Foreign Flows

Kevin Lewis

November 19, 2025

Red and Blue Immigrants: Political (Mis)Alignment, Immigration Attitudes, and the Boundaries of American National Inclusion
Keitaro Okura
American Journal of Sociology, forthcoming

Abstract:
Conventional theories of attitudes toward immigrants emphasize either conflict between civic and ethnocultural conceptions of national identity or a consensus favoring highly skilled, culturally assimilable immigrants. This article advances an alternative paradigm: natives’ immigration attitudes are contingent on their perceived (mis)alignment with newcomers’ politics. Drawing on descriptive and experimental studies across two surveys, I first document that Americans view immigrants as future Democrats who are culturally right-wing and economically left-wing. I then demonstrate that Americans’ receptiveness to immigrants, as well as judgments about their legal status and deservingness are highly sensitive to whether newcomers are potential partisan allies or adversaries. Notably, the influence of perceived political(mis)alignment eclipses classic predictors of immigration attitudes. Contemporary debates over immigration further underscore the salience and potency of these political motivations. These findings offer a novel lens for understanding the modern foundations of immigration attitudes and the boundaries of national membership.

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Local Labor Market Effects of the 2002 Bush Steel Tariffs
James Lake & Ding Liu
American Economic Journal: Economic Policy, November 2025, Pages 292-330

Abstract:
President George W. Bush imposed safeguard tariffs on steel in early 2002. Using US input-output tables and a generalized difference-in-difference methodology, we analyze the local labor market employment effects of these tariffs depending on the local labor market's reliance on steel as an input and as part of local production. The tariffs did not boost local steel employment but substantially depressed local employment in steel-consuming industries for many years after Bush removed them. The tariffs also led to a persistent exit of steel-intensive manufacturing establishments, suggesting a role for plant-level fixed entry costs in translating the temporary shock into persistent outcomes.

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Industrial Policy, Asian Miracle Style
Reda Cherif & Fuad Hasanov
Journal of Economic Perspectives, Fall 2025, Pages 101-126

Abstract:
We decipher the riddle of the meteoric rise of the Asian Miracles -- Korea, Taiwan, Singapore and Hong Kong, and Japan before them -- in the second half of the twentieth century. We argue that the secret of their success lies in the specific type of industrial policy focused on technology and innovation. This overarching policy focused on exports of sophisticated products by domestic firms while fostering fierce domestic competition and accountability for the support received. The successful implementation of this policy depended on a particular type of institutions -- a leading agency with a distinct institutional design and a mandate to develop sophisticated industries. The experience of the Asian miracles provides a blueprint for developing economies to achieve rapid convergence with advanced economies. It also suggests a reassessment of the roles of the state and the market, the appropriate tools of industrial policy, and the meaning of "good" institutions.

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Machines could not compete with Chinese labor: Evidence from US firms’ innovation
Jan Bena & Elena Simintzi
Review of Finance, November 2025, Pages 1619-1661

Abstract:
We study how multinational firms’ access to offshore labor affects their decisions to develop new production technologies. The 1999 US–China bilateral agreement improved contracting institutions in China, reducing uncertainty for US multinationals and enabling cheaper labor sourcing through foreign direct investment. Using data from US parent companies and their Chinese subsidiaries, we show that US firms expanded their Chinese operations and increased subsidiaries’ profitability post-agreement. Our novel measure reveals that US multinationals reduced process innovations after the agreement. These findings highlight the impact of cross-border labor sourcing on domestic technological development, highlighting that production and technological choices of multinationals are jointly determined.

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The Geopolitical Determinants of Economic Growth, 1960–2019
Tianyu Fan
Yale Working Paper, November 2025

Abstract:
This paper establishes geopolitical relations as a first-order determinant of economic growth. We construct a novel event-based measure of bilateral geopolitical alignment by employing large language models with web search capabilities to analyze over 440,000 political events across 196 countries from 1960 to 2019. This comprehensive measure enables us to identify the precise timing and magnitude of geopolitical shifts. Exploiting within-country temporal variation, we find that a one-standard-deviation improvement in geopolitical relations increases GDP per capita by 10 percent over 15 years. These persistent effects operate through multiple reinforcing channels: enhanced political stability, increased investment, expanded trade, and productivity gains. Geopolitical factors account for GDP variations ranging from -35 to +30 percent across countries over our sample period, with developing nations exhibiting particularly severe penalties from international isolation.

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Does U.S. Immigration Policy Facilitate Financial Misconduct?
Ruiting Dai et al.
Journal of Accounting Research, December 2025, Pages 2039-2081

Abstract:
We examine whether U.S. immigration policy, specifically the H-1B visa program, affects the likelihood of financial misconduct. We argue that employers have leverage over employees on H-1B visas because such employees must maintain H-1B–eligible employment to legally reside in the United States. We posit that companies relying on H-1B visas to hire workers in accounting roles have an increased ability to misreport their financial statements due to the greater costs H-1B employees face if they are unexpectedly fired for not following the demands of their bosses or for blowing the whistle on misconduct. Using the sharp reduction in the H-1B visa cap in 2004 as a shock to such employment, we find that companies that relied on this visa program for accounting roles pre-shock experience a 2.3 percentage point decline in accounting irregularities post-shock. Cross-sectional tests show that the reduction in irregularities is greater in companies where H-1B employees have (1) a greater influence on financial reporting or (2) fewer job opportunities. In addition, the relation between H-1B visa use and irregularities is stronger in companies whose investors are more focused on near-term earnings targets. We corroborate our findings using the outcome of H-1B visa lotteries as shocks to such employment.

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Economic Inequality and Convergence Through the Lens of Two Sports
Daryna Grechyna & Viktor Grechyn
Journal of Sports Economics, December 2025, Pages 994-1017

Abstract:
This paper analyzes the inequalities and convergence across countries using data on the top 100 players in chess and tennis. We explore the impact of time trends and exogenous global shocks on countries’ representation in the top 100 players’ lists in a manner akin to a natural experiment, comparing chess and tennis while distinguishing among different country income groups. The results indicate the presence of conditional convergence across countries in their representations in the top 100 chess players, but not in the top 100 tennis players. The availability of internet contributed to the reduction of inequalities in chess, a mind-dominated sport, but not in tennis, a wealth-dominated sport. Negative economic shocks, such as the Great Recession and the Covid pandemic, exacerbated the inequalities in tennis, but not in chess.

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How Migrating Overseas Shapes Political Preferences: Evidence from a Field Experiment
Nikhar Gaikwad, Kolby Hanson & Aliz Tóth
International Organization, forthcoming

Abstract:
Scholarship on cross-border migration and welfare state politics has focused on native-born individuals’ attitudes. How does migration affect the redistribution preferences of migrants -- key constituents in host and home countries? We argue that migration causes migrants to adopt more fiscally conservative attitudes, driven not only by economic gains but also by psychological shifts toward self-reliance and beliefs in the prospect of upward mobility. We present results from a randomized controlled trial that facilitated labor migration from India to the Middle East. The intervention prompted high rates of cross-border migration and significantly reduced support for taxation and redistribution among migrants. By contrast, left-behind family members did not become more fiscally conservative despite also experiencing economic gains. While the migrants became economically confident and self-reliant, their family members grew increasingly dependent on remittances. Our results demonstrate that globalization’s impacts on welfare-state preferences depend on the pathways by which it generates economic opportunity.

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The Economic Impact of Brexit
Nicholas Bloom et al.
NBER Working Paper, November 2025

Abstract:
This paper examines the impact of the UK's decision to leave the European Union (Brexit) in 2016. Using almost a decade of data since the referendum, we combine simulations based on macro data with estimates derived from micro data collected through our Decision Maker Panel survey. These estimates suggest that by 2025, Brexit had reduced UK GDP by 6% to 8%, with the impact accumulating gradually over time. We estimate that investment was reduced by between 12% and 18%, employment by 3% to 4% and productivity by 3% to 4%. These large negative impacts reflect a combination of elevated uncertainty, reduced demand, diverted management time, and increased misallocation of resources from a protracted Brexit process. Comparing these with contemporary forecasts -- providing a rare macro example to complement the burgeoning micro-literature of social science predictions -- shows that these forecasts were accurate over a 5-year horizon, but they underestimated the impact over a decade.

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The toll of tariffs: The impact of protectionism on education and fertility in late 19th century France
Vincent Bignon & Cecilia García-Peñalosa
Journal of Economic Growth, December 2025, Pages 461-495

Abstract:
This paper asks whether macroeconomic policy can affect fertility and education by documenting a slow-down of long-term improvements in these two outcomes in the wake of a major protectionist shock that shielded low-skilled individuals from the adverse consequences of the first wave of globalisation. We build a novel dataset for 19th-century France where, following decades of rising grain imports at low prices, high tariffs on cereal were introduced in 1892, shifting relative prices in favour of agriculture and away from industry. We exploit regional data that allow us to measure differences in the intensity of the protectionist shock and find that the tariff halted the long-term increase in schooling and slowed-down the decline in fertility that were already well underway.