1 do interest groups affect immigration? giovanni facchini university of illinois and università...
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1
Do Interest Groups affect Immigration?
Giovanni FacchiniUniversity of Illinois and Università degli Studi di Milano
Anna Maria MaydaGeorgetown University
Prachi MishraResearch Department, IMF
2
Motivation
• Vast empirical literature on the effects of immigration on outcomes in the US labor market.
• Knowledge on the determinants of migration flows limited -- to the supply side (i.e. see Clark, Hatton and Williamson, 2007).
• Borjas (1994) “…The literature does not yet provide a systematic analysis
of the factors that generate the host country demand for immigrants.”
3
Motivation (contd)
• Key factor determining demand for immigrants – migration policy in rich countries
• Anecdotal evidence highlights role played by special interest groups– Unions historically supportive of measures restrictive of
migration. Eg. Chinese exclusion act (1882), Literacy Test provision (1917), Immigration Control and Reform Act (1986)
– Complementarities matter e.g. Silicon Valley excetutives trooped before Congress, warning of a Y2K disaster unless the number of H1-B visas was increased (Goldsborough 2000)
4
Motivation (contd)
• Recent theoretical literature has looked at the issue (Facchini and Willmann 2005).
• No systematic empirical evidence on the determinants of migration policy and, in particular, on the role played by pressure groups in shaping it.
• The purpose of this paper is to help fill this gap.
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• Develop a simple theoretical model to be used as the basis of our empirical specification.
We model migration policy and outcomes as the result of the contributions paid, in each sector, by the pro-migration lobby (the owners of capital) and by the anti-migration lobby (workers).
• Evaluate key predictions of the model using a unique, U.S. industry-level dataset that combines information on the number of immigrants with data on the political activities of organized groups, both in favor and against an increase in migration.
What we do
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Main result
• Both pro- and anti-immigration interest groups play a statistically significant and economically relevant role in shaping migration across sectors.
• Barriers to migration are higher in sectors where (anti-immigration) labor unions are more important, and lower in those sectors in which (pro-immigration) business lobbies are more active.
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Outline of the presentation
• Literature
• Theoretical Model
• Empirical strategy
• Data (CPS and CRP)
• Empirical results
• Conclusions
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Related Literature
• Theoretical literature: Facchini and Willman (2005): interest-group politics.
• Related empirical literature
– Hanson and Spilimbergo (2001) – effect of output prices on border enforcement in Mexico-US border states
– Works on the political economy of protection in international trade, e.g - Goldberg and Maggi (1999), Gawande and Bandyopadhyay (2000).
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Protection function model o Following Findlay and Wellisz (1982) and Eicher and Osang
(2002), we assume the following protection function:
22 ))(1()(1 ikiLi CC
where λ represents the the weight of labor in the protection
function and (1-λ) the weight of capital.
o Notice that the policy function is increasing with the contributions received by the organized workers and decreasing with the contributions received by the owners of the specific factor.
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o The two lobby play a non-cooperative game where they choose the amount to contribute to the government in order to maximize their net welfare.
o Solving simultaneously the system of first-order
conditions of the two lobbies gives rise to the following expression:
iL
iK
iLi
iL
iLi C
Cl
bLm
2)1(
)1
(21
)2
(
where iL is the share of the population that owns labor used in the production of output i.
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Empirical specification
The empirical specification of the model is:
iiiLiKi XCCM ,, .
According to the theoretical model, we expect to find:
0 and 0 .
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Data
• Newly available dataset from the Center for Responsive Politics (CRP) that allows us to identify lobbying expenditures associated with targeted policy area. 1998 and 2005 - at the firm level, aggregated to industry by CRP industry classification.
• Number of immigrants and natives, union membership rates of native workers, from the Current Population Survey (CPS) (March Annual Demographic File and Income Supplement to the CPS) – Census Bureau classification
• H1B visas (number of petitions approved) by industry from DHS
• Output, price, capital, FDI – BEA, ACES
• Various industry concordances to create the final dataset at industry level at the Census Bureau classification – 130 3-digit industries
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Appendix 2. Sample Lobbying Report
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Table 1. Targeted Political Activity Campaign Contributions and Lobbying Expenditures
Election cycle 1999-2000 2000-02 2002-04
Contributions from PACs 326 348 461
Overall lobbying exp 2954 3333 4052Of which exp for immigration 32 24 33
Total targeted political activity 3280 3681 4513
Source. Center for Responsive Politics
In millions of US Dollars
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Figure 1. Scatter Plots between Lobbying Expenditures and Campaign Contributions from PACs
Campaign contributions from PACs and overall lobbying expenditures(in millions of US$)
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4C
am
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ribu
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-2 0 2 4 6Overall lobbying expenditures (in logs)
(mean) lgcontributionsfrompacs Fitted values
Campaign contributions from PACs and lobbying expenditures on immigration(in millions of US$)
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4C
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from
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Cs
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-4 -3 -2 -1 0 1Lobbying expenditures for immigration (in logs)
(mean) lgcontributionsfrompacs Fitted values
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Figure 2. Real lobbying expenditures (in million USD)
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1600
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2000
2200
1998 1999 2000 2001 2002 2003 2004 2005
0
5
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20
25
overall_cont_mnUSD_real cont_imm_mnUSD_real
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Figure 3. Share of expenditures for immigration(in percent)
0.0
0.4
0.8
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1.6
2.0
1998 1999 2000 2001 2002 2003 2004 2005
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Figure 4. Top 10 spenders for immigration, 2005
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Figure 5. Top 10 Sectors with the Highest Number of Immigrants, 2005
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Figure 6. Scatter plot between lobbying expenditures for immigration and number of immigrants
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Figure 7. Scatter plot between lobbying expenditures for immigration and number of immigrants
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Figure 8. Scatter plot between union membership rates and number of immigrants
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Figure 9. Scatter plot between union membership rates and number of immigrants
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lgWGHTimmind1950 Fitted values
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lgWGHTimmind1950 Fitted values
2001
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206216
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lgWGHTimmind1950 Fitted values
2002
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489 506
516
526
527
536
546
556568578
579 586
587
588
596
597
598
606607608
609
616617
618
619
626
627
636646
656
657
658659
667
668
669
679
686
687
688
689
696
697
698
699
716
726736
746
806
807
808
816
817
826
836
846
848
849
856857
858
859
868869
879
888
896898
899
906
916936
81
01
21
4N
um
ber
of i
mm
igra
nts
(in lo
gs)
0 .2 .4 .6 .8 1Union membership rates (in logs)
lgWGHTimmind1950 Fitted values
2003
105
116
126226
236
246
306307
308
309
316317
318
319 326
336337 338
346
347
348
357358
367
376
377
378
379
386399
406
407
408
409
416
417 418419
426
429436
437
438439
446
448
456
457458
459
466
467
468
469
476
477
478
488
489506
516
526
527
536
546
556568578
579586
587
588
596
597
606607 608
609
616617
618
619
626
627
636646
656
657
658 659667
668 669
679
686
687
688
689696
697
698
699
716
726736
746
806
807
808
816
817
826836
846
848
849
856 857
858
859
868869
879
888
896898
899
906
916
936
68
10
12
14
Nu
mb
er o
f im
mig
rant
s (in
logs
)
0 .2 .4 .6 .8Union membership rates (in logs)
lgWGHTimmind1950 Fitted values
2004
105
116
126
206
216
226
236
246
306
307
308
309
316317
318319
326
336
337338
346
347
348
357 358
367
376
377
378379
386 399406
407
408
409
416
417418
419
426 429
436
437
438439
446
448
456
457
458
459
466
467
468
469
476
477
478
488489506
516
526
527536
546
556
567
568578
579586
587
588
596 597
606607
608
609
616617
618
619
626
627
636646
656
657
658659
667
668669
679
686
687
688689
696
697
698
699
716
726736
746
806
807
808
816
817
826 836
846
848
849
856857
859
868869
879
888
896898
899
906
916 936
51
01
5N
um
ber
of i
mm
igra
nts
(in lo
gs)
0 .2 .4 .6 .8Union membership rates (in logs)
lgWGHTimmind1950 Fitted values
2005
24
Figure 10. Scatter plot between lobbying expenditures for immigration and number of H1B visas
105
116126
206 216
226
236
246
306307
308309
316317
318319
326336337
338
346347348 356
357
358
367
376377
378
386387
388
399
406
407408409
416
417
418
419
426
448
456
457458
467
468
469
476477478
487
488
489 516
526
527
536
546
556
567578
579
586
587
588
596598
606607
608
609616617
618
619
626
627
636
637
646
647
656
657
658659 667668
669679
686
687
688
689
696
697
698
699
716726
746806
807 808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
916
936
05
10
15
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 5 10 15Lobbying expenditures for immigration (in logs)
(mean) lgh1b Fitted values
25
Figure 11. Scatter plot between lobbying expenditures for immigration and H1B visas (by year)
105
116
206216
226
236
306 307
308
309316
318319
326338
346348 356
357
358
367
376377
378
386
387
388
399
407408
409416
417
418
419
426
448
456
457458
467
469
476478488
489 516
536
546
556
567
578
579
586
587606607
608
609
617
618
619
667
668
669
716
726808
816817
836
858
859
868869
879
888
898
899
916
936
24
68
10
12
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
4 6 8 10 12 14Lobbying expenditures for immigration (in logs)
lgh1b Fitted values
2001
105
126
206 216
226
236
246
307
308309
316
318319
326336337
338
346348 356
357
358
367
376377
378
386387
388
399
406
408409
416
417
418
419
426
448
456
457458
467
469
476477478
487
488
489516
526
536
546
556
567 578
579
586
587
588
606607
608
609616
617
618
619
636
637
646
647
656
657
658659 667668
669679
686
687
689
696
697
698
699
726
746
808
816817
836
856857
858
859
868869
879
888
896
898
899
916
936
05
10
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 5 10 15Lobbying expenditures for immigration (in logs)
lgh1b Fitted values
2002
105
126
206 216
226
236
306
307
308
309
316
318319 338
346
347348
357
358
367
377
378
386
399
406
407408 409
416
417
418
419
426
448
456
457458
467
476
478488
489
546
556
567578
579
587608
609617
618
619
668
669
688
746
807 808
817
836
856857
858
859
868869
879
888
898
899
916
936
05
10
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
6 8 10 12 14Lobbying expenditures for immigration (in logs)
lgh1b Fitted values
2003
105
116126
206 216
226
236
307
308309
316
318319
326
338
346
347 348
357
358
367
376
377
378
386
399
406
407408409
416
417
418
419
426
448
456
457458
467
469
476
478488
489516
527
536
546
556
567 578
579
587596598
606607
608
609616617
618
619
626
627
636
646
656
657
658659 667668
669679
686
687
688
689
696
697
698
699
716
726
746806
807 808
816817
826
836
846
848
849
858
859
868869
879
888
898
899
916
936
24
68
10
12
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 5 10 15Lobbying expenditures for immigration (in logs)
lgh1b Fitted values
2004
105
116
126
206 216
226
236
246
306307
308309
316317
318319
326
338
346347 348
357
358
367
376377
378
386
399
406
407408409
416
417
418
419
426
448
456
457458
467
468
469
476477
478488
489 516
536
546
556
567578
579
587
588
606607
608
609616617
618
619
636
646
656
657
658659 667668
669
679
686
687
688
689
696
697
698
699
716726807 808
816817
836
856857
858
859
868 869
879
888
898
899
916
936
05
10
15
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
5 10 15Lobbying expenditures for immigration (in logs)
lgh1b Fitted values
2005
26
Figure 12. Scatter plot between union membership and number of H1B visas
105
116126
206216
226
236
246
306307
308309
316317
318 319
326336337
338
346347 348 356
357
358
367
376377
378
379386387
388
399
406
407408409
416
417
418
419
426
429436
437438
439446
448449
456
457458
459
466
467
468
469
476477478
487
488
489506516
526
527
536
546
556
567
568
578
579
586
587
588
596 597598
606607
608
609616617
618
619
626
627
636
637
646
647
656
657
658659667668
669679
686
687
688
689
696
697
698
699
716
726
736
746806
807808
816817
826
836
846
848
849 856 857
858
859
868869
879
888
896
898
899
906
916
936
05
10
15
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 .2 .4 .6 .8Union membership rates (in logs)
(mean) lgh1b Fitted values
27
Figure 13. Scatter plot between union membership rates and H1B visas (by year)
105
116126
206 216
226
236
246
306 307
308309
316317
318 319
326 336337338
346356
357
358
367
376377
378
379386
387
388
399
406407
408409 416
417
418
419
426
429436
438
439446
448449
456
457 458
459467
468
469
476 477478 488489 506516
526
527536
546
556
567
568
578
579
586587
588
596 597598
606607
608
609616
617
618619
626
627
636
637
646
647
656
657
658659
667668
669679
686
687688689
696
697
698
699
716
726
736
746
806
807808
816817
826
836
846
849856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206216
226
236
246
307
308309316317
318319
326336337338
346356
357358
367
376377
378
379386387388
399
406
407408409
416
417
418
419
426
429436
437
438
439 446
448449
456
457458
459467
468
469
476477 478
487
488
489506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
598
606607
608
609616617
618
619
626
627
636646
647
656
657
658659667668
669679
686
687
688689
696
697
698
699
716726
736
746806
807808
816817
826
836
846
849 856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116206216
226
236
246
306
307
308309
316317
318 319
326336337
338
346347
348
357
358
367
376
377
378
379386
399
406
407408409
416
417
418
419
426
429436
437438
439446
448
456
457458
459
466
467
468
469
476477478488
489506516
526
527
536
546556
567
568
578
579
586
587
588
596597598
606607
608
609616617
618
619
626
627
636646
656
657
658659667668
669679
686
687688
689
696
697
698
699
716726
736746
806
807808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116126
206216
226
236
246
307
308309
316317
318319
326336337338
346347 348
357
358
367
376
377
378
379386
399
406
407 408409
416
417
418
419
426
429
436437
438
439
446
448
456
457458
459
466
467
468
469
476 477478
488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
606607
608
609616617
618
619
626
627
636646656
657
658659667668
669679
686
687
688
689
696
697
698
699
716726
736746
806
807 808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206 216
226
236
246
306307
308309
316 317
318 319
326336337
338
346347348
357
358
367
376377
378
379386
399
406
407408
409416
417
418
419
426
429436437438
439446
448
456
457458
459
466
467
468
469
476477
478488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596 597606607
608
609616617
618
619
626
627
636
646
656
657
658659667668
669
679
686
687
688
689
696
697
698
699
716726
736746806
807 808
816817
826
836
846
848
849 856857
858
859
868 869
879
888
896
898
899
906
916
936
05
10
15
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 .2 .4 .6 .8 1Union membership rates (in logs)
lgh1b Fitted values
2001
105
116126
206 216
226
236
246
306 307
308309
316317
318 319
326 336337338
346356
357
358
367
376377
378
379386
387
388
399
406407
408409 416
417
418
419
426
429436
438
439446
448449
456
457 458
459467
468
469
476 477478 488489 506516
526
527536
546
556
567
568
578
579
586587
588
596 597598
606607
608
609616
617
618619
626
627
636
637
646
647
656
657
658659
667668
669679
686
687688689
696
697
698
699
716
726
736
746
806
807808
816817
826
836
846
849856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206216
226
236
246
307
308309316317
318319
326336337338
346356
357358
367
376377
378
379386387388
399
406
407408409
416
417
418
419
426
429436
437
438
439 446
448449
456
457458
459467
468
469
476477 478
487
488
489506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
598
606607
608
609616617
618
619
626
627
636646
647
656
657
658659667668
669679
686
687
688689
696
697
698
699
716726
736
746806
807808
816817
826
836
846
849 856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116206216
226
236
246
306
307
308309
316317
318 319
326336337
338
346347
348
357
358
367
376
377
378
379386
399
406
407408409
416
417
418
419
426
429436
437438
439446
448
456
457458
459
466
467
468
469
476477478488
489506516
526
527
536
546556
567
568
578
579
586
587
588
596597598
606607
608
609616617
618
619
626
627
636646
656
657
658659667668
669679
686
687688
689
696
697
698
699
716726
736746
806
807808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116126
206216
226
236
246
307
308309
316317
318319
326336337338
346347 348
357
358
367
376
377
378
379386
399
406
407 408409
416
417
418
419
426
429
436437
438
439
446
448
456
457458
459
466
467
468
469
476 477478
488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
606607
608
609616617
618
619
626
627
636646656
657
658659667668
669679
686
687
688
689
696
697
698
699
716726
736746
806
807 808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206 216
226
236
246
306307
308309
316 317
318 319
326336337
338
346347348
357
358
367
376377
378
379386
399
406
407408
409416
417
418
419
426
429436437438
439446
448
456
457458
459
466
467
468
469
476477
478488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596 597606607
608
609616617
618
619
626
627
636
646
656
657
658659667668
669
679
686
687
688
689
696
697
698
699
716726
736746806
807 808
816817
826
836
846
848
849 856857
858
859
868 869
879
888
896
898
899
906
916
936
05
10
15
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 .2 .4 .6 .8 1Union membership rates (in logs)
lgh1b Fitted values
2002
105
116126
206 216
226
236
246
306 307
308309
316317
318 319
326 336337338
346356
357
358
367
376377
378
379386
387
388
399
406407
408409 416
417
418
419
426
429436
438
439446
448449
456
457 458
459467
468
469
476 477478 488489 506516
526
527536
546
556
567
568
578
579
586587
588
596 597598
606607
608
609616
617
618619
626
627
636
637
646
647
656
657
658659
667668
669679
686
687688689
696
697
698
699
716
726
736
746
806
807808
816817
826
836
846
849856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206216
226
236
246
307
308309316317
318319
326336337338
346356
357358
367
376377
378
379386387388
399
406
407408409
416
417
418
419
426
429436
437
438
439 446
448449
456
457458
459467
468
469
476477 478
487
488
489506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
598
606607
608
609616617
618
619
626
627
636646
647
656
657
658659667668
669679
686
687
688689
696
697
698
699
716726
736
746806
807808
816817
826
836
846
849 856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116206216
226
236
246
306
307
308309
316317
318 319
326336337
338
346347
348
357
358
367
376
377
378
379386
399
406
407408409
416
417
418
419
426
429436
437438
439446
448
456
457458
459
466
467
468
469
476477478488
489506516
526
527
536
546556
567
568
578
579
586
587
588
596597598
606607
608
609616617
618
619
626
627
636646
656
657
658659667668
669679
686
687688
689
696
697
698
699
716726
736746
806
807808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116126
206216
226
236
246
307
308309
316317
318319
326336337338
346347 348
357
358
367
376
377
378
379386
399
406
407 408409
416
417
418
419
426
429
436437
438
439
446
448
456
457458
459
466
467
468
469
476 477478
488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
606607
608
609616617
618
619
626
627
636646656
657
658659667668
669679
686
687
688
689
696
697
698
699
716726
736746
806
807 808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206 216
226
236
246
306307
308309
316 317
318 319
326336337
338
346347348
357
358
367
376377
378
379386
399
406
407408
409416
417
418
419
426
429436437438
439446
448
456
457458
459
466
467
468
469
476477
478488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596 597606607
608
609616617
618
619
626
627
636
646
656
657
658659667668
669
679
686
687
688
689
696
697
698
699
716726
736746806
807 808
816817
826
836
846
848
849 856857
858
859
868 869
879
888
896
898
899
906
916
936
05
10
15
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 .2 .4 .6 .8 1Union membership rates (in logs)
lgh1b Fitted values
2003
105
116126
206 216
226
236
246
306 307
308309
316317
318 319
326 336337338
346356
357
358
367
376377
378
379386
387
388
399
406407
408409 416
417
418
419
426
429436
438
439446
448449
456
457 458
459467
468
469
476 477478 488489 506516
526
527536
546
556
567
568
578
579
586587
588
596 597598
606607
608
609616
617
618619
626
627
636
637
646
647
656
657
658659
667668
669679
686
687688689
696
697
698
699
716
726
736
746
806
807808
816817
826
836
846
849856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206216
226
236
246
307
308309316317
318319
326336337338
346356
357358
367
376377
378
379386387388
399
406
407408409
416
417
418
419
426
429436
437
438
439 446
448449
456
457458
459467
468
469
476477 478
487
488
489506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
598
606607
608
609616617
618
619
626
627
636646
647
656
657
658659667668
669679
686
687
688689
696
697
698
699
716726
736
746806
807808
816817
826
836
846
849 856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116206216
226
236
246
306
307
308309
316317
318 319
326336337
338
346347
348
357
358
367
376
377
378
379386
399
406
407408409
416
417
418
419
426
429436
437438
439446
448
456
457458
459
466
467
468
469
476477478488
489506516
526
527
536
546556
567
568
578
579
586
587
588
596597598
606607
608
609616617
618
619
626
627
636646
656
657
658659667668
669679
686
687688
689
696
697
698
699
716726
736746
806
807808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116126
206216
226
236
246
307
308309
316317
318319
326336337338
346347 348
357
358
367
376
377
378
379386
399
406
407 408409
416
417
418
419
426
429
436437
438
439
446
448
456
457458
459
466
467
468
469
476 477478
488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
606607
608
609616617
618
619
626
627
636646656
657
658659667668
669679
686
687
688
689
696
697
698
699
716726
736746
806
807 808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206 216
226
236
246
306307
308309
316 317
318 319
326336337
338
346347348
357
358
367
376377
378
379386
399
406
407408
409416
417
418
419
426
429436437438
439446
448
456
457458
459
466
467
468
469
476477
478488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596 597606607
608
609616617
618
619
626
627
636
646
656
657
658659667668
669
679
686
687
688
689
696
697
698
699
716726
736746806
807 808
816817
826
836
846
848
849 856857
858
859
868 869
879
888
896
898
899
906
916
936
05
10
15
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 .2 .4 .6 .8 1Union membership rates (in logs)
lgh1b Fitted values
2004
105
116126
206 216
226
236
246
306 307
308309
316317
318 319
326 336337338
346356
357
358
367
376377
378
379386
387
388
399
406407
408409 416
417
418
419
426
429436
438
439446
448449
456
457 458
459467
468
469
476 477478 488489 506516
526
527536
546
556
567
568
578
579
586587
588
596 597598
606607
608
609616
617
618619
626
627
636
637
646
647
656
657
658659
667668
669679
686
687688689
696
697
698
699
716
726
736
746
806
807808
816817
826
836
846
849856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206216
226
236
246
307
308309316317
318319
326336337338
346356
357358
367
376377
378
379386387388
399
406
407408409
416
417
418
419
426
429436
437
438
439 446
448449
456
457458
459467
468
469
476477 478
487
488
489506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
598
606607
608
609616617
618
619
626
627
636646
647
656
657
658659667668
669679
686
687
688689
696
697
698
699
716726
736
746806
807808
816817
826
836
846
849 856 857
858
859
868869
879
888
896
898
899
906
916
936
105
116206216
226
236
246
306
307
308309
316317
318 319
326336337
338
346347
348
357
358
367
376
377
378
379386
399
406
407408409
416
417
418
419
426
429436
437438
439446
448
456
457458
459
466
467
468
469
476477478488
489506516
526
527
536
546556
567
568
578
579
586
587
588
596597598
606607
608
609616617
618
619
626
627
636646
656
657
658659667668
669679
686
687688
689
696
697
698
699
716726
736746
806
807808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116126
206216
226
236
246
307
308309
316317
318319
326336337338
346347 348
357
358
367
376
377
378
379386
399
406
407 408409
416
417
418
419
426
429
436437
438
439
446
448
456
457458
459
466
467
468
469
476 477478
488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596597
606607
608
609616617
618
619
626
627
636646656
657
658659667668
669679
686
687
688
689
696
697
698
699
716726
736746
806
807 808
816817
826
836
846
848
849 856857
858
859
868869
879
888
896
898
899
906
916
936
105
116
126
206 216
226
236
246
306307
308309
316 317
318 319
326336337
338
346347348
357
358
367
376377
378
379386
399
406
407408
409416
417
418
419
426
429436437438
439446
448
456
457458
459
466
467
468
469
476477
478488
489 506516
526
527
536
546
556
567
568
578
579
586
587
588
596 597606607
608
609616617
618
619
626
627
636
646
656
657
658659667668
669
679
686
687
688
689
696
697
698
699
716726
736746806
807 808
816817
826
836
846
848
849 856857
858
859
868 869
879
888
896
898
899
906
916
936
05
10
15
Nu
mb
er o
f H1B
vis
as (
in lo
gs)
0 .2 .4 .6 .8 1Union membership rates (in logs)
lgh1b Fitted values
2005
28
Dependent variableOLS1 OLS2 OLS3 OLS4 OLS5 OLS6 OLS7 OLS8 OLS9 OLS10
log (lobbying exp) 0.398*** 0.427*** 0.397*** 0.413*** 0.414*** 0.399*** 0.407*** 0.379*** 0.415*** 0.462***[0.047] [0.048] [0.044] [0.045] [0.045] [0.050] [0.052] [0.053] [0.050] [0.119]
union membership rate -3.202*** -2.215*** -1.877** -1.898** -2.103*** -1.768** -2.031** -1.244* -3.261***[0.794] [0.804] [0.837] [0.797] [0.799] [0.804] [0.829] [0.730] [1.112]
lg (output) 0.308*** 0.324*** 0.326*** 0.277** 0.302*** 0.321*** 0.199* 0.073[0.073] [0.070] [0.072] [0.112] [0.112] [0.106] [0.112] [0.183]
unemployment rate 7.322 7.361 6.676 6.519 3.516 -1.13 2.899[4.672] [4.771] [4.817] [4.871] [4.844] [4.812] [6.924]
log (price) 0.441 0.259 0.209 0.697 0.301 -7.799***[2.598] [2.560] [2.500] [2.359] [2.204] [2.459]
log (capital) 0.115 0.148 0.138 0.154 0.284[0.157] [0.158] [0.142] [0.132] [0.228]
log (FDI) -0.096* -0.094 -0.009 -0.069[0.055] [0.057] [0.059] [0.117]
shocks 5.073** 4.523** 4.045*[1.986] [1.888] [2.320]
log (lag US wages) -9.353*** -7.506[3.141] [4.684]
log (lag Mexican wages) 0.289*[0.164]
_cons 6.636*** 6.769*** 3.329*** 2.562*** 0.492 1.072 1.346 -1.701 17.782 49.079***[0.450] [0.453] [0.900] [0.918] [12.304] [12.145] [11.881] [11.251] [12.425] [14.992]
N 137 136 136 136 136 132 130 130 130 53
log (number of immigrants)
Table 3. Estimated Effect of Politics on Migration OLS
29
Dependent variableOLS1 OLS2 OLS3 OLS4 OLS5 OLS6 OLS7 OLS8 OLS9 OLS10
log (lobbying exp) 0.389*** 0.404*** 0.367*** 0.376*** 0.375*** 0.339*** 0.362*** 0.362*** 0.379*** 0.297***[0.023] [0.024] [0.022] [0.022] [0.022] [0.025] [0.026] [0.026] [0.026] [0.089]
union membership rate -1.806*** -0.996*** -0.838** -0.843** -0.816** -0.655* -0.660* -0.634* -2.698***[0.327] [0.328] [0.332] [0.332] [0.341] [0.358] [0.360] [0.364] [0.633]
lg (output) 0.288*** 0.297*** 0.301*** 0.273*** 0.281*** 0.282*** 0.210*** 0.125[0.036] [0.036] [0.036] [0.052] [0.053] [0.053] [0.053] [0.139]
unemployment rate 4.014** 3.990** 3.706** 3.598** 3.576* 1.97 10.703**[1.694] [1.704] [1.732] [1.775] [1.821] [1.892] [4.927]
log (price) 0.561 0.391 0.395 0.393 0.314 0.205[0.581] [0.598] [0.615] [0.619] [0.588] [1.180]
log (capital) 0.092 0.128** 0.128** 0.152** 0.246[0.059] [0.062] [0.062] [0.060] [0.153]
log (FDI) -0.080*** -0.081*** -0.036 0.008[0.030] [0.030] [0.031] [0.081]
shocks 0.108 -0.093 -4.229***[1.113] [1.106] [1.369]
log (lag US wages) -4.892*** -2.264[1.351] [2.509]
log (lag Mexican wages) 0.172**[0.076]
_cons 6.628*** 6.716*** 3.639*** 3.219*** 0.589 1.373 1.173 1.152 10.584*** 6.355[0.286] [0.298] [0.455] [0.463] [2.765] [2.866] [2.945] [2.930] [3.804] [8.062]
N 760 746 746 746 746 620 596 596 589 105
log (number of immigrants)
Table A1. Estimated Effect of Politics on Migration, Pooled OLS
30
Dependent variableOLS1 OLS2 OLS3 OLS4 OLS5 OLS6 OLS7 OLS8 OLS9
log (lobbying exp) 0.394*** 0.423*** 0.391*** 0.404*** 0.404*** 0.397*** 0.407*** 0.379*** 0.415***[0.049] [0.050] [0.045] [0.046] [0.047] [0.051] [0.052] [0.053] [0.050]
union membership rate -3.302*** -2.128** -1.809** -1.814** -2.019** -1.768** -2.031** -1.244*[0.818] [0.816] [0.854] [0.806] [0.805] [0.804] [0.829] [0.730]
lg (output) 0.332*** 0.346*** 0.346*** 0.281** 0.302*** 0.321*** 0.199*[0.072] [0.070] [0.072] [0.112] [0.112] [0.106] [0.112]
unemployment rate 7.238 7.244 6.958 6.519 3.516 -1.13[4.699] [4.772] [4.852] [4.871] [4.844] [4.812]
log (price) 0.078 0.213 0.209 0.697 0.301[2.584] [2.562] [2.500] [2.359] [2.204]
log (capital) 0.116 0.148 0.138 0.154[0.157] [0.158] [0.142] [0.132]
log (FDI) -0.096* -0.094 -0.009[0.055] [0.057] [0.059]
shocks 5.073** 4.523**[1.986] [1.888]
log (lag US wages) -9.353***[3.141]
_cons 6.654*** 6.791*** 3.070*** 2.345** 1.978 1.22 1.346 -1.701 17.782[0.464] [0.461] [0.885] [0.911] [12.266] [12.163] [11.881] [11.251] [12.425]
N 130 130 130 130 130 130 130 130 130
log (number of immigrants)
Table A2. Estimated Effect of Politics on Migration OLS, Balanced Number of Observations
31
Dependent variableOLS1 OLS2 OLS3 OLS4 OLS5 OLS6 OLS7 OLS8 OLS9 OLS10
log (lobbying exp) 0.289*** 0.292*** 0.267*** 0.272*** 0.273*** 0.287*** 0.286*** 0.257*** 0.285*** 0.224**[0.055] [0.059] [0.056] [0.058] [0.058] [0.058] [0.060] [0.061] [0.063] [0.107]
union membership rate -1.849* -0.895 -0.664 -0.656 -1.956** -1.757** -2.033** -1.349* -4.383***[1.073] [1.016] [1.045] [1.016] [0.823] [0.828] [0.856] [0.773] [1.399]
lg (output) 0.339*** 0.349*** 0.348*** 0.204* 0.214* 0.232** 0.123 0.139[0.078] [0.076] [0.078] [0.114] [0.114] [0.110] [0.117] [0.205]
unemployment rate 4.251 4.237 4.066 4.11 1.1 -2.946 0.7[5.142] [5.217] [5.225] [5.311] [5.231] [5.291] [9.054]
log (price) -0.169 -0.114 -0.17 0.336 -0.086 -7.811**[2.833] [2.662] [2.636] [2.499] [2.292] [3.017]
log (capital) 0.25 0.269* 0.259* 0.278** 0.436*[0.152] [0.155] [0.144] [0.136] [0.219]
log (FDI) -0.04 -0.038 0.039 -0.063[0.061] [0.063] [0.064] [0.111]
shocks 5.240** 4.638** 1.594[2.122] [2.053] [2.125]
log (lag US wages) -8.314** -4.625[3.336] [5.472]
log (lag Mexican wages) 0.465**[0.186]
_cons 7.759*** 7.980*** 4.133*** 3.710*** 4.504 3.734 3.997 0.84 18.516 43.040**[0.535] [0.546] [0.967] [1.047] [13.421] [12.634] [12.516] [11.911] [12.997] [18.857]
142 141 141 141 141 136 134 134 134 55N
log (number of immigrants)
Table A3. Estimated Effect of Politics on Migration OLS, Include Sectors with Zero Lobbying Expenditures
32
Dependent variable
2002 2003 2004 2005
log (lobbying exp) 0.389*** 0.658*** 0.335*** 0.576*** 0.225*** 0.572*** 0.391*** 0.532***[0.057] [0.068] [0.050] [0.085] [0.054] [0.084] [0.067] [0.060]
union membership rate -1.522* -1.582** -2.724*** -1.184 -0.849 -0.914 -1.206 -2.904**[0.821] [0.737] [0.847] [0.933] [1.168] [0.736] [1.002] [1.223]
Table A4. Estimated Effect of Politics on Migration, 1998-2005
1998 1999 2000 2001
log (number of immigrants)
33
OLS OLS_cont
log (lobbying exp) 0.367*** 0.361***[0.047] [0.048]
union membership rate -2.998*** -1.173[0.814] [0.754]
lg (output) 0.205*[0.115]
unemployment rate -1.064[5.067]
log (price) 1.322[2.319]
log (capital) 0.179[0.135]
log (FDI) -0.019[0.061]
shocks 4.985**[1.930]
log (lag US wages) -9.043***[3.156]
_cons 6.514*** 11.881[0.535] [12.937]
N 136 130
Table A5. Estimated Effect of Politics on MigrationAlternative Measure of Lobbying Expenditures
34
Dependent variable
OLS OLS_cont OLS OLS_cont OLS OLS_cont
log (campaign contribution) 0.230* 0.043 0.006 -0.092[0.131] [0.146] [0.174] [0.208]
log (lobbying exp) 0.322*** 0.346*** 0.321*** 0.348***[0.047] [0.047] [0.050] [0.049]
union membership rate -1.365 -0.102 -3.231*** -0.28 -3.168*** -0.286[1.010] [1.125] [1.023] [0.975] [1.086] [0.989]
lg (output) 0.209 0.279** 0.287**[0.133] [0.127] [0.127]
unemployment rate -3.207 -1.823 -1.499[4.546] [3.852] [3.883]
log (price) -0.266 -0.031 -0.178[1.906] [1.632] [1.663]
log (capital) 0.254 0.129 0.128[0.157] [0.133] [0.142]
log (FDI) 0.01 -0.059 -0.039[0.086] [0.063] [0.068]
shocks 5.420** 4.062** 4.235**[2.324] [1.845] [1.833]
log (lag US wages) -4.404 -8.713** -8.650**[3.554] [3.484] [3.513]
_cons 7.827*** 13.986 8.433*** 19.107* 8.339*** 20.772*[2.004] [12.140] [0.471] [10.703] [2.608] [12.464]
N 134 128 124 118 123 117
log (number of immigrants)
Table 4. Estimated Effect of Politics on Migration, 1999-2004, Campaign Contributions vs Lobbying Expenditures
35
Table 5. Estimated Effect of Politics on Migration,
OLS OLS_cont
log (lobbying exp) 0.458*** 0.428***[0.057] [0.061]
union membership rate -2.901** -3.726**[1.268] [1.624]
lg (output) 0.141[0.125]
unemployment rate 1.235[4.025]
log (price) -0.401[3.080]
log (capital) -0.052[0.154]
log (FDI) 0.161*[0.082]
shocks -3.385[2.493]
log (lag US wages) 7.203*[3.667]
_cons 1.029* -11.69[0.521] [15.859]
N 126 120
Dependent variable - ln(number of visas)
H1B Visas, 2001-2005
36
Table 6. Estimated Effect of Politics on Migration, 1998-2005,
OLS OLS_cont
log (lobbying exp) 0.383*** 0.391***[0.043] [0.043]
union membership rate -3.486*** -1.591**[0.699] [0.689]
lg (output) 0.234**[0.103]
unemployment rate 3.377[4.136]
log (price) 3.03[2.207]
log (capital) 0.076[0.116]
log (FDI) -0.009[0.058]
shocks 3.260*[1.732]
log (lag US wages) -7.676**[3.035]
_cons 6.379*** 1.839[0.401] [12.081]
N 136 130
New Immigrants
37
Endogeneity & reverse causality concerns
• Direction of bias – lobbying exp
o Sectors with higher number of immigrants close to their optimal level, less incentive to invest in lobbying.
o Sectors with higher number of immigrants need to lobby more – to obtain access of immigrant workers and their children to health, education, etc.
• Direction of bias – union membership
o Higher number of immigrants, increased threat to native workers, raise incentive to join unions.
o Higher number of immigrants, reduced bargaining power of unions, lower incentive to join unions
38
Instrumental variables strategy
• The IV for lobbying expenditures on immigration is: the sum in a sector of the lobbying expenditures by firms which do not list immigration as an issue in the lobbying report:
o Plausible to assume that these are not directly related to immigration policy (exclusion restriction).
o Common industry-level variables driving lobbying expenditures on immigration and on any other issue (strong instrument).
39
Instrumental variables strategy (contd)
• The IV for union membership rates is: union membership rates in the UK:
o Evidence that union membership rates across sectors are correlated across countries.
o Assumption – union membership rates in the UK should not be directly related to immigration policy in the US.
40
IV IV_cont
log (lobbying exp) 0.527*** 0.488***[0.057] [0.057]
union membership rate -6.610*** -3.138*[1.709] [1.586]
lg (output) 0.115[0.135]
unemployment rate -1.694[5.111]
log (price) -1.48[2.213]
log (capital) 0.249[0.172]
log (FDI) -0.014[0.063]
shocks 4.271**[2.031]
log (lag US wages) -9.079***[3.214]
_cons 6.197*** 25.287*[0.545] [13.053]
First-stage F for lobbying exp 195.73 153.52First-stage F for union membership 30.3271 14.85419N 119 114
Table 7. Estimated Effect of Politics on Migration, 1998-2005, Instrumental Variables
41
Does political organization have a greater impact on immigration in skilled-sectors?
OLS OLS_cont OLS OLS_cont
log (lobbying exp) 0.469*** 0.354*** 0.421*** 0.396***[0.076] [0.078] [0.065] [0.072]
union membership rate -2.661** 0.308 -3.915*** -3.088**[1.064] [1.158] [1.225] [1.199]
lg (output) 0.290* 0.098[0.149] [0.167]
unemployment rate 9.932 -9.610*[6.928] [5.331]
log (price) 5.004 -0.972[3.561] [2.931]
log (capital) -0.032 0.323[0.165] [0.225]
log (FDI) 0.099 -0.075[0.093] [0.071]
shocks 5.197* 2.455[2.955] [2.802]
log (lag US wages) -9.562* -8.118**[5.220] [3.102]
_cons 6.463*** -4.286 6.785*** 22.852[0.665] [21.141] [0.639] [14.640]
N 68 66 68 64
Unskilled-intensive sectors Skilled-intensive sectors
Table 8. Estimated Effect of Politics on Migration, 1998-2005, Split Samples by Skill Intensity
42
Conclusions
• Systematic empirical evidence on the political economy of migration policy is scarce in the economics literature.
• To the best of our knowledge we are the first ones to empirically investigate the role played by interest groups politics in shaping migration policy.
• Main result - barriers to migration are higher in sectors where labor unions are more important, and lower in those sectors in which business lobbies are more active.
o Result robust to introducing various industry level controls and using an IV strategy.
o Results on unions are stronger for skilled-intensive sectors, no statistically significant difference in the effectiveness of lobbying expenditures.