The Labor Market Effects of a Refugee Wave: Synthetic Control Method Meets the Mariel Boatlift

Giovanni Peri and Vasil Yasenov

Journal of Human Resources, Volume 54, Issue 2, Spring 2019, Pages 267-309


This article reexamines the labor market effects of the migration of almost 125,000 Cuban refugees to the United States between April and September 1980, known as the Mariel Boatlift. The Mariel Boatlift has been the subject of several economic studies because it provides a natural experiment to test theories about the effects immigration on the wages and employment of native workers. The majority of the Mariel Cubans settled in Miami, increasing Miami’s labor force by about 8 percent, and increasing the workforce without a high school degree by around 18 percent. Card’s (1990) seminal paper found no evidence of any effect on the wages or employment of low-skilled non-Cubans in Miami, while Borjas (2017) found that the wages of low-skilled workers fell by 10 to 30 percent. The authors of this paper argue that they improve on previous studies by employing a synthetic control method, which involves identifying an ‘optimal’ control group or ‘synthetic’ city, that best matches Miami’s labor market trends pre-Boatlift. The authors look for a significant difference in Miami’s labor markets’ outcomes from those of its synthetic control between 1981 and 1983, as potential evidence of an effect of the Mariel Boatlift on local labor markets.

Key findings:

  • There is no significant difference in the labor market outcomes of high school dropouts between Miami and its synthetic control, confirming the results of Card (1990). Neither wages nor unemployment rates of high school dropouts differ significantly between Miami and its control group during the 1981–1983 period.
  • There is no consistent evidence of large negative effects such as those presented in Borjas (2017). By focusing on small subsamples and matching the control group on a short pre-1979 series, as done in Borjas (2017), it is possible to find large wage differences between Miami and the control because of large measurement error.

The authors conclude that the lack of a significant wage effect is consistent with the recent literature emphasizing mechanisms that allow absorption of immigrants through complementarity, technology adjustment, increases in demand, and efficiency.