Amidst all the babble recently about building walls, travel bans, and so on, it was refreshing to find a reasoned and nuanced discussion of immigration issues in this week's EconTalk episode. Borjas, himself an immigrant, is less sanguine about the benefits of open borders than host Russ Roberts, and the friendly tension makes the conversation that much more lively. Both Borjas and Roberts agree that while supply and demand analysis is useful, it nonetheless has its limitations. In their conversation, they employ these tools to look at the effect of varying flows of labor, goods, and capital into an economy. (If you're in the classroom, this episode could be the basis for a stupendous supply and demand graphing fest!!!)
The title of the episode (and Borjas's book) is compelling, and is very illustrative of the point Borjas seems most to want to drive home. It comes from Swiss novelist Max Frisch, and the power is in the second clause: "We wanted workers...but we got people instead." Frisch was referring to the guest workers being imported into Europe, and particularly Germany, in the 1950s and 60s, contributing, in part, to the "German economic miracle." Says Borjas, "the reason that I think that's sort of one of the themes that I stress in the book is that even though I'm an economist, I tend to be a little dissatisfied with the very mechanical way in which economists view immigration. The typical--let me call it the 'economistic' way of looking at immigration looks at them as a bunch of robotic workers that you can basically move from place to place as the need arises...But the fact is that immigrants are human beings as well. And people make decisions. And people make decisions that are based on what is best for them...The point is that, the fact that immigrants are something beyond workers, and that they play a role that is not just this robotic kind of role of moving from factory to factory, means that we have to look at the impact of immigration in a much broader framework. We have to take immigrant decision-making into account, in particular."
Roberts and Borjas ultimately agree that there are in fact short-run costs implicit in immigration, particularly for native-born workers (though they do disagree somewhat on the size of said costs), and that policy makers would be well served to take such costs into account. It's much more "humanomics," to use Bart Wilson's phrase, than traditional economics. What the policy response should be to these costs remains an area of disagreement for the two. Roberts makes the argument that despite the potentially severe costs to the current generation, they may rest assured that the standard of living for their children's and grandchildren's generations will be much higher as a result. Borjas isn't so sure that's true.
The conversation closes with a very interesting discussion of assimilation (and Borjas's own experience fleeing Cuba early in the Castro regime). Borjas cites the early influence of Barry Chiswick on his early work on immigration. Chiswick argued there were tremendous benefits to assimilation, as he found immigrants who'd been in the United States longer earned much more than more recent arrivals. Again, Borjas was not sure, and relates back to the Cuban case. Perhaps, he and others have argued, the earlier immigrants were of a different sort (or more specifically, skill set) than the later, and that's what explains their higher earnings. He makes an important point about the (skill) distributional effects of immigration, again leaving a dangling policy question.