Border wall expansion, 2007-2010, harmed Mexican workers & high-skill U.S. workers, but benefited U.S. low-skill ones; reduced trade costs between US & Mexico by 25% should have reduced Mexico to US migration with welfare gains

Border Walls. Treb Allen, Cauê de Castro Dobbin, Melanie Morten. NBER Working Paper No. 25267, Nov 2018, https://www.nber.org/papers/w25267

What are the economic impacts of a border wall between the United States and Mexico? We use confidential data on bilateral flows of primarily unauthorized Mexican workers to the United States to estimate how a substantial expansion of the border wall between the United States and Mexico from 2007 to 2010 affected migration. We then combine these estimates with a general equilibrium spatial model featuring multiple labor types and a flexible underlying geography to quantify the economic impact of the wall expansion. At a construction cost of approximately $7 per person in the United States, we estimate that the border wall expansion harmed Mexican workers and high-skill U.S. workers, but benefited U.S. low-skill workers, who achieved gains equivalent to an increase in per capita income of $0.36. In contrast, a counterfactual policy which instead reduced trade costs between the United States and Mexico by 25% would have resulted in both greater declines in Mexico to United States migration and substantial welfare gains for all workers.