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Why do some policymakers open their borders to unskilled immigrants while others restrict immigration? This article argues that substantial natural resource wealth leads to policy restrictions on immigration inflows by reducing the size of the pro-immigration business coalition. When labor-intensive firms in the tradable sector perish due to deindustrialization during a resource boom, they no longer support pro-immigration policy. Without business support for increased immigration, policymakers close their doors to immigrants. Moreover, trade liberalization exacerbates this negative effect of natural resource income on immigration policy openness by expediting firm deaths in the tradable sector. These adverse effects, also known as the Dutch Disease, do not materialize in economies lacking resource income, so their immigration policies are more open than the immigration policies of resource-rich economies. Using a newly expanded dataset on immigration policy across 24 wealthy democracies, I find strong evidence for the theoretical prediction with respect to oil income per capita in the post-World War II era. This finding about oil-rich democracies sharply contrasts oil-rich autocracies' tendency to rely on low-skilled immigrants. This juxtaposition suggests an important role of political institutions in modifying the relationship between oil and immigration policy.
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