Immigrants and the U.S. Economy

Why It Matters

The study delivers concrete, causal estimates of migration earnings gains, informing policymakers about the nuanced economic effects of cross‑border labor mobility.

Key Takeaways

• Linked Austrian‑German social security records to track migrant earnings.
• Co‑worker design isolates migration impact by comparing to peers.
• Sample limited to workers with pre‑migration labor history, 60% coverage.
• Returns to migration show substantial heterogeneity across gender and age.
• Findings suggest cross‑border moves resemble domestic relocations in earnings gains.

Summary

David Card, a Nobel‑winning economist, presented a fourteen‑year project linking Austria’s and Germany’s social‑security databases to measure the earnings impact of international migration. By matching individuals via name and date of birth, the team assembled a quarterly panel of 168,000 Austrians and 340,000 Germans who appear in both systems, focusing on workers with at least five to twelve quarters of pre‑migration employment.

The analysis uses a co‑worker design—comparing migrants to former colleagues—and AKM models to isolate person, firm, industry, and regional effects. Migrants are defined by the quarter they first show up in the destination country’s system, which for 95% coincides with the start of a new job. The sample includes adults aged 20‑45 who moved between 1980 and 2015, with women comprising roughly one‑third and average migration age in the early thirties.

Key findings reveal sizable earnings gains from moving across the border, but the magnitude varies dramatically by gender, age, occupation, and origin‑destination pair. For example, Austrian workers relocating to Vienna exhibit similar wage trajectories to those moving to Germany, suggesting that cross‑border moves can mimic domestic relocations when labor markets are highly integrated.

These results provide rare causal evidence on the returns to migration in a context of free labor mobility, underscoring that policy debates must account for heterogeneous effects rather than assuming uniform benefits. The methodological framework also offers a blueprint for other regions seeking to evaluate migration outcomes using administrative data.