Friends or Strangers? Examining the Theoretical and Empirical Evidence on Immigration

In 1990, the federal government of the United States passed a bill to allow an increase in legal immigration by 1.2 million until 1994. Many questions concerning immigration have been detailed in the economics literature. They concern the effects of immigration on the earnings of the native born, immigration as a form of worker‐sorting, and the allocation schemes concerning the immigration of skilled and on‐skilled workers. Examines the theoretical and empirical answers to these questions. Points out that an examination of immigrant earnings over time often depends on the type of model selected, cohort or cross‐sectional analysis. Also, many immigrants seek a political and economic environment that promotes self‐employment as a form of worker‐sorting. Also of interest, theoretical debate is provided on the ature of immigration, being either political or economic . The debate over immigration has many policy implications for the 1990s, because of the first changes in immigration restrictions since Simpson‐Rodino of 1965.