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POTENTIAL CHANNELS OF IMMIGRANT INFLUENCE ON THE ECONOMY OF THE RECEIVING COUNTRY* MICHAEL J. GREENWOOD Department of Economics Center for Economic Analysis Campus Box 257 University of Colorado Boulder, Colorado 80309 ABSTRACT Immigrants may affect natives through a number of channels. Among these many channels of influence, the production-theory and public-sector channels have been most frequently studied in the context of contemporary U.S. immigration. Other channels that may be important are changed local demand for final goods and services (including that generated by immigrant wealth), indirect and induced demands for factors of production, demand for fixed capital (e.g., housing) and land, technological change, scale and agglomeration economies, unemployment, labor force participation, inflation, balance of payments, regional and national net exports, internal migration, remittances, externalities, and fertility patterns. This paper discusses certain problems with the use of the production-theory and public-sector channels and also describes the potential importance of other channels, as indicated for other countries and/or for other periods of time. While these alternative channels may sometimes reinforce the two, they frequently run counter to them. 1. INTRODUCTION For many years after the imposition of restrictive entry quotas in the early 1920s, U.S. immigration issues were generally of little concern to economists and other social scientists. First binding quotas, and later the effects of the depression and World War II, resulted in sharply reduced immigration compared to levels of the late nineteenth and early twentieth centuries. When, during the 1950s, immigration again bega