Immigration and Jobs: David Card’s Influential Study

A chief concern of modern policy is the impact of immigrants on natives’ employment prospects. The difficulty for academics attempting to verify these effects is daunting. In the real world, immigrants arrive from and disperse throughout many areas, choosing cities with favorable labor market conditions. Meanwhile, large macroeconomic events also shift wages and employment levels. Thus, a constant adjustment occurs in labor markets across cities and states, obscuring the effects of immigration for researchers trying to quantify its impact on native workers.

However, events from the summer of 1980 provide a type of natural experiment in immigration economics. From May to September, around 125,000 Cuban refugees were permitted to leave Castro’s Cuba and embark on a flotilla to Miami. It is estimated that about half of these immigrants stayed in Miami, thereby raising the city’s labor supply by seven percent in a mere five months. This served as a perfect opportunity to study how an exogenous shock of immigrant labor to an economy would affect native workers. David Card, an economist at UC Berkeley, completed the founding study of the 1980 Mariel Boatlift and found that the seven percent increase in the labor force did not negatively impact wages or employment levels of native workers. His study, entitled “The Impact of the Mariel Boatlift on the Miami Labor Market,” published in 1990, has since served as a major reference point in immigration debates.

Card’s study used data from the U.S. Census Bureau’s Current Population Survey to estimate wages for individuals in the Miami metropolitan area for each year from 1979 to 1985. He divided respondents by race and income quartile, allowing him to analyze the Mariel boatlift’s effects on differing demographics. Assuming income is reflective of skill, his analysis informed how the Mariel boatlift affected wages and employment of low-skilled versus high-skilled labor.

To account for changing macroeconomic conditions, Card compared Miami’s wages and employment levels to four similar metropolitan areas: Atlanta, Los Angeles, Houston, and Tampa. These cities were chosen for having similar patterns of economic growth and racial compositions to Miami. Card found that white, black, and non-Cuban Hispanic wages and employment in Miami were similar to the comparison cities during the 1979-1985 period. This strongly suggested that the Mariel boatlift did not negatively impact whites, blacks, or non-Cuban Hispanics in Miami.

Cuban-Hispanic employment in Miami is more difficult to explain. Cuban unemployment actually rose in Miami three percentage points in 1980. However, Card believes this is consistent with the Mariel cohort having unemployment rates of twenty percent. Their addition to the data explains the total Cuban unemployment increase; previous Cuban immigrants in Miami probably experienced no rise in unemployment themselves. Card then used the average wages by income quartile to deduce the effect of the Mariel immigrants on low-skilled labor specifically. He found that black and white low-skilled workers had the same relative wage difference to high-skilled workers as before the boatlift.

Again, analyzing the Mariel boatlift’s impact on Cubans in Miami was more complicated. Cuban workers in Miami had a nine percentage point decline in wages compared to Hispanics in the four comparison cities. This hit low-skilled Cubans especially hard; they faced a 11-12 percentage point decline in wages. However, after carefully controlling for education, age, work experience, and other variables, the wage declines disappeared. This strongly suggests that the lower wages of Cubans in Miami can be explained by the statistical dilution of the Cuban workforce from the introduction of low-skilled Mariel refugees, not by increased labor competition between previous and newly-arrived Cuban immigrants.

Card’s work provides two conclusions: first, the Mariel boatlift’s economic shock to the Miami labor market did not negatively affect wages or employment outcomes for workers in Miami; second, although the Mariel immigrants were almost entirely low-skilled, their arrival did not affect the overall wages of low-skilled workers. At least within the bounds of this shock (a seven percent increase in low-skilled labor), immigration appears to not threaten native workers. Since Card published this work in 1990, much work has been done to explain mechanisms for how this is possible.

While these results serve well to those advocating for more immigrant-friendly policies, limitations for this study must also be addressed. Miami had the highest immigrant population in the nation, as well as many industries favorable to low-skilled workers, both of which may have eased the transition and acceptance of the Mariel cohort. Nevertheless, Card’s seminal study on immigration labor shocks has held up under subsequent research and continues to be heavily referenced in literature and debates on immigration economics.

Article source: Card, David. “The Impact of the Mariel Boatlift on the Miami Labor Market.” ILR Review 43.2 (1990): 245-257.

Featured photo: cc/(MariusLtu, photo ID: 621897080, from iStock by Getty Images)