Primary Resources, Secondary Labor: Natural Resources and Immigration Policy

Abstract

This article argues that substantial natural resource wealth leads to more restrictive low-skill immigration policy in advanced democracies. High-value natural resource production often crowds out labor-intensive firms that produce tradable goods. When these proimmigration business interests disappear due to deindustrialization, also known as the Dutch Disease, the proimmigration coalition weakens in domestic politics. Without strong business pressure for increased immigration, policy-makers close their doors to immigrants to accommodate anti-immigrant interests. Using a newly expanded dataset on immigration policy across twenty-four wealthy democracies, I find that oil-rich democracies are more likely to restrict low-skill immigration, especially when their economies are exposed to foreign competition in international trade. The results supplement the voter-based theories of immigration policy and contribute to an emerging literature on the political economy of natural resources and international migration.