Historical Immigration Quotas and Intergenerational Mobility: Evidence from the 1920s Border Closure

Historical Immigration Quotas and Intergenerational Mobility: Evidence from the 1920s Border Closure

A foundational question in labor economics is how immigration restrictions affect the long-run economic opportunities and upward mobility of native-born workers. While much of the contemporary literature focuses on the short-run wage and employment effects of current flows, the 1920s national-origins quotas offer the sharpest historical natural experiment: an abrupt, policy-imposed closure of a previously open labor market.

The companion wage finding: Cohen & Biddle on low-skilled wages

The wage-side evidence from the same episode — Jeff Biddle (Michigan State) and Elior Cohen (Kansas City Fed), "Immigration Restrictions and the Wages of Low-Skilled Labor: Evidence from the 1920s" (KC Fed RWP 22-12, first 2022, revised June/July 2026; presented October 2, 2026 at the Dallas Fed migration workshop with Santiago Pérez discussing) — finds restriction raised low-skilled wages:

"Using newly digitized annual wage data for low-skilled laborers from 1910–1929, we show that wages rose faster in markets more dependent on restricted-origin immigrants, with effects emerging soon after 1920, intensifying through the mid-1920s, and persisting over time¹. Evidence on wage dynamics and mechanisms indicates that these gains reflect sustained labor scarcity rather than mechanical compositional changes."

Design: the quotas "abruptly and unevenly curtailed immigration from key source countries, generating sharp labor-supply shocks across local markets" — a shift-shock exposure design on newly digitized annual wage data.

How this fits the modern evidence

The 1920s result is the historical mirror image of the modern enforcement literature (Immigration Enforcement: Native Employment Impacts and the Complementarity Trap): a large, binding supply restriction did raise low-skilled native wages — through sustained labor scarcity. The contrast with today's removal/ enforcement studies, which generally find little native gain, is informative rather than contradictory: the quota shock was (a) far larger than modern enforcement flows, (b) permanent rather than raid-like, and (c) landed in a pre-globalized economy with less scope for capital adjustment, offshoring, or output-mix response (Low-Skilled Immigration: Complementarity, Technology Adoption, and Output Mix Adjustments). The mechanism — scarcity raises wages — is consistent across both literatures; the modern open question is whether enforcement can ever replicate a quota-scale scarcity shock.