Job Vacancies and Immigration: Evidence From Pre- and Post-Mariel Miami

This paper examines the impact of immigration on labor market opportunities in the United States. The authors exploit the Conference Board’s Help-Wanted Index (HWI), a monthly job vacancy index that counted the number of help-wanted ads published in local newspapers in 51 metropolitan areas in the United States between 1951 and 2010. The index is highly correlated with various measures of labor market conditions. The authors begin by analyzing the impact of the Mariel boatlift, a migration of 125,000 Cubans from Cuba’s Mariel Harbor to the United States between April and October 1980. Most of these immigrants chose to settle in the Miami metropolitan area, increasing the overall labor supply by 8.4 percent. The supply shock disproportionately increased the size of the low-skill workforce; the number of workers in Miami without a high school diploma increased by 18.4 percent. The authors find a marked decrease in Miami’s HWI relative to many alternative control groups in the first 4 or 5 years after Mariel, followed by recovery afterwards. The authors find a similar initial decline in the number of job vacancies after two other supply shocks in Miami: (a) the initial wave of Cuban refugees that arrived between 1960 and 1962 (before the Cuban missile crisis abruptly stopped the flow) that increased the labor supply in Miami by almost 17 percent; and (b) the 1995 refugees, initially detoured to Guantanamo Bay, who increased the labor supply in Miami by 3.9 percent. The authors also examine correlations between changes in the HWI and immigration across metropolitan areas, and show that more immigration is associated with fewer job vacancies despite the obvious endogeneity bias created by the non-random settlement of immigrants in cities where there are job openings. The authors suggest that these results reflect changing labor market conditions for low-skill workers (in terms of both wages and employment). They conclude that immigration-induced supply shocks are followed by a short-run period of slackness in the local labor market, as measured by the number of advertised job openings, however the local labor market returns to its pre-immigration equilibrium within 5 to 10 years.