Bryan Caplan  

Cato Journal Immigration Symposium Round-Up

MMT... Life Among the Thetes...
I've now read the full Cato Journal immigration issue cover-to-cover.  Leaving aside my lead article, here are my brief reactions:

1. Gordon Hanson, "Immigration and Economic Growth."  Pretty good, especially on the interaction between high-skilled native labor and low-skilled immigrant labor:
One contribution of low-skilled immigrants is to make it possible for high-skilled workers to spend more time on the job and less time doing non-work related chores... The majority of highly educated women are married to highly educated men (Isen and Stevenson 2010: 13). For both to work outside the home often requires hiring outside labor to care for children, clean the home, launder clothes, and tend to the yard. In a study of immigration's impact on U.S. cities, Cortes (2008) finds that metropolitan areas that have had larger influxes of low-skilled immigrants have lower prices for dry cleaning, child care, housing cleaning, yard care, and other labor-intensive services. Lower prices for these services translate into more hours spent at work for high-skilled workers, particularly among women with a professional degree or PhD (Cortes and Tessada 2009). Low-skilled immigration thus indirectly contributes to productivity growth by raising the effective supply of high-skilled labor.
2. Giovanni Peri, "Immigration, Labor Markets, and Productivity."  If all labor is identical, the effect of immigration on domestic wages is clearly negative, at least in the short-run.  But in reality, immigrant labor and native labor are very different - and it matters.  Peri provides an excellent survey of the evidence.  One highlight:
In Peri and Sparber (2009) we show that, due to the limited knowledge of the language, immigrants have a comparative advantage in manual type of jobs. Hence they specialize in those, and in firms and sectors that hire immigrants, this produces higher demand for jobs of coordination and interaction typically staffed by natives, whose language skills are superior. This dynamic specialization in tasks according to skills pushes natives to upgrade their jobs (as communication-intensive occupations pay better than manual intensive ones) and protects their wages from competition with immigrants.
3. Joel Kotkin and Erika Ozuna, "America's Demographic Future."  A good intro to the demographic effects of immigration.  Immigration is keeping America young and working:
Mexican and other immigrants are one key reason why America boasts a fertility rate 50 percent higher than Russia, Germany, or Japan, and well above that of China, Italy, Singapore, Korea, and virtually all of eastern Europe (The Economist 2002; United Nations 2005; Longman 2004: 60). Consequently, it is widely believed America's workforce will continue to grow even as that of Japan, Europe, Korea, and eventually even China will start to shrink.

Between 2000 and 2050, for example, the U.S. workforce is projected to grow by over 40 percent, while that of China shrinks by 10 percent, the EU by 25 percent and, most remarkably, Japan's by over 40 percent (U.S. Census Bureau International Database).
4. Stuart Anderson, "America's Incoherent Immigration System." A solid moderate reformist piece:
[M]uch can be accomplished by simply raising the quotas for temporary visas for both low- and high-skilled workers and increasing the number of green cards available for family and employer-sponsored immigrants.
5. Pia Orrenius and Madeline Zavodny.  "The Economic Consequences of Amnesty for Unauthorized Immigrants."  Pretty good, but most readers will get more out of the broader articles on the labor market and fiscal effects of immigration.

6. Edward Alden. "Immigration and Border Control."  Alden wants people to acknowledge the trade-off between the ease of legal immigration and the cost of border enforcement.  Perhaps he's just being strategic, but Alden shows little concern for the well-being of immigrants or the immorality of treating people like criminals for doing an honest day's work:
There are certainly many--indeed the majority of the American public at the moment--who would argue against higher levels of immigration. That is perfectly reasonable. But the debate should be an honest one. Larger legal quotas, especially for less-skilled workers, would reduce the need for enforcement; smaller quotas would increase it. Instead, the discussion is a disingenuous one in which many in Congress insist that the border must first be "secured" before any serious consideration of immigration reform can be permitted.
7. Jim Harper. "Internal Enforcement, E-Verify, and the Road to a National ID."  A frightening picture of rapid technological progress in the war on illegal immigration.  But like Alden, Harper shows little concern for the rights of immigrants.  And he frustratingly equivocates between the "values of the people" as expressed in private behavior, and the "values of the people" as expressed in the voting booth:
[T]he goal of many of E-Verify's proponents is to bring the rule of law to the immigration environment. Fealty to law is important for the maintenance of a just and stable society, and immigration law is widely disrespected and often broken. But good law is not a hammer waved over the heads of subservient people. Good law gives expression to the values of the people.

Immigration law is disrespected and broken not because it is poorly enforced, but because it is inconsistent with the will of the people. In the main, the majority of the American people express their will quietly but insistently in their decisions to hire good, hard workers, and to enjoy the product of these workers' labor, indifferent to where the worker was born.
8. Margaret Stock. "Is Birthright Citizenship Good for America?" Stock's answer, of course, is yes.  But her piece is not persuasive.  People oppose birthright citizenship because they oppose immigration.  If you don't change their minds about immigration, you won't change their minds about birthright citizenship, either.

9. Daniel Griswold. "Immigration and the Welfare State."  The best in the bunch.  Griswold provides a careful survey of the literature on the fiscal effects of immigration, and never forgets that immigrants count, too.  I'll blog the highlights in a separate post.

10. Raul Hinojosa-Ojeda. "The Economic Benefits of Comprehensive Immigration Reform."  Provides a computable general equilibrium model of the effects of different immigration reform scenarios.  Unfortunately, this approach just isn't transparent enough to change a skeptic's mind.  And I can't understand how the same model could imply that:

(a) Comprehensive immigration reform (amnesty, more or less) "results in higher wages--and higher worker productivity--for all workers in industries where large numbers of immigrants are employed."


(b) Under mass deportation, "Wages do rise for less-skilled native-born workers under this scenario, but they fall for higher-skilled natives and the U.S. economy loses a large numbers of jobs."

Perhaps I'm missing something, but how can amnesty and mass deportation both boost wages for less-skilled natives?

11. Joshua Hall, Benjamin VanMetre, and Richard Vedder. "U.S. Immigration Policy in the 21st Century: A Market-Based Approach."  A lot of good material, but it ends on a disappointingly agnostic and amoral note:
As has been shown in this article, for every pro-immigration argument there is an opposing anti-immigration argument and thus it is unlikely that there will be an immigration policy that everyone will agree on. It is possible, however, to devise an immigration policy that would appeal both to those supporting more immigrants and to those who complain about the character of immigration after 1965.
[C]reating an international market for visas. To start, each business day of the year 5,000 visas for entry to the United States would be sold in a NASDAQ-style marketplace by the federal government and each immigrant would need a visa to enter the country. There would also be a limited number of visas, maybe 100,000 annually, provided free by the federal government to refugees fleeing political, religious, or other persecution as is
done under current law.
My question for the authors: You find it "unlikely that there will be an immigration policy that everyone will agree on."  Fair enough.  But what makes you think that your proposal will have broader appeal than any other proposal on the table?  Indeed, how many non-economists would even consider your approach?

COMMENTS (6 to date)
mike shupp writes:

Looking at this from another direction, we've got a lot of people in this country trapped in dead-end jobs pr long-term joblessness. Would they be better off if they emigrated to other lands? And what policies should the US govt pursue to make other nations receptive to our emigrants?

John Thacker writes:
Perhaps I'm missing something, but how can amnesty and mass deportation both boost wages for less-skilled natives?

I can imagine an argument based around the idea that illegal immigrants are reluctant to unionize or bargain for higher wages, and that employers have greater bargaining power against them because of the fear of deportation. Actually deporting them or legalizing them would eliminate this "reserve army."

I'm not sure I buy the argument, but that's what comes to mind.

Charlie writes:

"But what makes you think that your proposal will have broader appeal than any other proposal on the table?"

This is actually the proposal I favor, so I will answer for myself. A lot of the arguments against immigration could be satisfied if transfers were made. For instance, states (especially Southern states) complain that too much of their tax dollars is spent on illegal immigrants. In this system, money could be transferred to those parties for medicare, public education, and boarder security in order to try to forge a compromise. This money would come from immigrants that would benefit coming to America and from businesses that will benefit from hiring immigrants. This transfer from winners to losers (or perceived losers) can make everyone better off.

Second, it puts a transparent price on the value of immigration. Americans do not directly see the value of immigration. They do not see the benefits they derive. A market makes some of those benefits more transparent. That transparent price will create some incentive to increase the amount of immigration to extract those rents. Even if we only end up at the revenue maximizing level of immigration, that would be considerably more immigration than we have today.

"how many non-economists would even consider your approach?"

This is fair, but I think the idea suffers tremendously from weirdness right now. People that I talk to on both sides of the issue are often reflexively against it. Anti-immigration people can see it as a trick or something and pro-immigration people see it as commodotizing people. But these ideas can change, if high profile people on both sides can convince people that it is better for them. And with the right transfers, it should be.

Even if only a very small number of visas were auctioned initially, I think the program would start turning heads.

Charlie writes:

*medicare should be medical care or medicaid (for kids). The argument being that illegal immigrants show up in emergency rooms and don't pay for services.

HH writes:

Perhaps I'm missing something, but how can amnesty and mass deportation both boost wages for less-skilled natives?

I assume the idea is that either way, there is less low-cost competition for unskilled workers. It's obvious if the competition is deported. The effect is similar if you raise the cost of hiring the competition. I imagine the assumption is that illegal laborers demand less in wages and benefits, while citizens/legal aliens are entitled to more (usually statutorily). By raising making illegal immigrants legal aliens, the cost of hiring them is similar to that of native unskilled laborers. Presumably, this eases the downward pressure of wages for unskilled workers because there is no lower-cost alternative.

ChrisH writes:
how can amnesty and mass deportation both boost wages for less-skilled natives?

Hawthorne effect.

Comments for this entry have been closed
Return to top