Foreign Born –

Results 14


Specification for Multivariate Analysis

• Agriculture:

voteit = α + β1acapoveragdpit + β2numestabit + β3perforeignbornit +β4agriwageit + β5perunionit + beta6perunemploymentit +β7cashtransferspercapitait + β8republicanit + εit

• Manufacturing:

voteit = α + β1workersperestabit + β2numestabit + β3perforeignbornit +β4manuwageit + β5perunionit + beta6perunemploymentit +β7cashtransferspercapitait + β8republicanit +β9valueproducedperworkerit + εit

Results 15


Multivariate Analysis : My Argument

Concept Variable Expected Sign Coefficient: Panel Coefficient: Logit

Productivity Capital in Agriculture – -0.01** 5%/ 60%

Productivity Log value produced per worker – 0.1*** 35%/ 61%

Ability to offshore Workers/ Establishment – 5.06e-05 2%/ 42%

Reference Republicans – 0.33*** 4%/ 62%

*** p<0.01, ** p<0.05, * p<0.1Panel Regression: Binomial regression on imputated data, 1950-2008Logit Regression: Percent of all coefficients with the hypothesized sign andstatistically significant from logit regressions on each vote/ percent of significantcoefficents with the hypothesized sign, 1950-2008

Full Results

Results 16


Alternative Hypotheses

Concept Variable Expected Sign Coefficient: Panel Coefficient: Logit

Rise of Labor Union participation rates - 1.42*** 7%/ 46%

Rise of Nativism Percent Foreign Born - -1.81*** 7%/ 36%

Reference Republicans – 0.33*** 4%/ 62%

*** p<0.01, ** p<0.05, * p<0.1Panel Regression: Binomial regression on imputated data, 1950-2008Logit Regression: Percent of all coefficients with the hypothesized sign andstatistically significant from logit regressions on each vote, 1950-2008Coefficents from manufacturing specification - results do not change significantlybetween specifications.

Results 17


Support for Alternative Hypotheses

• Coefficient on unions

• Only examining modern period• Hypothesis: Unions have begun representing more foreign born

workers?• Hypothesis: Rise of public sector unions?

• Coefficent on nativism is not robustly significant

• Hypothesis: Is it nativism or the position of the median voter?

Results 18


Support for Alternative Hypotheses

• Coefficient on unions

• Only examining modern period• Hypothesis: Unions have begun representing more foreign born

workers?• Hypothesis: Rise of public sector unions?

• Coefficent on nativism is not robustly significant

• Hypothesis: Is it nativism or the position of the median voter?

Results 18


Robustness Checks

• Results are robust to different specification of the dependentvariable

• Results are robust to choosing different subsets of votes

• Key legislation• Final passage

• Robust to several different models

• OLS with Robust SE (DV: proportion expansive votes)• OLS with senator fixed effects (DV: proportion expansive

votes)

• With clustered se by congress (DV: proportion expansivevotes)

• With clustered se by state (DV: proportion expansive votes)

• Tobit with senator random effects (DV: proportion expansivevotes)

• Binomial with Robust SE (DV: number of expansivevotes)

Results 19


Review of the Argument on Immigration Policy

• Key to understanding policy formation is to understand whenproducers are willing to organize

• Producers have outside options available

• Mechanization• Oppotunities to move production overseas

• Led to less incentive to lobby for open immigration

• Opened up policy space for anti-immigrant groups

Conclusion 20








Conclusion 20








Conclusion 20


Review of Results

• Producer interests matter

• Preferences over immigration change in a predictable way

• Labor

• Preferences may change with composition of unions

• Nativism

• Not clear if measures nativism or median voter

Conclusion 21


Immigration to Globalization

• Immigration a product of producers’ preferences

• Producers’ preferences change with ability to produce overseas

• Overseas production has expanded due to choice of trade andcapital mobility policies

• Reduced the size of the open immigration coalition

• Trade openness ⇒ Closed immigration

Conclusion 22


Thank you

Conclusion 23

Appendix

Appendix

Appendix 24

Appendix

Coefficient on Republicans


Appendix 25

Appendix

Productivity: Coefficient on Capital in Agriculture

Coefficents from logit regression on each vote with party as control variable.Years/ states missing data are dropped from the regressions.

Appendix 26

Appendix

Productivity: Coefficients on Value Produced per Worker


Appendix 27

Appendix

Ability to Offshore: Coefficents on Workers PerEstablishment


Appendix 28

Appendix

Rise of Labor: Coefficients on Unions


Appendix 29

Appendix

Rise of Nativism: Coefficients on Percent Foreign Born


Appendix 30

Appendix

Native and Foreign Born by Industry

0

5

10

15

20

25

30

35

40

1910 1920 1940 1950 1960 1970 1980 1990

Perc

ent o

f Men

in a

Giv

en In

dust

ry

Year

Distribution of Men by Industry

Native men in agriculture

Native Men in Manufacturing (durable)

Native Men in Manufacturing (non-durable)

Foreign Born Men in Agriculture

Foreign Born Men In Manufacturing (Durable)

Foreign Born Men in Manufacturing (Nondurable)

Appendix 31

Appendix

Agricultural Productivity by Region

Agricultural Productivity by Region Capital in Agriculture/ Production in Agriculture

Year

Capi

tal i

n A

gric

ultu

re/P

rodu

ctio

n in

Agr

icul

ture

00.

250.

50.

751

1850 1885 1916 1947 1978 2009

NortheastIndus MidwestAgri MidwestSouthMT WestPacificBorder States

Appendix 32

Appendix

Value Produced per Worker by Region

Appendix 33

Appendix

Agricultural Wages by Region

Appendix 34

Appendix

Manufacturing Wages by Region

Appendix 35

Appendix

Workers per Establishment by Region

Appendix 36

Appendix

Number of Establishments by Region

Appendix 37

Appendix

Welfare Spending by Region

Appendix 38

Appendix

Why Governments Let Firms Leave

Back to presentationAppendix 39

Appendix

Regression Results

Back to presentation

Appendix 40

Appendix

Why State Level Variation is Important

0

20

40

60

80

100

1820

1833

1846

1859

1872

1885

1898

1911

1924

1937

1950

1963

1976

1989

Immigra'on, Trade Openness, and Produc'vity

Average Tariffs (% Value)

Capital in Agriculture ($10 million)

Immigrants/ GDP ($10 million)

Value Added per Worker ($1000)

Back to presentation

Appendix 41

Appendix

Coefficient on Republicans - Procedural and Final Votes


Appendix 42

Documents

Where are the Winners - Princeton University · Where are the Winners: The Determinants of US Immigration Policy, 1795-2008 Margaret E. Peters Stanford University November 13, 2009