Paper by Joe Long, Carlo Medici, Nancy Qian & Marco Tabellini.
This paper investigates the economic consequences of the 1882 Chinese Exclusion Act, which banned immigration from China to the United States. The Act reduced the number of Chinese workers of all skill levels residing in the U.S. It also reduced the labor supply and the quality of jobs held by white and U.S.-born workers, the intended beneficiaries of the Act, and reduced manufacturing output. The results suggest that the Chinese Exclusion Act slowed economic growth in western states until at least 1940.
I’m confident that Mr. Trump will provide some more opportunities to apply the diffs-in-diffs methodology.
There is a difference between keeping workers out and throwing them out. Keeping workers out means that jobs go unfilled. Businesses that would have expanded don’t expand. Alternatives are sought. Prices reflect available resources. Adjustment is smooth.
Throwing workers out means that existing jobs are suddenly empty. This paper makes clear the impact of an already-existing job suddenly going empty. Job losses for those who remain behind, rather than job gains. Business investment already underttaken proves useless. Supply-chain disruption. Adjustment is not smooth.
Throwing workers out is much more damaging than keeping them out. The U.S. has been the world’s growth leader in the Covid-era expansion in part due to government spending, in part due to immigration. Trump says he’s going to undo both.
Way off topic, and very sad – Russia didn’t have to go this way:
https://nsarchive.gwu.edu/briefing-book/russia-programs/2024-12-18/long-telegram-1990s-whose-russia-it-anyway-toward-policy
The U.S. government “helped” Russia’s transition from socialism to whatever-the-heck it has now. “Shock treatment” was the magic formula we offered – let markets do everything and ignore political institution-building. A top diplomat in the political section of the U.S. embassy in Moscow dissented, arguing leaving Russia’s future, and future relations with the world, to markets was a bad idea, and would produce bad results. Well, here we are.
Dogma is a bad foundation for policy. Markets are not the solution to every problem. Price discovery cannot answer every question.
We are apparently in the process of rethinking markets as the solution to every problem. Biden certainly was part of that rethinking. Now, a new dogma, if Trumpism even qualifies as dogma, is going to try shock therapy here at home. Goodie.
By the way, it took a freedom of information act request to shake this dissent loose.