Skip to main content
Menu

Main navigation

  • About
    • Annual Reports
    • Leadership
    • Jobs
    • Student Programs
    • Media Information
    • Store
    • Contact
    LOADING...
  • Experts
    • Policy Scholars
    • Adjunct Scholars
    • Fellows
  • Events
    • Upcoming
    • Past
    • Event FAQs
    • Sphere Summit
    LOADING...
  • Publications
    • Studies
    • Commentary
    • Books
    • Reviews and Journals
    • Public Filings
    LOADING...
  • Blog
  • Donate
    • Sponsorship Benefits
    • Ways to Give
    • Planned Giving

Issues

  • Constitution and Law
    • Constitutional Law
    • Criminal Justice
    • Free Speech and Civil Liberties
  • Economics
    • Banking and Finance
    • Monetary Policy
    • Regulation
    • Tax and Budget Policy
  • Politics and Society
    • Education
    • Government and Politics
    • Health Care
    • Poverty and Social Welfare
    • Technology and Privacy
  • International
    • Defense and Foreign Policy
    • Global Freedom
    • Immigration
    • Trade Policy
Live Now

Cato at Liberty


  • Blog Home
  • RSS

Email Signup

Sign up to have blog posts delivered straight to your inbox!

Topics
  • Banking and Finance
  • Constitutional Law
  • Criminal Justice
  • Defense and Foreign Policy
  • Education
  • Free Speech and Civil Liberties
  • Global Freedom
  • Government and Politics
  • Health Care
  • Immigration
  • Monetary Policy
  • Poverty and Social Welfare
  • Regulation
  • Tax and Budget Policy
  • Technology and Privacy
  • Trade Policy
Archives
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008
  • March 2008
  • February 2008
  • January 2008
  • December 2007
  • November 2007
  • October 2007
  • September 2007
  • August 2007
  • July 2007
  • June 2007
  • May 2007
  • April 2007
  • March 2007
  • February 2007
  • January 2007
  • December 2006
  • November 2006
  • October 2006
  • September 2006
  • August 2006
  • July 2006
  • June 2006
  • May 2006
  • April 2006
  • Show More
January 13, 2017 5:20PM

Further Thoughts on Mariel Boatlift

By Alex Nowrasteh

SHARE

Jason Richwine just blogged about my recent Mariel Boatlift post that confirmed George Borjas’ finding of wage increases for those with only a high school degree in post-Mariel Miami.  George Borjas understood my quick extension of his research.  Below are some of Richwine’s points and my quick responses. 

“The point is not especially interesting, since the standard immigration narrative has always been that efficiency gains come at the expense of the natives with whom immigrants most directly compete – high school dropouts, in the case of Mariel.”

It’s important to identify which skill-group of Miamians could have benefited from the Boatlift.  George Borjas pointed out in his report for the Center for Immigration Studies:  “Economic theory predicts that immigration will redistribute income by lowering the wages of competing American workers and increasing the wages of complementary American workers as well as profits for business owners and other “users” of immigrant labor.”  Borjas focused on the benefits for business owners and other “users” of immigrant labor in that paper. 

Although he argues that dropouts and workers with only a high school degree are not substitutes, he doesn’t provide evidence of potential complementarity.  In at least the Mariel case, there is some evidence of that.  My post shifts the narrative from “only businesses and the rich gain from low-skilled immigration” to “the real beneficiaries could be a much larger pool of workers who actually bothered to finish high school.”  That matters. 

Furthermore, if “efficiency gains come at the expense of natives with whom immigrants most directly compete,” then who gains in Richwine’s analysis?  The cross-skill wage elasticities for those above a high school degree are not statistically significant.  They are for workers with only a high school degree according to Table 4 in this paper by Borjas and Joan Monras.  My Mariel post is perfectly consistent with those findings. 

“But it would have been simple to determine the HS-and-below impact directly from the Borjas and Monras paper: Just take a weighted average of the dropout and graduate wage effects reported in their Table 4.  Doing that yields a negative number that does not reach statistical significance.”

I didn’t work backward from Borjas and Monras because they ended their analysis in 1984.  Using 1984 in my post would have unfairly biased my results against Borjas’ findings in his Mariel paper.  I chose 1986 because wages for dropouts were at their nadir in that year and to be consistent with Borjas’ Mariel paper. 

Furthermore, Richwine’s point that combining wages for dropouts and high school only workers yields a result that is statistically insignificant shows yet again that high school graduate wages increased to outweigh the negative wage effects on dropouts.  I don’t think Richwine intended to neutralize Borjas’ findings in exactly that way.    

“Overall, Nowrasteh frames his argument as the following: Borjas may or may not be right about Mariel lowering the wages of dropouts, but if he is, then we must also conclude that Mariel raised the wages of dropouts and high-school-only natives put together. The argument doesn't work. Across several different methodological scenarios that do not alter Borjas's conclusion, Nowrasteh's numbers – both his own and those of economists who previously studied the same question – do not tell a consistent story. His claim that accepting Borjas requires accepting that HS-and-below natives benefited from Mariel is therefore unconvincing.”

Those who swooned over Professor Borjas’ Mariel paper have consistently failed to note the increase in wages for high school graduates that Borjas and Monras discovered.  To quote their paper:

“As before, the estimated own wage effect is negative and significant, with a wage elasticity of about -0.9. Similarly, the estimate of the own employment effect is not distinguishable from zero.  The analysis, however, shows that the cross effects are numerically important.  Although the supply shock of the predominantly low-skill Marielitos lowered the wage of high school dropouts, it raised the wage of workers with a high school education, and this effect is both numerically and statistically significant. The cross-wage elasticity is about +0.7.  In addition, the unemployment rate of workers with more than a high school diploma also fell significantly [Emphasis added].”

That such dramatically different findings can result from such minor changes in methodology weakens all of the research on this topic – including mine.  Reading the work by Card, Peri and Yasenov, Borjas, and Borjas and Monras, and then conducting my own replication and extension of their results has significantly weakened my confidence in any of these findings.  For instance, weekly earnings for Hispanic dropouts between the ages of 25 and 59 increased in Miami shortly after the Boatlift (Figure 1).  Hispanic dropouts should be the most substitutable for Marielitos but they’re not according to Borjas’ methods.  This graph would well fit into David Card’s research. 

Figure 1

Weekly Earnings for Hispanic Dropouts Age 25-59

 

 

Media Name: french.png

It’s baffling how anybody can replicate these findings, look at these graphs, and maintain their confidence in this research. 

Stay Connected to Cato

Sign up for the newsletter to receive periodic updates on Cato research, events, and publications.

View All Newsletters

1000 Massachusetts Ave. NW
Washington, DC 20001-5403
202-842-0200
Contact Us
Privacy

Footer 1

  • About
    • Annual Reports
    • Leadership
    • Jobs
    • Student Programs
    • Media Information
    • Store
    • Contact
  • Podcasts

Footer 2

  • Experts
    • Policy Scholars
    • Adjunct Scholars
    • Fellows
  • Events
    • Upcoming
    • Past
    • Event FAQs
    • Sphere Summit

Footer 3

  • Publications
    • Books
    • Cato Journal
    • Regulation
    • Cato Policy Report
    • Cato Supreme Court Review
    • Cato’s Letter
    • Human Freedom Index
    • Economic Freedom of the World
    • Cato Handbook for Policymakers

Footer 4

  • Blog
  • Donate
    • Sponsorship Benefits
    • Ways to Give
    • Planned Giving
Also from Cato Institute:
Libertarianism.org
|
Humanprogress.org
|
Downsizinggovernment.org