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 short-run wage and employment impacts, a major empirical study by James J. Feigenbaum, Yi-Ju Hung, Marco Tabellini, and Monia Tomasella (2026, NBER Working Paper No. 34775) exploits a historical natural experiment to evaluate these effects over generations.

The Natural Experiment: The 1920s US Quota Acts

The US Emergency Quota Act of 1921 and the National Origins Act of 1924 abruptly ended the "Age of Mass Migration," during which over 30 million Europeans had entered the United States. The quotas sharply curtailed immigration from Southern and Eastern Europe while maintaining relatively generous caps for Northern and Western Europe.

Because historical immigrant communities were unevenly distributed across the country, counties with larger pre-existing populations of Southern and Eastern European immigrants experienced a sudden and severe contraction in immigrant inflows compared to less exposed counties. The authors exploit this geographic variation to measure county-level "quota exposure" and link individual-level historical census data (1900 and 1920 full-count censuses) to adult labor market outcomes in 1920 and 1940.

Key Findings: The Divergent Impacts of Restrictions

The study reveals that the long-run effects of immigration restrictions are highly uneven and depend on whether native workers substitute for or complement immigrant labor.

1. Negative Effects on US-Born White Men (Complementarity)

For US-born white men (born to US-born parents), growing up in counties with higher quota exposure significantly reduced their long-run economic standing:

• Reduced Upward Mobility: A 5-percentage-point increase in county-level quota exposure reduced the probability of absolute intergenerational occupational mobility (surpassing one's father in occupational status) by 1.9 percentage points, or about 4% relative to the mean.
• Lower Adult Wages: In adulthood, white men from highly exposed counties earned 2.6% lower weekly wages and 2.3% lower hourly wages in 1940.
• Lower Educational Attainment: Exposure to the quotas modestly reduced high school graduation rates and educational investment among white youth.

The authors show that these negative impacts are driven by the loss of immigrant-native complementarities. Historically, low-skilled European immigrants acted as complements to native-born white workers, enabling task specialization and pushing native whites into higher-paying, more specialized, or managerial roles. When these complementary immigrant workers disappeared, local productivity and upward mobility for native whites declined.¹

2. Modest Positive Effects on US-Born Black Men (Substitution)

For US-born Black men, the economic impacts of the quotas were positive, though imprecisely estimated:

• Increased Mobility and Wages: Quota exposure was associated with a positive shift in intergenerational mobility and adult wages.
• The Substitution Mechanism: Unlike native whites, Black workers in the early 20th century were close substitutes for low-skilled European immigrants in manual and industrial occupations. By shutting off the supply of competing foreign-born workers, the quotas reduced labor market competition for Black men, modestly improving their occupational advancement.

Economic Implications for Modern Policy

This research demonstrates that immigration restrictions do not have a uniform effect on native-born workers. Instead, they reshape the distribution of economic opportunity across groups:

"Policies that harm some may leave others unaffected or even slightly better off, depending on patterns of substitution and complementarity in local labor markets."

By focusing solely on short-run wage competition, policy debates often overlook how restricting low-skilled immigration can disrupt complementarities, lower aggregate productivity, and slow upward mobility for the next generation of native workers.