In Conversation: Leah Boustan, Douglas Irwin, & Amit Khandelwal on trade and migration, past and present

Trade and migration have long shaped economic growth and productivity. Yet trade and immigration policies have shifted dramatically over time, reflecting changing economic conditions, political pressures, and geopolitical concerns.

Ahead of delivering the 2026 Kuznets Lecture on March 26, Douglas Irwin – Professor of Economics at Dartmouth College and author of several acclaimed books on trade, most recently Free Trade Under Fire (2020) and Clashing over Commerce: A History of U.S. Trade Policy (2017) – joined Yale economists and EGC affiliates Amit Khandelwal, Professor of Global Affairs and Economics, and Leah Boustan, Professor of Economics and Director of the Program in Economic History, to discuss how their research in economic history, international trade, and labor economics can help explain these dynamics and shed light on today’s policy shifts.

To start, could each of you briefly describe the focus of your research?

Douglas Irwin: I try to understand how trade policies have evolved throughout history – why some countries adopt policies of protection and others move toward freer trade, and how these have gone back and forth over time and affected economic outcomes.

Amit Khandelwal: I study how trade policy affects companies in both developed and developing countries, focusing mainly on recent tariff policy changes over the past few decades. Compared to Doug’s work on policy change in its broad historical context, I often take a more granular look at data to understand the impacts.

Leah Boustan: Broadly my work is about the American Dream – the idea that you can move from anywhere to the U.S. and move up the ladder. Despite the nostalgic view that earlier immigrants moved up very quickly, we find a lot more similarity between past and present.

Doug, how has U.S. trade policy evolved over time, and what have been the key drivers?

Irwin: If we step back to the 19th century, the U.S. economy was quite open. Tariffs were relatively high, but markets were integrating through extensive trade in goods, the mass migration of workers, and increasing movements of capital across countries. In the early 20th century, particularly after World War I, we see greater restrictions on trade and labor. After World War II, the overall trend was to dismantle those restrictions and open back up. The shift in trade came faster than immigration: the foreign-born share of the U.S. population remained low as late as 1970, whereas trade really picked up steam after World War II and accelerated in the 1980s and 1990s. Now we're in a different era, shifting towards being more closed on both the trade and migration sides.

In terms of drivers, politics often plays a big role in these shifts, since politics determines policy. But there’s also an interaction between economic conditions and political responses.

Leah, what are some of the similarities and differences in the evolution of U.S. immigration policy?

Boustan: Until the 20th century, the U.S. was largely open to immigration. After banning Chinese and Japanese migrants in the late 19th century, the borders shut down substantially in the 1910s and 1920s, with broad national support and little partisan divide – unlike trade, where attitudes differed regionally between manufacturing and agricultural areas. The border reopened in 1965, but migration levels did not rise substantially until the 1990s.

Politics is the headline driver of immigration policy, but in ways that differ from trade. When workers move across borders they have cultural, fiscal, and political effects – from schools and public services to crime and voting patterns – that don’t apply when importing goods.

Amit, what have been the key factors shaping trade policy in more recent decades?

Khandelwal: In many countries, changes in trade and immigration policy are often more about the economic situation than politics. In India, the post-independence economy was built around protectionism and delivered very low rates of growth. In 1991, economic crisis led the government to sharply reduce tariffs, from about 100% to 30% over six or seven years. The balance between politics and the economics will vary across countries and moments in time. In the U.S., for example, there have been times where immigration had an economic rationale – my parents came in the early 1970s because the U.S. needed doctors. But in other moments, politics drives policy.

Doug and Leah, what does history tell us about the economic benefits and costs of trade and migration?

Irwin: Trade has always been important for the U.S. economy, but over time, a number of factors made it less central. We had access to British capital and technology from the start, so we were already at the technological frontier. By the 19th and 20th centuries, we were a continent-sized economy with a substantial capital stock – we had a diversified economy with productive agricultural, manufacturing, and service sectors and we were not very dependent on trade. Ironically, today’s integration with the world economy makes us more dependent on certain countries and regions for certain goods.  

Most other countries don't start with these kinds of advantages, and that's when trade and trade policy really become important. When you integrate, trade becomes important for your standard of living. It helps you gain access to capital, technology, and more competition, which drives productivity improvements.

Boustan: Earlier research largely focused on whether immigration reduced wages or employment for native-born workers, but the evidence has not consistently supported those concerns. In our work on U.S. immigration restrictions in the 1920s, for example, we find that where immigration fell, local wages did not rise; firms and regions adjusted through internal migration, new immigrant sources, and more capital-intensive agriculture.

More recently, research has shifted toward whether immigration contributes to productivity and growth – through the skills immigrants bring, population growth that supports innovation, and their concentration in economically dynamic cities.

Amit, what do recent global trends highlight about the effects of trade?

Khandelwal: In developing countries, one thing we’ve seen is that protection typically benefits a subset of the population, often the politically connected or wealthy. International trade can level the playing field, which helps deliver the kind of institutional change that supports growth.

In recent work on Myanmar, for example – one of the world’s most closed economies until the early 2010s – economic and political liberalization brought clear benefits, but also changes that are harder to measure. Young people saw that their future might be different, which changed their perspective on what skills to acquire and what sectors were booming. The process was cut short in 2021, but it shows how these kinds of changes can emerge quickly.

Leah, this idea of changing expectations and opportunities connects to your research on how quickly immigrants to the U.S. move up economically.

Boustan: There’s a perception that earlier immigrants moved up more quickly, but we find much more continuity. Comparing labor market outcomes from past and present, we find there’s never been a period where immigrants have caught up to the U.S.-born within a generation. But second-generation mobility today is very similar to that of European immigrants in the early 20th century – even for groups often seen as difficult to assimilate.

What has changed are the mechanisms. Historically, immigrants chose locations with the best opportunities, but geography matters less today. Census data show education as the main pathway for most groups, while children of Latin American immigrants more often move up through blue-collar careers.

Amit, what does your research suggest about the short- and long-run effects of trade policy shifts?

Khandelwal: Studies on tariffs often find surprisingly small short-run effects. After the US-China tariffs in 2018, for instance, we estimated losses of about 0.05% of GDP. Higher tariffs will initially raise prices, but most people in the U.S. are not going to suffer dramatically. Over time, however, high prices might lead to fewer types of imported goods, slower cross-border business, and less knowledge exchange. If your productivity growth falls from 2% to 1.9%, the immediate effect is small but you will start to see big differences as those losses compound over time. Brexit is a good example: the immediate effects seemed small, but a decade later the evidence suggests that there have been noticeable changes.

How do each of you view the recent shifts in U.S. trade and immigration policy?

Irwin: A big question among trade economists today is: where did Donald Trump come from? Historically, shifts toward protectionism came from national consensus and Congressional legislation. But since World War II, many trade policy powers have been delegated to the president. The recent tariff shifts seem less the result of a generalized consensus than one president trying to reduce trade based on instincts he’s held for a long time. I don’t see a broad backlash against trade in the U.S. – except regarding China, where there is consensus around national security and geopolitical concerns.

Boustan: On immigration, Trump represents more continuity than rupture. Both parties have strengthened border security for decades, starting with fencing in the 1990s and expanding to drones and surveillance more recently. About half of undocumented immigrants today are visa overstays, which has shifted effort to interior enforcement. There is broad consensus on enforcing legal entry and removing immigrants who commit crimes, but the main debate is about overreach. Recent backlash against aggressive targeting of undocumented immigrants without other offenses has been relatively bipartisan. With immigration policy largely governed by executive orders since 2006, I don’t see much hope for comprehensive legislation in the current environment.

Khandelwal: Economists have long argued that tariffs are not the best way to address domestic problems created by trade. Governments have other tools – from retraining to housing reforms that make it easier for workers in hard-hit regions to move. A healthier debate would focus on the full range of tools available to manage shocks from trade, immigration, or technology.

What does this moment mean for the broader research agenda?

Boustan: There’s a sense that we’re living through history. With changes in tariff policy and geoeconomics, there’s a real hunger to look to the past for lessons. I see that among students, who represent the future of where the research frontier is going.

Khandelwal: I think we will see a wave of research articles studying the full consequences of the U.S. tariffs as they unfold – their impacts across different groups of consumers, producers, workers, sectors, and regions. And from the perspective of developing countries, although they have been hit with tariffs, their competitors may be hit harder, creating opportunities in these turbulent times.

Irwin: The U.S. hasn't used tariffs this way in about 80 years. With everything changing so rapidly, economists and journalists are increasingly asking: Have we done this before? What happened when we did? In some ways the attention to trade research is rewarding, but it’s also an indication of the current uncertainty: trade is supposed to be background noise, so it's bad news when it’s in the headlines.