Bryan Caplan

DeLong on Borjas on Immigration

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Boo for Applause... Out of Your Opening Book...

DeLong concludes with a reasonable demand:

[T]he thing to object to in the turn this entire debate has taken has been the failure to focus evenly on the consequences for all stakeholders in global migration--look at what happens to everyone, not just one particular group that is convenient for your current political position.
But a paragraph earlier, he supplies what he's shopping for:
[I]ncreased immigration is very good for new migrants, good for savers worldwide, good for native-born workers, good for previous immigrants who have substantially assimilated--social knowledge, English proficiency, et cetera--and probably bad for previous immigrants who have not assimilated.

Yep. And when you remember that a lot of previous immigrants want to bring over family members, even the last one's not so clear. Foreign economists have hurt my income, but I'm glad to have them here; to me, they're family.


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COMMENTS (16 to date)
Buzzcut writes:

Foreign economists have hurt my income, but I'm glad to have them here; to me, they're family.

I don't get that comment. What, did your family immigrate here or something?

John Thacker writes:

I don't get that comment.

Explanation:

The people most hurt by immigration financially are recent immigrants who have not yet assimilated. However, especially given current immigration law, many new immigrants are family members of recent immigrants who have not yet assimilated, and many recent immigrants who have not yet assimilated try very hard to bring in their family members. So, many of the not-yet-assimilated immigrants who are hurt financially by new immigration may, on net, actually feel that they come out ahead overall by having their family members be able to come.

Professor Kling makes an analogy to economists. Academia is generally able to get who it wants to have jobs. Foreign economist immigration has almost certainly reduced his salary. However, he views them like family, and the various non-financial benefits from having these friends around outweighs, to him, the financial loss.

Therefore, many of the people who are financially hurt by immigration may say that the other benefits outweigh the financial loss. Economists are not the same as bean-counting hacks who focus on money or some other statistic alone.

spencer writes:

Like the supply of medical doctors the supply of economists is limited by the number of schools turning out economists with advanced degrees.
The supply of economists working in the US with degrees from foreign universities is insignificant
relative to the total supply of academic economists. So what we are left with is foreign graduates of US universities granting advance degrees in economics. But even if that is a significant number it probably has not expanded the total number of economist. I suspect, that foreign economist studying in US universities largely displace American students, rather then increasing the supply of competitors for economist jobs.

Consequently, I seriously doubt that foreign economist have hurt Caplan's income.Like medical
doctors, economist incomes are protected by the credentials bottleneck.

At this blog you are always taking the position that we should expand the number of doctors by
reducing the credentials bottleneck. Do you agree that we should do the same thing for economist.
Without doing that it is hard to see how foreign economist could hurt Caplan's income.

John Thacker writes:

But even if that is a significant number it probably has not expanded the total number of economist. I suspect, that foreign economist studying in US universities largely displace American students, rather then increasing the supply of competitors for economist jobs.

I would disagree, partially because I know it's not that true in the case of mathematics.

1) American students are eligible for NSF funding and other means of support.

2) Ph.D. granting graduate programs and academic jobs are particularly attractive to foreign students precisely because of the very open immigration policy. American students who are skilled in mathematics and other subjects have greater opportunities to enroll in other, non-academic fields, (including law, consulting, finance, industry jobs in engineering, etc.) that are much less available to foreign students.

3) One interesting effect of 2) is that there are very, very few Asian-American Ph.D. mathematics degrees granted each year. Tons of foreign Asian students (Chinese especially), and tons of Asian-American Engineering and Computer Science degrees that go directly into the industry (perhaps after a Master's or Ph.D.), but very few who go into academia, and very few who get Ph.D.s in subjects like math that tend to lead to academia.

4) Since academic jobs are relatively more attractive (since possible to get) than industry jobs for foreign students, the open immigration policy for academic jobs (and for graduate school study leading to academic jobs) almost assuredly lowers academic salaries, since higher salaries would otherwise be needed to compete with industry salaries.

5) Even if the number of academics stayed the same, currently the schools and colleges have their choice of all economists in the world. Any foreign student or economist currently preferred over an American presumably has something going for him. The American replacement would either require a higher salary/more support, be an inferior economist, or some combination. Having worse fellow students overall in the US plus it being harder for foreign students to come would make it easier for someone going into academia anyway to get the best postdocs and best faculty positions, among other things. Some of my best fellow students at Cornell were foreign, and they took excellent positions at US schools. If you argue that those positions would have existed otherwise, then surely you must argue that some Americans would have benefited by getting those prestigious positions instead? Perhaps Professor Kling would have gotten better offers.

All that said, I still support immigration.

John S Bolton writes:

How are prospective immigrants to be considered
'stakeholders' in a share of the income of the net taxpayers of our citizenry, given that many immigrants go on to net public subsidy?
The least loyalty we can have, to avoid being accessory to treason, is to take the side of fellow citizens when foreigners increase the level of aggression, and do it here, inside the borders.

spencer writes:

John -- while what you say is correct about scientific fields like math it does not hold that much for economics. The position outside of academics for economist are much more limited then for the scientific fields.

but since Caplan made the statement, I would expect him to have some facts or data to support it.

Steve Sailer writes:

"T]he thing to object to in the turn this entire debate has taken has been the failure to focus evenly on the consequences for all stakeholders in global migration--look at what happens to everyone, not just one particular group that is convenient for your current political position."

I realize that economists are the fount of all moral wisdom, but there is this little problem called the Constitution, which for some inexplicable reason doesn't give the vote to foreigners. I'm sure, though, that if you proposed a constitutional amendment to rectify that oversight, it would pass in a flash.

TGGP writes:

Borjas responds here.

Mr. Econotarian writes:
I realize that economists are the fount of all moral wisdom, but there is this little problem called the Constitution, which for some inexplicable reason doesn't give the vote to foreigners.

You'll have to point out where in the Constitution it says anything about having to be a citizen to vote. In general, it is up to the States to determine who can vote.

Even in the 17th Amendement, it says "The Senate of the United States shall be composed of two Senators from each State, elected by the people thereof, for six years; and each Senator shall have one vote." Note "people thereof," not "citizens".

Historically, states and localities have had no trouble giving the vote to non-citizens, both in much of the 19th Century, and this has started up again recently.

Steve Miller writes:

"while what you say is correct about scientific fields like math it does not hold that much for economics. The position outside of academics for economist are much more limited then for the scientific fields."

What makes you say that, Spencer? My impression, having been an economist on the job market last year, was that there are many non-academic options for Ph.D. economists. Are you just imagining that's the case?

Peter Schaeffer writes:

Robert Rector of the Heritage Foundation has demonstrated that unskilled immigration are a large burden on the US economy. Each unskilled immigrant household costs the American people $19,588 (back in 2004, more now of course).

What I find impressive about this discussion of immigration is how "fact free" it is. Superficial economic theory combined with 1900 nostalgia. This is no basis for rational policy making.

If anyone thinks immigration is a plus for the American people, please explain why Americans are fleeing high immigration areas by the millions. California alone has lost several million natives in recent years.

The real answer is obvious. Mass immigration is a massive negative and the locals are voting with their feet. Econ 101 for those who haven’t taken it.

Mr. Econotarian writes:
Robert Rector of the Heritage Foundation has demonstrated that unskilled immigration are a large burden on the US economy. Each unskilled immigrant household costs the American people $19,588

This is incorrect. Rector found that the average low-skill immigrant household had a governmental fiscal deficit of $19,588 (government expenditures of $30,160 minus $10,573 in taxes).

This is a cost to governments, not to American people, or the economy as a whole. Unlike the USSR, there is an economy in the US beyond just the government.

Most American people actually benefit from the economy-wide enhancement of wages of skilled workers which has been shown due to the participation of unskilled immigrants in the economy.

Recent work by the president's Council of Economic Advisers, concludes that foreign-born workers have increased earnings for native-born workers by as much as $80 billion a year.

Moreover, it is likely that the children and grandchildren of these immigrants will be net tax payers rather than tax receivers, so the $19K figure per household is only a short-term result.

Finally, many economists would suggest that governments review many of their redistributionist policies and eradicate the ones which are not beneficial to the economy. Too much unproductive socialism is not a great excuse for removing the freedom of movement of labor.

Mr. Econotarian writes:

One more item, the president's Council of Economic Advisors has also shown that immigrants and their children contribute about $80,000 more per person in tax dollars over the long run than they claim in government benefits and services.

I think we can all agree that typically first-gen low-skill immigrants do cost governments on arrival, but over time as they gain skills and have children educated in the US, the combination produces more taxes than they consume.

Immigrants are a long-term investment in the country's economy. No one knew my unskilled immigrant ancestors would lead to a slew of great-grandchildren who are doctors, business leaders, engineers, and oceanographers with advanced degrees.

If anyone thinks immigration is a plus for the American people, please explain why Americans are fleeing high immigration areas by the millions. California alone has lost several million natives in recent years.

At any given point in time, housing in a a city is limited. In a (relatively) free market, a given house will go to whomever wants the house the most (and is able to pay).

For recent immigrants, living in an immigrant community offers many benefits--they can be assured that they will be able to find someone who speaks their language, they can find foods from their home country, they will have a network of friends and family who can help them find jobs, get an apartment, etc.

English speaking natives, on the other hand, can find a community and get jobs as easily almost anywhere else in the country. They would not be giving up nearly as much as an immigrant to live somewhere else.

Therefore, immigrants are going to value living in immigrant centers such as L.A., New York, and Miami more than an English speaking native, and they're going to be willing to bid up the price of housing higher than the native is willing to pay. (Or alternatively, natives who already own homes may sell their home to realize the gain that increased demand for their home has given them.)

Thus, you may see net native out-migration even though the overall standard of living has not changed or has improved.

Horatio writes:

Peter

I assume that study counted the children of immigrants as natives. I do not know the situation in California, but I know the process in NYC. Immigrants are comfortable in big cities where they can find people and customs that are familiar. However, their children are usually "Americanized" and many move out of the city to pursue their careers. A large component of the native departure rate may be the children of immigrants moving towards demographic equilibrium.

TGGP writes:

Moreover, it is likely that the children and grandchildren of these immigrants will be net tax payers rather than tax receivers, so the $19K figure per household is only a short-term result.
I don't know how many times I have to point this out but from first generation to second and from second to third crime, welfare dependency and illegitimacy all increase. Assimilation goes the wrong way, toward the ghetto rather than middle class norm. When it comes to education, by third generation it plateaus well below the national average.

the president's Council of Economic Advisors has also shown that immigrants and their children contribute about $80,000 more per person in tax dollars over the long run than they claim in government benefits and services.
They made a laughable assumption which Borjas points out here.

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