The Impact of the Mariel Boatlift on the Miami Labor Market
The Impact of the Mariel Boatlift on the Miami Labor Market
David Card
Industrial and Labor Relations Review, Vol. 43, No. 2. (Jan., 1990), pp. 245-257.
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http://www.jstor.org Wed Jun 27 22:35:26 2007 THE IMPACT OF THE MARIEL BOATLIFT ON THE MIAMI LABOR MARKET
DAVID CARD*
Using data from the Current Population Survey, this paper describes the effect of the Marie1 Boatlift of 1980 on the Miami labor market. The Marie1 immigrants increased the Miami labor force by 7%, and the percentage increase in labor supply to less-skilled occupations and industries was even greater because most of the immigrants were relatively unskilled. Nevertheless, the Marie1 influx appears to have had virtually no effect on the wages or unemployment rates of less-skilled workers, even among Cubans who had immigrated earlier. The author suggests that the ability of Miami's labor market to rapidly absorb the Marie1 immigrants was largely owing to its adjustment to other large waves of immigrants in the two decades before the Marie1 Boatlift.
NE of the chief concerns of immigra- natives. Second, the locational choices of 0tion policy-makers is the extent to immigrants and natives presumably de- which immigrants depress the labor mar- pend on expected labor market opportu- ket opportunities of less-skilled natives. nities. Immigrants tend to move to cities Despite the presumption that an influx of where the growth in demand for labor can immigrants will substantially reduce native accommodate their supply. Even if new wages, existing empirical studies suggest immigrants cluster in only a few cities (as that the effect is small. (See the survey by they do in the United States), inter-city Greenwood and McDowell [I9861 and migration of natives will tend to offset the studies by Grossman [1982], Borjas [1987], adverse effects of immigration. and Lalonde and Tope1 [1987].) There are These considerations illustrate the diffi- two leading explanations for this finding. culty of using the correlation across cities First, immigrants have, on average, only between wages and immigrant densities to slightly lower skills than the native popu- measure the effect of immigration" on the lation. Thus, econometric studies based on labor market opportunities of natives. They the distribution of the existing stock of also underscore the value of a natural ex- immigrants probably understate the effect periment that corresponds more closely to of unskilled immigration on less-skilled an exogenous increase in the supply of im- migrants to a particular labor market. The experiences of the Miami labor The author is Professor of Economics, Princeton Cniversity. He thanks George Borjas, Alan Krueger, market in the aftermath of the Marie1 Bruce Meyer, and seminar participants at Princeton Boatlift form one such experiment. From University for their comments. Mav to Se~tember1980. some 125,000 , 1 A data appendix with copies of the computer Cuban immigrants arrived in Miami on a programs used to generate the tables in this paper is available from the author at the Industrial Relations flotilla of privately chartered boats. Their Section, Firestone Library, Princeton University, arrival was the conseauence1 of an unlikelv Princeton, SJ 08544. sequence of events culminating in Castro's
Indu~trialand Labor Helnttons Reutew, Vol. 43, So. 2 (January 1990). 0 by Cornell University 0019-7939190/4302 $01 .OO 246 INDUSTRIAL AND LABOR RELATIONS REVIEW declaration on April 20, 1980, that Cubans Angeles, the city with the next-highest wishing to emigrate to the United States immigrant fraction, and 6.1% nationwide. were free to leave from the port of At the time of the Census, 56% of Mariel.' Fifty percent of the Marie1 immi- immigrants in Miami were of Cuban grants settled permanently in Miami. The origin. The remaining foreign-born resi- result was a 7% increase in the labor force dents, who accounted for 16% of the of Miami and a 20% increase in the Miami population, included other His- number of Cuban workers in Miami. panic groups and a broad selection of This paper summarizes the effects of Caribbean and European nationals. the Boatlift on the Miami labor market, Miami also has a significant black popu- focusing on wages and unemployn~ent lation. The fraction of black residents was rates of less-skilled workers. The analysis 15.0% in 1970 and had increased to 17.3% is based on individual micro-data for by the time of the 1980 Census. The large 1979-85 from the merged outgoing rota- concentrations of both immigrants and tion group samples of the Current Popu- blacks makes Miami ideal for studying the lation Survey (CPS). effect of increased immigration on the Three features of the Marie1 incident labor market opportunities of black na- and the .Census data greatly facilitate the tives. analysis. First, the CPS sample of the Table 1 describes the four major groups Miami metropolitan area is relatively large: in the Miami labor force in 1979: white roughly 1,200 individuals per month. non-Hispanics; black non-Hispanics; Cu- Second, a comprehensive picture of the bans (foreign-born and native-born); and Miami labor market in the months just other Hispanics. For simplicity, I have before the Marie1 Boatlift is available from restricted attention to individuals age the 1980 Census, which was conducted on 16-6 1, a group that represents roughly April 1, 1980. Finally, unlike most other 60% of the Miami population. The frac- ethnic groups, Cubans are separately tions of Cubans and blacks in the 16-61 identified in the CPS questionnaire. Thus, age group are 27.2% and 26.3%, respec- it is possible to estimate wage rates, tively, and the fractions of white non- unemployment rates, and other economic Hispanics and non-Cuban Hispanics are indicators for both Cubans and non- 34.4% and 11.1%. Overall. 73% of 16- Cubans in the Miami labor market, and to 61-year-olds participated in the labor measure the effects of the Marie1 immigra- force, with somewhat higher rates among tion on the two groups separately. whites and Cubans and lower rates among blacks and other Hispanics. Education levels in Miami are somewhat below the Overview of the Miami Labor national average: the mean of completed Market Before the Boatlift education for 16-6 1-year-olds in 1979 was For at least a decade prior to the Marie1 11.8 years in Miami, compared with 12.2
Boatlift, Miami was the most immigrant- vearsi nationwide. intensive city in the country. Tabulations The occupation distributions in rows from the 1980 Census indicate that 35.5% 7-17 of Table 1 give a crude indication of of residents in the Miami Standard Metro- the degree of labor market competition politan Statistical Area (SMSA) were for- among the four groups. Cubans and other eign-born,2 compared to 22.3% in Los Hispanics have very similar occupation distributions, with a higher representation 'See Masud-Piloto (1988, chaps. 6-7) for an in craft and operative occupations than overview of the political developments that led to the either whites or blacks. Blacks are more
Mariel Boatlift. hi~hlv0,concentrated in laborer and service- See U.S. Department of Commerce (1983). The related occupations, and are significantly Miami SMSA consists of Dade County, and includes Miami City as well as a number of smaller towns and under-represented in managerial occupa- cities. Throughout this paper, I use "hIia~ni"to refer tions. to this broader geographic region. A useful summary measure of the THE MARIEL BOATLIFT
Tnble 7. Characteristics of 16-61-Year-Olds in Miami, 1979. Chnracterictic Ilil~ites Black Cubans likpanzcs All Chamcl
"erou~,.~ I This lrldex has the simule form teristics or final destinations of tlie immi- C,s,,r,, / c,, where s?, is the fraction of grants. This section summarizes some of \corkers of group 1 in occupatio~lj, s,, is the available information, including data from the March 1983 Mobility Supple- the fractioc of workers of vrouD" 1 2 in occupation 1, and s, is the fraction of all ment to the Current Population Survey, workers in occupation J. Based on the which allows Marie1 immigrants to be distrib~itioris in Table 1, an inflow of distinguished from other Cubans. immigrants resulting in a one percentage Most sources estimate the number- of point increase in the fraction of Cubans in Marie1 immigrants at between 120,000 Miami xvould lead to a weighted average and 125,000. A recent Census Bureau increase of .95% in the si~pplyof labor to report (1J.S. Department of C'~ornmerce occupations held by whites. Under the 1988:9) states that 126,000 refugees en- same conditions the increase would be tered the LJnited States as "Cuban En- .99% for blacks, 1.025% for non-Cuban trant,~" (the special immigration status Hispanics, and 1.065%for Cubans them- awarded to the Marie1 refugees) between selves. These calculations suggest that the April 1980 and June 198 1. Based on the overlap bet,ween the occupational djstribu- settlement of earlier Cubans, it is tioris of t!le four groups is relatively high. widely assumed that about oile-half of these refugees settled permalently in 5 -rhi4 irlclex is derived in Altonji and Card Miami. The Census Bureau "Experimen- (1989: 15-16). tal County Population Estimates" file 248 INDUSTRIAL AND LABOR RELATIONS REVIEW shows an increase of 80,500 in the Dade native-born Cubans, the March 1985 Mo- County population between April 1 and bility Supplement survey asked each re- July 1 of 1980; 59,800 of these new spondent where he or she lived in March entrants were age 16-61. My own tabula- 1980 (one month before the start of the tions from the CPS indicate that the Boatlift). Table 2 presents a descriptive Cuban share of the 16-61 age group summary of the Cuban population inter- increased from 27% in 1979 to 33% in viewed in this survey, classified by whether 1981.4A similar increase is registered in the respondent claimed to be living abroad CPS-based estimates of the Cuban share of or in the United States five years earlier. the 16-6 1-year-old labor force, which The sample sizes, particularly of post-1980 changed from 37.2% in 1979 to 44.8% in entrants. are small.' Nevertheless. these 1981. Assuming that the Cuban share of data confirm the general impression that the labor force would have remained Mariels, on average, have less education, constant between 1979 and 1981 in the are somewhat younger, and are more absence of the Boatlift, these figures likely to be male than other Cubans. The suggest that the Marie1 immigration added figures in Table 2 also suggest that the approximately 45,000 to the Miami labor Mariels have lower labor force attachment force-an increase of 7%. and lower occu~ationalattainment than From the first days of the Boatlift, the other Cubans. Mariels are more heavily characteristics of the Marie1 immigrants concentrated in laborer and service occu- (hereafter referred to as Mariels) have ~ations.and are less likelv to hold sales. been a subject of controversy. Among clerical, and craft jobs. those who were permitted to leave Cuba The unadjusted wage gap between were several hundred inmates of mental Mariels and other Cubans is 34%. Part of hospitals and jails. Many of these individ- this differential is clearly attributable to uals were arrested by immigration officials the lower education levels and younger upon their arrival in the United States, ages of the Mariels. A simple linear and over 1,000 were sent to a special regression for the logarithm of average prison facility in Atlanta to await deporta- hourly earnings fitted to the sample of tion back to Cuba.5 A similar number were Cubans with earnings in 1984 suggests arrested for crimes committed in the that the Mariels earned 18% lower wages United States, and they still await determi- than other Cubans, controlling for educa- nation of their ultimate immigration sta- tion, potential experience, and gender t ~ Contemporary. ~ reports indicate that (the standard error of this estimate is .08). the Mariels included a relatively high This gap presumably reflects the combina- fraction of less-skilled workers and a high tion of lower language ability and a fraction of individuals with low English shorter assimilation time in the United ability (Business Week 1980). States among the Mariels, as well as any Although the regular Current Popula- differences in abilitv, or motivation be- tion Survey questionnaire does not distin- tween the earlier and later Cuban immi- guish Mariels from other foreign and grants.
These tabulations are presented in greater detail The Effect of the in an earlier ~ersionof this paper (Card 1989, Table Marie1 Immigration on the Miami Labor Market ')" See Masud-Pihto (1988:100-103) Under a 1984 agreement a total of 2,700 Marie1 immigrants were to Observers in Miami at the time of the be returned to Cuba. Boatlift noted the strain caused by the Mariel immigrants were blamed for, and indeed seem to ha~ecommitted, many crimes in the first few Marie1 immigration. The homicide rate months after the Boatlift. U'ilbanks (1984) reported that 38 of the 574 homicides in Miami in 1980 were 'The weighted count of all Cubans in the March committed by Mariel immigrants. Disaffected Mariels 1985 CPS who entered the United States after 1980 were involved in 6 airline highjacking attempts in is 85,800, which is only 69% of the estimated 125,000 August 1980. See Masud-Piloto (1988:95-96). Mariel refugees. THE MARIEL BOATLIFT 249
Table 2. Characteristics of Marie1 Immigrants to 7.1% in July. Over the same period and Other Cubans: Tabulations from March state and national unemployment rates 1985 CPS. followed a similar pattern, suggesting Mallel All other that the changes in Miami were not Characterlst~c Immz,qants Cz~bnns solely a response to the Marie1 influx. Nevertheless, widespread joblessness of Educational Attainment (Percent of Population in Each refugees throughout the summer of 1980 Category): contributed to a perception that labor No High School 56.5 25.4 market opportunities for less-skilled na- Some High School 9.1 13.3 tives were threatened by the Marie1 immi- Completed High School 9.5 33.4 grant~.~ Some College 6.8 12.0 Tables 3 and 4 present simple averages Completed College 18.1 15.8 of wage rates and unemploynlent rates for Percent Male 55.6 50.7 whites, blacks, Cubans, and other Hispan- Percent Under 30 in 1980 38.7 29.6 ics in the Miami labor market between Mean Age in 1980 (Years) 34.9 38.0 1979 and 1985. For comparative pur- Percent in hliami in 1985 53.9 52.4 poses, I have assembled similar data for Percent Worked in 1984 60.6 73.4 whites, blacks, and Hispanics in four other Mean Log Hourly Earnings 1.37 1.71 cities: Atlanta, Los Angeles, Houston, and Occupation Distribution (Percent Tampa-St. Petersburg. These four cities Elnployed in Each Category): were selected both because they had ProfessionaVManagers 19.3 21.0 'Technical 0.0 1.5 relatively large populations of blacks and Sales 4.5 11.2 Hispanics and because they exhibited a Clerical 2.5 13.5 pattern of economic growth similar to that Crafts~nen 9.5 19.9 in Miami over the late 1970s and early Operatives 19.1 13.8 1980s. A comparison of employment Transportatio~~Ops. 3.8 4.3 growth rates (based on establishment-level Laborers 10.8 3.3 Farm Workers 0.0 1.8 data) suggests that economic conditions Less-Skilled Service 26.0 7.4 were very similar in Miami and the More-Skilled Ser~ice 4.6 2.3 average of the four comparison cities Sample Size 50 528 between 1976 and 1984. Weighted Count 42,300 476,900 The wage data in Table 3 reveal several Note: The sample consists of all Cubans in the features of the Miami labor market. March 1985 Current Population Sur~eyage 21-66 Perhaps most obvious is that earnings are (i.e., age 16-61 in 1980). Mariel immigrants are lower in Miami than in the comparison identified as those Cubans who stated that they lived outside the United States 5 years previously. cities. The differentials in 1979 ranged from 8% for whites to 15% for blacks. increased nearly 30% between 1979 and More surprising is that real earnings levels 1980 (see Wilbanks 1984:142). On the of whites in both Miami and the compari- weekend of May 17, 1980, a three-day riot son cities were fairly constant between occurred in several black neighborhoods, 1979 and 1983. This pattern contrasts killing 13. A government-sponsored com- with the general decline in real wages in mittee that was set up to investigate the the U.S. economy over this period (see riot identified other long-standing griev- Round and Johnson 1989:5-6) and under- ances in the black community as its cause, scores the relatively close correspondence but cited the labor market competition of between economic conditions in Miami Cuban refugees as an important back- and the comparison cities. ground factor (Governor of Florida 1980: 14-13). For example, a Florida State Employment Ser- Another widely cited indicator of the vice official and a Department of Labor Wage and Hours Di~isionofficial noted downward pressure on labor market pressure created by the wages and working conditions in the unskilled Marie1 influx is the Miami unemployment segment of the Miami labor market (Busirzess Week rate, which rose from 5.0% in April 1980 1980). 250 INDUSTRIAL AND LABOR RELATIONS REVIEW
Table 3. Logarithms of Real Hourly Earnings of Workers .4ge 1G-61 in hliami and Four Comparison Cities, 1979-85. Groufi I979 1980 1981 1982 I983 1984 1985 ;\4inmz: Whites i.85 i.03) Blacks 1.59 (.03) Cubans 138 (.02) Hirpariics 1.32 i.04) Cornpat-ison Czti~~: Whites 1.93 I .90 1.91 1.91 1.90 1.91 1.92 (.01) (.01) (.01) (.01) (.01) Blacks 1.74 1.70 1.72 1.71 1.69 1.67 1.65 (.01) (.02) (.02) (.0i) c.02) (.02! (.03) Hisi~anics 1.6.5 1.63 1.61 1.61 1.58 1.60 1.58
.Vote: Entries represent ~~leansuf log hourly earnings (deflated by the Cotisunier Price Index- 1980= 100) fur \vurkers age 16-61 in hliarni arid four comparison cities: Atlal~ta,Houston, Los Angeies, and 'T'ampa-St. Petersburg. See note to ?'able 1 for definitioris of groups. Sot~rre:Based on samples of employed workers in the outgoing rotatiori groups uf the Currel-it Pupul;ttion Survey in 1979-85. Due to a change in SSISA coding procedures in 1985, the 1985 sample is based on individuals in outgoing rotation groups Tor January-June of 1985 only.
In cor~trastto ;he pattern for whites, the either in the immediate post -l\/lariel period trends in earnings for nonwhites and or over the longer run. Hispanics differ somewhat between Miami Table 3 does indicate a decline in Cuban and tlie comparison cities. Black wages in wage rates relarive to the wage rates of Miami were roughly constant from 1979 other groups in Miami. Relative to the to 198 1, fell in 1982 and 1983, arid rose to wages of whites, for example, Cuban their previous level in 1984. Black earn- wages fell by 6-7 percentage points be- ings in the comparison cities, on the other t.wTeen 1979 and 1981. Assu~nirigthat the hand, show a steady downward trend wages of earlier Cubarl immigr;ints were between 1979 and 1985. These data constant, this dec.line is consistent with the provide no evidence of a negative inrpact addicion of 45,000 Mariel workers to the of the Mariel immigration on black wages pool of Cubans in the Miami labor force, in Miami. The data do suggest a relative and with the 34% wage differential be- downturn in black wages in Miami during tween Mariels arid ot,he~.(;uha~as noted ir~ 1982-83. It seems likely, however, that l'able 3. A more thorough ana!ysis of this downturn reflects an unusually severe Cuban wages is presented in Table 7, cyclical effect associated with the 1982-83 below. recession. (I return to this issue in Table 6, Thc unemployment rates in T;~bie3 helow.) lead to he same general conclusions '1s the Wage rates for non-Cuban Hispanics in wage data in Table 3. There is no e~.icir.nce Miami were fairly stable between 1979 and that the hlaricl influx adversely affecterl 1085, with only a slight dip in 1983. In the unemployment rate of either :v'rlites or contrast, Hispanic wage rates in the blacks. The unemployment rates ~11~5ICS~a coniparisori cities fell about 6 percentage severe cyclical downturn in the black lahor points over this period. Again, there is 120 rnarket in Miami in 1982-83. Black urlem- evidence of a negative effect in Miami, ployir!ent rates in Miami, which had been THE MARIEL BOATIAFT
Table 4. Unemployment Rates of Individuals Age 16-61 in Miami and Four Comparison Cities, 1979-85. (Standard Errors in Parentheses)
Blacks 8.3 5.6 9.6 16.0 18.4 14.2 7.8 (1.7) (1.3) (1.8) (2.3) (2.5) (2.3) (2.3) Cubans 5.3 7.2 10.1 10.8 13.1 7.7 5.5 (1.2) (1.3) (1.5) (1.5) (1.ti) (1.4) (1.7) Hispanics 6.3 7.7 11.8 9.1 7.5 12.1 3.7 (2.3) (2.2) (3.0) (2.5) (2.1) (2.4) (1.9)
Whites
Blacks
Hispanics 6.3 8.7 8.3 12.1 11.8 9.8 9.3 (0.6) (0.6) (0.6) ('3.7) (0.7) ('3.6) (0.8) 'Vote: Entries represent means of unemploylnent indicator variable for individuals age 16-61 in Miami and four comparison cities: Atlanta, Houston, Los Angeles, and Tampa-St. Petersburg. Samples are based on individuals in the labor force. See notes to Table 3 for definitions of groups and data sources.
2-4 points lower than those in the unemployment rates in Tables 3 and 4, comparison cities from 1979 to 1981, which combine workers of all ages and equalled or exceeded those in the compar- education levels. do not directlv address ison cities from 1982 to 1984. The 1985 the question of whether the ~aiielimmi- data indicate a return to the pre-1982 gration reduced the earnings of less- pattern, although the sampling errors are skilled natives in Miami. A more direct large enough to prevent precise infer- answer is provided by the data in Table 5. ences. In order to identify "less-skilled" workers, Unlike the situation for whites and I fit a linear regression equation for the blacks, there was a sizable increase in logarithm of hourly earnings to workers in Cuban unernployinent rates in Miami the comparison cities. The explanatory following the Mariel immigration. Cuban variables in this regression included edu- unemployment rates were roughly 3 per- cation, potential experience, squared po- centage points higher during 1980-81 tential experience, indicator variables for than would have been expected on the each gender and race group, and interac- basis of earlier (and later) patterns. Assum- tions of the gender-race indicators with ing that the unemployment rates of earlier potential experience and squared poten-
Cuban immigrants were unaffected by the tial ex~erience.I 1 then used the estimated Marie1 influx, this effect is consistent with coefficients from this equation to form a unemployment rates of around 20% predicted wage for each non-Cuban worker among the Mariels themselves. Although in Miami. and sorted the sam~leI from far from conclusive, this simple calculation each year into quartiles on the basis of suggests that the increase in Cuban unem- predicted wage rates. ployment rates could easily be explained This procedure provides a simple way as a result of the addition of the Marie1 to identify more- and less-skilled workers refugees to the C,uban population, with in the Miami labor market. Means of little or no effect on earlier immigrants. actual log wages for each quartile and year The simple averages of wages and are presented in the first four columns of INDUSTRIAL AND LABOR RELATIONS REVIEW
Table 5. Means of Log Wages of Non-Cubans in Miami by Quartile of Predicted Wages, 1979-85. (Standard Errors in Parentheses) hlean of Log Wage b\ Quart~leof Pred~ctedWage Dzffere~iceof Year 1st Quart. 2nd Qnrt. 3rd Quort. 4th Quart. ,~fe&s: 4th -"lst 1979 1.31 1.61 1.71 2.15 .84 (.03) (.03) (.03) (.04) (.05) 1980 1.31 1.52 1.74 2.09 .77 (.03) (.03) (.03) (.04) (.05) 1981 1.40 1.57 1.79 2.06 .66 (.03) (.03) (.03) (.04) (.05) 1982 1.24 1.57 1.77 2.04 .80 (.03) (.03) (.03) (.04) (.05) 1983 1.27 1.53 1.76 2.11 .84 (.03) (.04) (.03) (.05) (.06) 1984 1.33 1.59 1.80 2.12 .79 (.03) (.04) (.04) (.04) (.05) 1985 1.27 1.55 1.81 2.14 .87 (.04) (.04) (.04) (.05) (.06) AJote: Predicted wage is based on a linear prediction equation for the log wage fitted to individuals in fo~u. comparison cities; see text. The sample consists of non-Cubans (male and female, white, black, and Hispanic) between the ages of 16 and 61 with valid wage data in the earnings supplement of the C~urentPopulation Survey. Wages are deflated by the Consumer Price Index (1980= 100).
Table 5. The difference in mean wages the less-skilled segmentU of the black between the first and fourth quartiles, population. For both groups I calculated which provides an index of the spread in the differential in wages between Miami the wage distribution, is presented in the and the com~arisoncities (both the unad- fifth column of the table. justed difference in mean log ways and a If the Marie1 immigration reduced the regression-adjusted differential that con- wages of less-skilled natives, one would trols for education, gender, marital status, expect to observe a decline in the wage of part-time status, privatelpublic employ- workers in the lowest skill quartile, at least ment, and potential experience) and the relative to workers in the upper quartile. differentials in the employment-popula-
The actual averages show no evidence of tion rate and the unem~lovment1 , rate this effect. Apart from the temporary between Miami and the comparison cities. increase in relative wages of workers in the As indicated in Table 3, the wage lowest quartile between 1979 and 1981, differential for blacks in Miami relative to the distribution of non-Cubans' wages in those in the comparison cities decreased the Miami labor market was remarkably slightly between 1979 and 1981. The stable between 1979 and 1985. Taken differential increased substantiallv in 1982. together with the data in Table 3, these but then began a steady downdrd trend data provide little evidence of a negative after 1983. By 1985, the wage gap was less effect of the Marie1 influx on the earnings than 3% for all black workers. and was of natives. actually positive for less-educatkd blacks. A final check is provided in Table 6, The magnitudes of the regression- which contains more detailed information adjusted wage differentials are not signifi- on wages, employment rates, and unem- cantly different from the unadjusted wage ployment rates for blacks in Miami be- differentials, and show no evidence of any tween 1979 and 1985. I separately ana- effect of the Marie1 immigration on black lyzed the set of all blacks and the set of wages. blacks with less than 12 years of education A similar conclusion emerges from the in order to isolate any stronger effect on pattern of differentials in employment- THE MAKIEL BOATLIFT 253
Table 6. Comparison of Wages, Unemployment Rates, and Employment Rates for Blacks in Miami and Comparison Cities. (Standard Errors in Parentheses) All Bncks Low-Educnt2otz Blacks
Dfferetzce ztz Dfference 112 Dfference 111 Emp IC'tzemp , Dfference in Entp Il'nemp , Log I.17nges, ~bfznm~- Compar~sotz Log IVnges, lV11nm~- Compnrlson 1bf2amz - Co?r~par~son K- 1V11nmz - Compa~~son E~~ - Year Actual Adizlited PoB. Rnte C'tzemB Rnte Actztnl Adrwtcd PoB Rnte C'nen~b Rnte
1979 -.I5 -.I2 .OO - 2.0 -.I3 -.I5 .03 - .8 i.03) i.03) (.03) (1.9) i.05) (.05) (.04) (3.8) 1980 -.1G -.I2 .05 -7.1 - .07 - .07 .03 - 8.2 i.03) (.03) i.03) (1.6) i.05) i.05) i.04) (3.5) 1981 -.I1 -.lo .02 - 3.0 - .05 -.I1 .04 - 7.7 i.03) i.03) i.03) (2.0) i.05) (.05) i.04) (4.2) 1982 -.24 - .20 - ,015 3.3 -.I7 - .20 - .04 .6 ,i.O3) i.03) i.03) (2.4) i.05) (.05) i.04) (4.7) 1983 -.21 -.l5 - .02 1 -.I3 -.I1 .04 - 3.3 i.03) (.03) i.03) (2.7) i.06) i.05) i.04) (4.7) 1984 -.lo - .05 - .04 2.1 - .04 - .03 .05 1 (.03) (.03) i.03) (2.4) i.06) i.05) (.04) (4.7) 1985 -.05 -.01 - .06 - 5.5 .18 .09 .OO -4.7 (.04) i.04) i.04) (2.6) i.07) ~07) i.06) (5.6) Notes: Low-education blacks are those with less than 12 years of completed education. Adjusted differences in log \\.ages between blacks in Xliami and cotnparison cities are obtained from a linear regression model that includes education, potential experience, and other control variables; see text. Wages are deflated by the Consumer Price Index (1980= 100). "E1np.-Pop. Rate" refers to the employ~nent:populationratio. "Lnemp. Rate" refers to the unemployment rate among those in the labor force. population ratios and unemployment rates.Y ble 4, the series of unemployment rate dif- Among all blacks, there is some evidence ferentials indicates a sharp downturn in la- of a relative decline in the employment- bor market opportunities for blacks in 1982. to-population ratio in Miami between 1979 Given the lag between the arrival of the and 1983.1° This effect seems to have Mariels and the emergence of this unem- started in 1982, and is less pronounced ployment gap, however, the gap seems among low-education blacks than among more likely to have resulted from the 1982 those with more education. As noted in Ta- recession than from the influx of less- skilled immigrants.
g I also computed regression-adjusted employment- The effects of the Marie1 immigration population and une~nployment gaps using simple on Cuban labor market outcomes are linear probability ~nodels.The explanatory power of examined in detail in Table 7. The first the statistical rnodels is so low, however, that the adjusted differentials are allnost identical to the column of the table reproduces the means unadjusted differentials. of log wages in each year from the third ''Although they are not reported in Table 6, I row of Table 3. The second column gives have also constructed differentials in the labor force predicted log wages of Cubans in Miami, participation rate between hliami and the compari- using estimated coefficients from a regres- son cities. For blacks as a whole these show a decline in relative participation rates in Xlianii starting in sion equation fit to Hispanics in the four 1982, altho~~ghthe decline is only temporary for the comparison cities. The gap between actual low-education group. The differential in labor force and predicted wages is presented in the participation rates is approxi~nately equal to the third column of the table. These series differential in the e~nployment-pop~~latiollrate plus show that the 9 percentage point decline the differential in the iunemplo~lnentrate multiplied by the average labor for.ce participation rate (.'ifor in Cuban real wage rates in Miami the overall group, .55 for the low-education group). between 1979 and 1985 was a result of two INDUSTRIAL AND LABOR RELATIONS REVIEW
Table 7. Means of Log Wages of Cubans in Miami: Actual and Predicted, and by Quartile of Predicted Wages. (Standard Errors iri Parentheses) ~tleanof Log llinges Log in ,Vfzan~z ~Vfeanof Log I.t7ages by Quartzle ilctual- ,tlean Log Wage AVfzatnl - Rest-of L' S. of Predicted IIJages Pre- Pte- of Cztbatis Ad- Year Actual dzcted dzcted 1st 2nd 3rd 4th Outszde 1\Iz 1985 1.49 1.67 -.I8 1.19 1.43 1.53 1.80 1.77 - .27 -.19 (.04) (.03) (.05) (.06) (.06) (.08) (.OU) (.06) (.07) (.05) "Votes: Predicted wage is based on a linear prediction equation for the log wage fitted to individuals in four comparison cities; see text. Predicted wages for Cubans in Sfiami are based on coefficients for Hispanics in comparison cities. The adjusted wage gap between Cubans in Miami and Cubans in the rest of the U.S. are obtained from a linear regression model that includes education, potential experience, and other control variables; see text. Wages are deflated by the Consumer Price Index (1980= 100). complementary factors: a 670 relative 1984 and 1985, and in light of the decline in the "quality" of the Cuban labor sampling errors it is difficult to draw force in Miami, as measured by the decline precise inferences. The difference be- in their predicted wages, and a 3 percent- tween the means of the first and fourth age point increase in the quality-adjusted quartiles is 9 percentage points higher in wage gap between Cuban workers in 1984 than 1979, but the gap narrows to Miami and Hispanic workers in the com- only 2 points in 1985. These figures are parison cities. Two-thirds of the wage consistent with a larger decline in earnings decline is therefore attributed to the at the low end of the Cuban wage changing productivity characteristics of distribution after the Marie1 immigration, the Cuban labor force, and one-third to a as might be expected from the addition of decrease in the return to skills for Cubans a large group of relatively unskilled in the Miami labor market. workers to the 1~ool of Cubans. The extent The next four columns of Table 7 give of the decline, however, is not precisely the means of log wages for Cuban workers measured. in each auartile of the distribution of An alternative method to assess the predicted wages (using the same predic- effect of the Marie1 immigration on the tion equation as was used to form the earnings of Cubans in the Miami labor means in column 2). These means suggest market is to compare Cuban wages in that real wage rates of Cubans in the Miami to the wages of Cubans elsewhere lowest quartile of the wage distribution in the United States. Since the fraction of declined by 11-12 percentage points be- Mariels in the Cuban labor force is tween 1979 and 1985. The decline is roughly the same inside and outside smaller for workers in the higher quar- Miami, this comparison controls for any tiles, but there is some variation between unobservable differences in skill between THE MrZRIEI, BOATLIF'T 255 the Mariels and other Cubans (due to about one-third less than other compara- language ability, for example).ll The ble Cubans (as the March 1985 data ninth arid t.enth columnls of 'Table 7 suggest). This conclusion is confirmed by contain estiiuates of the wage differential a comparisoi~of Cuhan wage rates inside for Cubans in Nianli reiat.ive to those and outside Miami, which shows no elsewhere in the coilntry, both unadjusted relative change oIrer the period. and adjusted for educatiori, gender, These conclusions lead naturally to the part-time status, private sectoripublic question of how the Miami labor n~arket sector emplnyment, marital status (inter- was able to absorb a 7% increase in the acted with gender], and potential experi- labor force with 110 aciverse ef'fects. One ence. possible answer is that the Mariels dis- 'i'he earnings differentials conlputed in placed other immigrants and natives who this way ai-e roughly constant between would have moved to Mianrii in the early 1079 ar-td 1984. The 1982 unadjusted 1980s had the Boatlift not occurred. Some wage differential is 10 percentage points evidence on this hypothesis is provided by larger than earlier or later ones, but the comparing populatior: growth rates in regressic-jn-adjusted differential is not sig- Mianli to those in other Florida cities. nificantly differe~rtfrom any of t.he other From 1970 to 1980, the hfiarni population differentials. The 1983 data also indicate a grew at an annual rate of 2.5% per ),car slightly higher Cuban wage rate outside while the population sf the rest of' Florida Miarni. In any case, 3 compariso~l of grew at a rate of :4.9%.After April 1, Cuban wages inside and outside the Miami 1980, the growth rate h~Miarni slo\ved to labor market shouis no evidence of' a 1.4% per year while that in the rest of the widening gap in the years imnlediately state deci.easecl to 3.4%-." The greater follotuing the Mariel immigration. On the slowdo~vn in Miami suggests that the assumption that the Marie1 influx had no Boatlift may have act~ially held back effect on the wage rntes of other Cubans long-run pogulatio~lgrowth in h4iami. in OU~CZ~PMianli, this fitading suggesis that. fact, the population of Dade county ill the observed don~ntnrnin Cuban Fvages in 1986 was about. equal to the pre-noatlifi Miami can be attributed solely to the projection of the University of Florida "dilution" of the C:tiban iabor force with Bureau of Economic and Business Re- less-skilled Mariel workers. search ~indertheir "low population growth" scenario (see Florida Stnll~t~cal~hstl-nci 1981 , Table 1.24). Interpretation of the Findings Nevertheless, data from the March 1985 The data in Table 3--7 point to two Current I'op~~la!.ionSurvey suggest that conc,i~isi~ns.First, the hrariel inlmiglation Miami contit~iiedeo atti.act new foreign- iiad essc:ntialiy no effect on the wages or born immigrants after 1980. A total of employment outcomes of non-Cuban ivork- 2.7% of all non-Cuban immigrants ~vho ers in th~Miarni labor market. Second, arrived in the United States after Marcli and perhaps even more surprising, the 1980 were living in Miami in March 1985. Mariel irrrmigr;~tionhad 110 strong effect At the tirne of the 1980 Census, however, on the wages of' other Cubans. The only 1.8% of all non-Cuban in:migrants in observed decline in average Cuban wage the L~liteclStates lived in Miami. Thus, rates iu 3liami after 1980 is no larger than Miami attracted "mcre than its share" of rvorild be expected by simply adding the new no~i-Cubanimmigrants to the country hlariei in~~riigralltsto the pool of Cuban in the five-year period after the Marie1 workers, assunling that the Mariels earned immigration. The implication is that the slowdo~vn in the rate of grorvth of the 1 I T!iis propo5iiiori i5 s:r.ictl) trllc onls if t11r ~i~~oh\er-vablec!ii'ferences have a ionstant propot.- I? -rllesr figures are ohrailled fro111 U.S. Depal-L- tional rffect on all ll;lriels, ii-itiependerit c~trhr !cvpl rlicnt of Colnrnel.cc (1971,Table YZ ai~d1988, Table of oLer\rd skills or locatio~~choice. 1). 256 INDUSTRIAL AND LABOR RELATIONS REVIEW Miami SMSA after June 1980 occurred were Cubans. Although employment in because of a change in the net migration immigrant-intensive industries did not rate of natives and older cohorts of expand after the Boatlift, and the Cuban immigrants, rather than because of a share of employment in these industries change in the inflow rate of new immi- was relatively stable, the Mariels may have grants. This finding is consistent with the simply replaced earlier cohorts of Cuban pattern of domestic migration between immigrants as the latter moved to more 1970 and 1980 identified by Filer (1988), desirable jobs. who found a strong negative correlation across SMSAs between the net in- Conclusions migration rate of natives and the in- migration rate of immigrants. The experiences of the Miami labor A second explanation for the rapid market in the aftermath of the Marie1 absorption of the Marie1 immigrants is the Boatlift provide a natural experiment with growth of industries that utilize relatively which to evaluate the effect of unskilled unskilled labor. Altonji and Card's (1989) immigration on the labor market opportu- tabulations from the 1970 and 1980 nities of native workers. The Mariel Censuses indicate that a small set of immigrants increased the labor force of industries employ a large fraction of the Miami metropolitan area by 7%. immigrants, and that these industries Because most of these immigrants were expanded more rapidly bet~veen1970 and relatively unskilled, the proportional in- 1980 in cities with large immigrant popu- crease in labor supply to less-skilled lations than in other cities. The immigrant-U occupations and industries was much intensive industries identified in their greater. analysis are apparel and textiles, agricul- Yet, this study shows that the influx of ture, furniture, private household ser- Mariel immigrants had virtually no effect vices, hotels and motels, eating and drink- on the wage rates of less-skilled non- ing establishments, and business services. Cuban workers. Similarly, there is no These are relatively low-wage industries evidence of an increase in unemployment that employ large numbers of semi-skilled among less-skilled blacks or ocher non- operatives and laborers. Cuban workers. Rather, the data analysis A comparison of the industry distribu- suggests a remarkably rapid absorptioil of tions of employment in Miami and the the Mariel immigrants into the Miami entire count1 y before and aftei the Mariel labor force, with negligible effects on Boatlift shows little change in the relative other groups. Even among the Cuban importance of immigrant-intensive indus- population there is no iildicatioll that tries in Miami.]? Nevertheless, these tabu- wages or uilemployrnent rates of earlie1 lations suggest that the industry distribu- immigrants were substailtially affected by tion in Miami in the late 1970s was well the arrival of the Mariels. suited to handle an influx of unskilled Despite the clear-cut nature of these immigrants. Textile and apparel indus- findings, some cautioil is required in their tries were particularly prominent in Mi- intermetation. since the Miami labor mar- ami, with 5.5% of total employment in ket is' far from typical of other local labor these industries as compared to only 2.35% markets in the United States. Although nationwide. Sebenty-five percent of work- the arrival of some 60,000 refugees in only ers in textiles and apparel and 45% of a six-month period occasioned probleixis workers in other manufacturing industries for the Mariel immigrants, in many re- spects Miami was better prepared to receive them than any other city. In the '"hese tabulations are repol.ted in Card (1989, two decades before the Mariel Boatlift Table 9). Pre-Boatlift data are based on the 1979 and 1980 March Current Population Surveys. Post- Miami had absorbed a continuing.u flow of Boatlift data are basec! on the hIarch 1984 and Cubans, and in the years since the Boatlift March 1985 CPS. it has continued to receive large numbers THE MARIEL BOATLIFT 257 of Nicaraguans and other Central Ameri- immigrants moved to better ones. Second, cans. Thus, the Marie1 immigration can be because of the high concentration of seen as part of a long-run pattern that Hispanics in Miami, the lack of English- distinguishes Miami from most other speaking ability among the Mariels may American cities. have had smaller effects than could be Two factors that may have been espe- expected for other immigrants in other cially important in facilitating the absorp- cities. tion of the Marie1 immigrants are related A final factor in the Marie1 immigration to the distinctive character of the Miami is the response of domestic migration. A labor market. First, Miami's industry struc- comparison of Miami growth rates to ture was well suited to make use of an those in the rest of Florida suggests that influx of unskilled labor. This structure, the net migration rate of natives and and particularly the high concentration of earlier immigrants into the Miami area textile and apparel industries, evolved slowed considerably after the Boatlift. To over the previous two decades in response some extent the Mariels may have dis- to earlier waves of immigrants, and may placed other migrants from within the have allowed the Marie1 immigrants to United States who could have been ex- take up unskilled jobs as earlier Cuban pected to move to Miami. REFERENCES Altonji, Joseph, and David Card. 1989. "The Effects Econotnics nnd Stntistio, Voi. 64 (November). pp. of Immigration on the Labor Market Outcomes of 596-60s. Natives." Princeton University Industrial Relations Lalonde, Robert, and Robert Topel. 1987. "Labor Section Working Paper N~unber256, August. Market Adjustments to Increased Immigration." Borjas, George. 1987. "Immigrants, Minorities, and Unpublished manuscript, University of Chicago Labor Market Competition." Itzdustrial nrid Lnbor Graduate School of Business, September. Relotion;\ Review, Vol. 40 (April), pp. 382-92. Masud-Piloto, Felix Roberto. 1988. With Open Arrw: Bound, John, and George Johnson. 1989. "Changes Cuban ~Migratiorito the 17tzited States. Totowa, N.J.: in the Structure of Wages During the 1980's: An Rowman & Littlefield. United States Department of Commerce, Bureau of Evaluation of Alternative Explanations." National the Census. 1971. 1970 Cetiszc~ of Populntion- Bureau of Economic Research Working Paper Nictilber of Itzhnbitntzt;\: I'tilted Stntn Sz~nz~nnt?(PCl- Number 2983, May. Al). Washington, D.C.: GPO. Btuiriess Week. 1980. "The New Wave of Cubans Is . 1983. 2 980 Census of Poplclation -Cliaracteris- Swamping Miami." 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