hw-7 - University of Illinois at Urbana-Champaign Professor...

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University of Illinois at Urbana-Champaign Professor Ron Laschever, ECON 440, Spring 2011 1 Problem set #7 (and last) 1. Indicate whether each statement is true or false, and support your answer with a 1-3 sentence explanation. A. On April 20, 1980, Fidel Castro declared that any Cubans wishing to emigrate to the U.S. were free to leave from the Port of Mariel. From May to September 1980, 125,000 immigrants arrived in Miami on privately chartered boats. This large influx of immigrants became known as the Mariel Boatlift. (yes, the book does discuss the Mariel Boatlift too). True or false: Evidence from the impact of the 1980 Mariel Boatlift indicates immigrants tend to reduce the wages of low-skilled workers in the United States. [10 Points] False. Though the theoretical prediction is that wages would go down, the (striking) empirical finding is that there was little if any effect. You may want to think of several reasons for this finding such as perhaps the immigration wave wasn’t large enough to have an effect, people moved to other cities, etc. This illustrates the importance of doing (credible) empirical work. It’s ok if you answer true or false, as long as you convey that theory says it will go down, but empirics showed little effect. B. One possible calculation (as we’ll see in class) indicates that the net gain to the U.S. economy from immigration is positive, but very small, on the order of 0.1 percent of GDP. True or false: Given that immigration has a small and positive effect on the overall economy, everyone should be in favor of increased immigration on economic grounds. [10 points] False. We’ve seen that different groups may be positively or negatively affected. For
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This note was uploaded on 06/13/2011 for the course ECON 440 taught by Professor Staff during the Fall '08 term at University of Illinois, Urbana Champaign.

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hw-7 - University of Illinois at Urbana-Champaign Professor...

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