THE IMPACT OF THE MARIEL BOATLIFT ON THE

MIAMI LABOR MARKET

David Card

May 25, 2020

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Immigration

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Immigration

terrorism
crime
creating burden on existing welfare services - Medicaid in USA
impact on the employment opportunities and wages of natives

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Immigration

What effect do immigrants have on the wage structure?

How do immigrants do in the labor market and what do they do to
the labor market?

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Literature before Card(1970)

Greenwood, Michael, and John McDowell. 1984. ”The Factor Market

Consequences of U.S. Immigration.” Journal of Economic Literature,
Vol. 34 (December), pp. 1738-72
Grossman, Jean. 1982. ”The Substitutability of Natives and
Immigrants in Production.” Review of Economics and Statistics, Vol.
64 (November), pp.596-603.
Borjas, George. 1987. ”Immigrants, Minorities, and Labor Market
Competition.” Indtistrial and Labor Relations Review, Vol. 40 (April),
pp. 382-92

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Two views on the findings :

Immigrants have, on average, only slightly lower skills than the

native population.
The locational choices of immigrants and natives presumably
depend on expected labor market opportunities.

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Innovation of the paper

Uses a natural experiment that study the impact of an exogenous

increase in supply of immigrants to a particular labor market.

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Background

April 1, 1980 : a dozen Cubans broke into the Peruvian embassy

seeking asylum
April 6,190 : the number increased to 10,000
April 20,1980 : Castro states that the port of Mariel would be opened
to anyone wishing to leave Cuba, as long as they had someone to pick
them up.
Cuban exiles arrange for boats to pick the refugees

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Background and Stylized facts

From May to September 1980, some 125,000 Cuban immigrants

arrive in Miami.
50 per cent immigrants settled permanently in Miami.
7 per cent increase in the labor force of Miami
20 per cent increase in the number of Cuban workers in Miami

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Data

CPS sample is large for Miami metropolitan area : 1200 individuals

per month.
A comprehensive picture of Miami labor market just before the
boatlift from 1980 Census which was conducted on April 1, 1980
Cubans are identified separately which makes estimating wage rates
and employment effects as a consequence of Mariel immigration for
Cubans and non-Cubans separately possible

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Overview of the Miami labor market: Stylized facts

At the time of 1980 Census: 35.5 per cent of residents were

foreign-born. Of these, 56 per cent were Cubans.
A significant black population : 17.3 per cent.

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Table 1

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Composition of the Mariel Immigrants

Mariel Immigration added approximately 7 per cent to the Miami

labor force.
The immigrants included a relatively high proportion of less-skilled
workers and a high fraction of individuals with low-english speaking
skills

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Table 2

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Table 2

56.5 per cent were high school drop-outs.

The unadjusted wage gap was 34 per cent attributable partly to lower
educational levels and younger ages of the Mariels.
Controlling for education, experience and gender, a simple linear
regression for log average hourly earnings in 1984 fitted to the sample
of Cubans suggests that Mariels earned 18 per cent lesser than other
Cubans. This possibly reflects lower language ability and shorter
assimilation time in the States.

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Effect of the Mariel Immigration on the Miami labor
market

May 17, 1980 : a three day riot in black neighbourhoods killing 13

Miami unemployment rate went up from 5 per cent in April to 7.1 per
cent in July.

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Table 3 description

For comparative purposes, Card looks at similar data for 4 other cities :
Atlanta, Los Angeles, Houston and Tampa-St. Petersburg
relatively large populations of blacks and Hispanics
economic conditions were similar between 1976 and 1984

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Table 3

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Table 3

Real earning levels for Whites remained fairly constant between 1979
and 1985 in Miami and the comparison cities
Black wages were roughly constant from 1979 to 1980, fell in 1982
and 1983 and rose to previous levels in 1984
Slight dip in 1982-83 for wages non-Cuban Hispanics.Otherwise, fairly
stable.
Decline in wage rates of Cubans from 1979 to 1982

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Table 3

This data does not provide any evidence of a negative impact of the
Mariel immigration on wages of Non-Cubans in Miami.
For Cubans, the decline is consistent with the addition of around
45,000 Mariel workers to the pool of Cuban workers in Miami and
with the 34 per cent wage differentials between Mariels and other
Cubans.

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Table 4

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Table 4

For whites, the unemployment rates were remarkably stable.

For blacks, the unemployment rates were 2-5 per cent lower than the
comparison cities from 1979-1981 and equaled or exceeded those in
comparison cities from 1982-1984.
Sizable increase for Cubans, which is can be explained with
unemployment rate of 20 per cent among the Mariels themselves.

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Description for Table 5

Fitted a linear regression for the log of hourly earnings to workers in

comparison cities.
Explanatory variables in this included education, experience, squared
experience, dummies for gender and race groups and interactions of
gender-race indicators with experience and squared experience.
Used estimated coefficients to form a predicted wage for each
Non-Cuban worker in Miami and sorted them into quartiles

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Table 5

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Table 5

Apart from the temporary increase in relative wages, the distribution

of non-Cubans’ wages in Miami labor market was stable between
1979-195

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Description of Table 6

Separately analyses the set of all blacks and the set of blacks with less
than 12 years of education.
Depicts both the unadjusted difference in log and a regression
adjusted differential which controls for education, gender, marital
status, part-time status, private/public employment and experience

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Table 6

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Table 6

The wage differential for blacks in Miami and comparison cities,

decreased only slightly between 1979 and 1981.
The differential was more pronounced in 1982 . The lag indicates, it
was possibly due to the 1982-83 recession than due to the Mariel
influx of immigrants.
By 1985, the wage gap was 5 per cent for all black workers and
actually positive for less-educated blacks.
Evidence of decline in employment to population ratio between
1979-85 which seems to have started in 1982. less pronounced in
less-educated blacks.

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Table 7

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Table 7

The actual log Cuban wages shows a decline of 9 per cent between
1979 and 1985. This was a result of two complementary factors.
6 per cent was due to the decline in the ”quality” of the Cuban labor
force in Miami. Two thirds of the wage gap is attributed to the
changing productivity levels of the Cuban labor force.
The remaining 3 per cent is due to the quality adjusted wage gap
between Cuban workers in Miami and Hispanic workers in the
comparison cities. That is, one third of the wage gap is
attributed to the decline in returns to skills for Cubans in the
Miami labor market because of the influx of immigrants.

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Table 7

The difference between the means of the first and the fourth quartiles
is 9 percent higher in 1984 than 1979, but then the gap narrows to
only 2 per cent in 1985.
This is indicative of the decline in earnings for the Cubans at the
lower end of the distribution due to the Mariel immigration
(Indicative of the substitutability)
Assessing the difference between the effect of Miami and elsewhere in
the USA. Since, the fraction of the Mariels in Miami and res of US is
roughly the same, it controls for any unobservable difference (say in
the language ability) between the Mariels and the rest of the Cuban
immigrants. The differentials so calculated are roughly the same
between 1979 and 1984.

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Table 7

The 1985 difference indicates a slightly higher wage for the Cubans
outside of Miami. But, more importantly no significant difference in
the wages in the year immediately following the boatlift.
Since the wages are constant for Cubans outside of Miami, the
downturn could be attributed the dilution of the Cuban labor force
with less-skilled immigrants.

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Main Results

The Mariel immigration had no effect on the wages or employment

outcomes of the non-Cuban workers in the Miami labor market.
The Mariel immigration had no strong effects on the wages of other
Cubans. The observed decline in average Cuban wage is no larger
than would be expected by simply adding a pool of low-skilled Cubans
to the existing Cuban population. This is consistent with the
comparison of Cuban wages inside and outside Miami which shows no
relative change over the period studied.

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Interpretation of Results

Perhaps, Mariels displaced other immigrants and natives who would

have moved in Miami in early 1980s had the Boatlift not happened.
Some evidence is from the fact, the Miami population grew at an
annual rate of 2.5 per cent, while the population of the rest of Florida
grew at a rate of 4.9 per cent.

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Interpretation of Results

A second explanation for the rapid absorption of the Marie1

immigrants is the growth of industries that utilize relatively unskilled
labor.
Data suggests that the industry distribution in Miami in the late
1970s was well suited to handle an influx of unskilled immigrants (a
prominent textile and apparel industry).
Although employment in immigrant-intensive industries did not
expand after the Boatlift, and the Cuban share of employment in
these industries was relatively stable, the Mariels may have simply
replaced earlier cohorts of Cuban immigrants as the latter moved to
more desirable jobs.

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Borjas(2016) and Borjas(2003)
The mariel immigrants were disproportionately low-skill; around 60
per cent were high school dropouts and only 10 per cent were college
graduates..
As a result even though the Mariel supply shock increased the number
of workers by 7 per cent, it increased the number of high school drop
outs by almost 20 per cent.
By focusing on a very specific skill group, an entirely different result is
obtained.
Difference also lies in the choice of the placebo group.
”Employment placebo”.He looks at cities with comparable economic
growth in 1977-1980 . (Anaheim, Rochester, Nassau-Suffolk and San
Jose). The decline is 35 per cent with respect to this synthetic
control as opposed to 22 per cent with the Card placebo.
”Low-skill placebo”. Cities which had similar pre-mariel growth for
low-skill employment. (Los Angeles, Houston Gary and Indianapolis).
Finds that the Miami experience was unusual in 1980 with a wage
drop of 30 per cent.
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 The End

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