Immigration and the Stock Market: How Immigration Policy Affects the Stock Prices of Firms that Employ Low-Skilled Workers
Labor-intensive industries such as construction, agriculture and manufacturing rely heavily on immigrant labor, yet there has been little research on how the stock prices of companies in these industries are affected by immigration policy changes. Researchers from the Center for Growth and Opportunity at Utah State University tried to fill this research gap in “Immigration and the Stock Market: How Immigration Policy Affects the Stock Prices of Firms that Employ Low-Skilled Workers.” The authors found that average stock prices for companies in all three industries they examined rose after the passage of pro-immigration legislation. For example, after the Temporary Protected Status (TPS) order of 1999 gave legal status to Hondurans and Nicaraguans, labor-intensive firms outperformed the market for six months. Companies in immigrant labor-dependent industries also saw significant increases in stock prices following the Immigration Act of 1990, which gave legal status to undocumented Latin American Immigrants. The authors conclude that federal programs designed to increase immigration also have positive consequences for companies in industries that rely on immigrant labor.
Baker, J., & Blau, B. M. (2019). Immigration and the stock market: How immigration policy affects the stock prices of firms that employ low-skilled workers (Working Paper 2019.011). The Center for Growth and Opportunity. Retrieved from https://www.thecgo.org/wp-content/uploads/2020/04/working-paper-2019.011.pdf