The Often Overlooked “Pull” Factor: Border Crossings and Labor Market Tightness in the US

Dany Bahar

by

June 05, 2024

This study investigates the link between Southwest US border crossings and labor market tightness, measured by the job openings to unemployed ratio, over nearly 25 years (2000–2023). Analyzing monthly data, it finds a strong positive correlation, suggesting that increased border crossings align with greater job availability. Exploiting data across different presidential administrations reveals no statistically significant differences in this relationship, regardless of the President’s party. The findings suggest a natural economic adjustment mechanism in which crossings naturally decrease as the labor market cools.

From the paper:

In an era in which migration policies and border security dominate political debates, understanding the dynamics of border crossings into the United States requires a nuanced examination of the economic conditions that drive such movements. Amid the complex interplay of factors influencing migration, this study delves into the pivotal role of labor market tightness in the US, a measure of economic “pull,” in shaping the patterns of border crossings over nearly a quarter century.

To do so, I analyze monthly data spanning from December 2000 to January 2024, on the job openings per unemployed person, a proxy for labor market tightness as measured by the Bureau of Labor Statistics, and crossings through the US Southwest border, as reported by Customs and Border Patrol.

In particular, I show how these two series tend to comove, both visually and analytically. The comovement of both series, I find, is much more pronounced over the past few years, when the US has experienced an all-time high in border crossings, as well as an all-time high in labor market tightness. However, during those same years, there is no particular economic shock in the main immigrant-sending countries of an order of magnitude that can explain the rapid increase in border crossings.

Using nearly 25 years of data, I estimate that the elasticity of job openings per unemployed person to border crossings falls between 0.3 and 0.7, depending on whether the estimation is done with level or month-on-month (MoM) differences. I also estimate the elasticity across Democratic and Republican administrations and separately across four different presidential terms: Bush, Obama, Trump, and Biden. I do not find the relationship between border crossings and labor market tightness to be statistically different across different presidential terms. This implies that the economic foundations of border crossings transcend conventional political narratives.

The insights gleaned from this study have significant implications for the discourse on migration policy. By demonstrating the critical importance of economic “pull” factors, particularly labor market tightness, the findings challenge the prevailing policy of focusing only on enforcement and assistance to migrant-sending countries as primary means of reducing irregular border crossings. These findings indicate that the provision of legal pathways to satisfy labor market demands is part of the solution, consistently with recent work by Clemens (2024).

As such, in the presence of tight labor markets, the surge in border crossings observed during 2022 and 2023, based on the results of this paper, would have occurred in a similar magnitude regardless of who was sitting at the White House at the time, a Democrat, or a Republican. The findings also suggest that what is often perceived as a “border crisis” is, in many respects, a manifestation of the US economy’s labor demands. As such, intense periods of border crossing will tend to significantly slow down after the local labor market cools off. In this sense, my findings highlight the potential of aligning immigration policies with labor market needs, suggesting a paradigm shift towards facilitating legal pathways for migration in response to economic demand.

Read the full paper here.