Immigration and the labor market: Lessons from David Card's Mariel boatlift study

David Card, a prominent economist, conducted extensive research on immigration and its impact on the labor market. 

01 Mar 2023 6 min read
Share this page

His groundbreaking study on the Mariel boatlift has challenged conventional wisdom and led to a more nuanced understanding of the labor market effects of immigration.

Is immigration beneficial for the economy?

Immigration today is one of the most hotly debated topics, particularly within politics and economics. But it wasn’t always the case according to one economist.

“Historically, immigration was seen as a positive force for the economy by most economists,” says Nobel economist David Card. “The only concern was that there might be some negative effect on low skilled workers who are most competitive with low skilled immigrants. My research has suggested that those negative effects for workers are fairly small.”

Did the Mariel boatlift challenge economic assumptions?

Card has made significant contributions to the field of labor economics. One of his most well-known studies is his research on the Mariel boatlift, which took place in 1980 when Fidel Castro allowed around 150,000 Cubans to leave the country through the port of Mariel.

“I was thinking of that as a natural experiment in the sense that no one in Miami thought that was going to happen,” he says. “And it was creating a fairly large increase in the number of lower skilled workers who were looking for work in Miami. And so, I compared what happened to Miami to four other cities, which were the control group.”

Card's study, "The Impact of the Mariel Boatlift on the Miami Labor Market," challenged the conventional wisdom at the time that the influx of refugees would lead to a large increase in unemployment and lower wages for American workers. Using a sophisticated statistical methodology, Card found that the Miami labor market grew by about seven percent after the Mariel boatlift. He also found no discernible effect on the unemployment rate or reduction in wages for other lower skilled workers and less educated workers in Miami, relative to the comparison cities. Card argued that the reason for this was that the new Cuban arrivals weren't perfect substitutes for American workers. They had different skills and were more likely to work in industries that weren't traditionally dominated by Americans, like agriculture and construction.

If we have more people and we can get them working with more machines, we can actually have more people and not necessarily lower wages.

Has this question inspired you?

Get the latest Nobel Perspectives updates delivered to you.

Is the Malthusian model still relevant to the immigration and labor market?

Card's research on the Mariel boatlift has had an impact on the way economists and policymakers think about immigration and its impact on the labor market. It's led to a more nuanced understanding of the labor market effects of immigration and challenged the notion that immigrants are a threat to local workers. But in order to reach these conclusions, Card also looked back, way back.

“A lot of people have in mind a model of the labor market that I call the Malthusian model,” he says. “Malthus was a famous economist and philosopher in the 1820s who wrote a book about human misery. And he said that the way humans work is they keep having babies until the babies starve to death. And so, we have this problem that we have too many people and everybody is crowding each other out and forcing us to have really low standard of living.”

Malthus' views were formed by examining human behavior and living conditions during the medieval times, and Card says that thinking for this particular time period is both fair and accurate. Economists, however, began changing their views once they realized it wasn’t the full story.

“If we have more people and we can get them working with more machines, more equipment, we can actually have more people and not necessarily lower wages,” says Card. “These days, most people don't think that if we have more babies in the economy, we're going to be worse off. In fact, most countries these days are worried about the opposite problem. Many countries are facing concerns about low fertility and aging populations.”

“However, when it comes to immigration, this view comes back,” he continues. “I think it comes back because there's a set of people who are opposed to immigration and this is an easy way to think about why they don't like immigration. They think more people are going to be worse off.”

Card maintains a modern perspective on the topic and believes that with more people, more machinery, and more housing, we can maintain a higher level of living even as the population continues to grow. He also believes that a widespread mindset shift is necessary when considering the impact of immigration on the labor market.

Are people opposed to immigration due to language, religion, and race?

“The focus on low skilled workers comes from a general belief, which is incorrect, but that most immigrants are very low skilled,” he says. “In the US that's not true. The average immigrant has about the same level of education as the average native. In fact, in terms of Master's degrees and PhDs, the average immigrant has a higher level of education than natives. But I don't think that's the main reason why people are opposed to immigration. They speak different languages, they might be a different religion. In many cases there are different racial groups, and many people are strongly concerned about that particular aspect of society. They like to have a society that is the same ethnicity and language and religion as themselves, and they feel threatened by these other groups."

Addressing these complex views within society at large is a much more complicated issue to tackle. But it’s another tangible instance of how economics can help us better explain the world we live in and offer new ways to move forward collectively.

People Also Asked

Recommended reading

Learn more about this Laureate

What drives wage inequality?

David E. Card

Nobel Laureate, 2021

Has this question inspired you?

Get the latest Nobel Perspectives updates delivered to you.