I mmigration is a contentious issue in the industrialized nations of the world. This is true not merely in traditional receiving countries, such as the United States, Canada and Australia, but in recent decades also in Europe, which historically experienced net emigration. In Europe, for example, support has risen in recent years for virulently anti-immigrant political parties, such as the National Front in France, the National Alliance in Italy, and the Republikaner in Germany. The debate has a particularly interesting twist in those countries most of whose residents are themselves descendants of immigrants. The inscription on the Statue of Liberty exhorts the world to "give me your tired, your poor, your huddled masses yearning to breathe free. .. ." Yet there has always been a tension between this open-door philosophy and fear of the economic and social impact of the next wave of immigrants. Many of the key issues in the debate on immigration policy are economic. Most attention has been paid to the potential adverse effect on the labor market outcomes of native-born workers: immigrants may compete with native-born workers in the labor market, displacing them in employment or bidding down wages. Less attention has been devoted to the possible benefits of immigration. Immigrants may complement some native factors in production, which would lead to these factors benefiting from immigration, and overall welfare may rise. Another question less commonly asked is how immigration influences growth in per capita income. Cases in which it would be interesting to understand this link include the role of immigration in creating the large internal American