The Effects of Immigration on the U . S . Economy
to rectify this and a weight was added to each observation . Table 3 in Appendix A shows results with standardized coefficients .
The coefficients are standardized for the independent variables to compare the effects they have on the dependent variables . This is important because the independent variables have different measurements and it is difficult to see the impact without standardizing the coefficients . For GDP growth rate , we can see that the lawful permanent resident population has the biggest impact on GDP growth rate . One standard deviation change in the lawful permanent resident population results in beta value 2.11 standard deviations change in GDP growth rate . For the unemployment rate , we can see that the logged variable of the lawful permanent resident population has the biggest impact on unemployment rate . One standard deviation change in logged the lawful permanent resident population results in beta value 7.86 standard deviations change in unemployment rate . For CPI , we can see that the median family income has the biggest impact on CPI . One standard deviation change in median family income results in beta value 0.98 standard deviations change in CPI . For the urban index , we can see that median family income also has the biggest impact on the dependent variable urban index . One standard deviation change in median family income results in beta value 1.25 standard deviations change in urban index .
Overall , the number of lawful permanent residents , FDI , and median family income has an impact on the dependent variables . This is important because it validates our assumption that immigration has an impact on the U . S . economy . However , because there is endogeneity between economic growth and immigration , we must consider this and correct for it .
Vector autoregressive model . The data are at the national level in scope and on a timeline from 1961 to 2016 across the United States . With time series data , four different models were created ( see Appendix A , Model Specification for Vector Autoregressive Model ). Again , the search is to identify the effects of immigration on the U . S . economy . However , due to time lags , we do not want to ignore values affected by those same values in the past . This is a problem of autocorrelation , which we test for . Due to autocorrelation , we must difference the variables to produce a stationary process . Once the variables were stationary , we ran the Dickey-Fuller Test for stationary . This process was repeated for the four models until every model was stationary .
The results for the effect of immigration on the U . S . economy can be seen in Figure 1 . In Figure 1 , the first highlighted graph shows us that at five periods , FDI begins to impact GDP ; there is a slight decrease at 9.5 periods . The second highlighted graph shows that at two periods , FDI causes an increase in the top marginal tax rate , followed by some periods of fluctuation , and finally a bigger increase at nine periods . The third highlighted graph shows that at two periods , FDI causes a decrease in the poverty rate , followed
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