David R. Henderson  

An Immigration Puzzle Solved

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Of immigration and partial derivatives.

To the surprise of some, the Republican Congress largely supports Trump's restrictionist approach to immigration. Apparently Republicans are favoring their nativist base over their traditional allies in business. Why?

The Republican Party has long been the party of both business and nativists. For most of its history, the party's business wing has reined in the nativists. But aside from a few individual industries, businesses overall are less interested in open immigration -- freeing Republican members of Congress to cater to the nativists. It's not that nativism is increasing; it's that fewer businesses demand low-skilled immigrants.

This is from Margaret E. Peters, "Why did Republicans become so opposed to immigration? Hint: It's not because there's more nativism.", Washington Post, January 30, 2018.

Here's some of her evidence:

As part of my research, I checked to see whether businesses are indeed lobbying less often on immigration. To find this out, I examined which groups testified before Congress on immigration, using that as one measure of lobbying.

Here's what I found. In the 1950s, on average, more than eight businesses used to testify before Congress at each hearing on immigration. By 2010, that number had dropped to two, as you can see in the figure below. The decline has been even steeper for industries that have been exposed to increased imports from foreign countries -- from eight businesses that produce goods that can be traded per hearing in the 1950s to less than one today.

Some industry groups have increased their lobbying for more immigration -- but those are in the tech sector and others that use high-skill labor. We should expect, then, that Trump will continue to push in his State of the Union address Tuesday for a "merit-based system" in which immigrants with high skills get priority.

In contrast, lobbying by nativist groups has hardly increased.

One of the most important things I learned as a math major that I've carried over to economics is the idea of a partial derivative. When y depends not just on x but also on z, what happens when z changes but x doesn't? That's what appears to be going on here, where x is nativist sentiment and z is business lobbying to allow low-skilled immigration.

The book that Professor Peters refers to is Trading Barriers: Immigration and the Remaking of Globalization, Princeton University Press, 2017.

HT2 David Levey.

COMMENTS (3 to date)
Hazel Meade writes:

A very interesting post!
And it comports well with what has been a decline in illegal immigration noted by Timothy Taylor a couple of years ago:

If there is less demand for unskilled labor, then that would be manifested in lower levels of immigration by unskilled laborers, and by less lobbying for fewer immigration restrictions by businesses.

But that also implies that the fears of the nativists are unfounded - there aren't jobs for all these unskilled immigrants anyways, and they are not coming here in large numbers anymore anyway. So there's no reason to fear an influx of unskilled labor. What's actually in demand is skilled workers, precisely of the sort that adovcates of "skills based" immigration claim to want. Perhaps the shift in rhetoric towards skills based immigration is really driven by a shift in business demand.

This does leave unexplained the pushback against H1-B visas, but provides some hope that business demand will counter that pushback.

Sidenote: as a trial run for a skills-based immigration program, what about replacing the visa lottery with a "visa scholarship" program? Maybe even have a little essay section where the applicant explains "Why I want to be an American."

Phil writes:
In the 1950s, on average, more than eight businesses used to testify before Congress at each hearing on immigration. By 2010, that number had dropped to two, as you can see in the figure below.

I study defense budgeting for a living and in the 1960s, only 16% of those who testified before defense committees were representing groups other than government agencies (GAO, CBO, Defense Officials). Today it is about 30%. The number of interest groups, industry groups, and individual businesses testifying before Congress has doubled. If that fact is generalizable to the question of immigration, the change in the impact of business on public policy (as measured by congressional testimony) is twice as profound.

(Reference: Chapter 5, specifically table 5.2, of National Defense Budgeting and Financial Management by Candreva, IAP Publishing, 2017)

David R. Henderson writes:

Interesting point. Thanks.
Wouldn’t we need to know the absolute number of non-government testifiers to draw your conclusion? What if the number of non-government testifiers were the same throughout the period? I’m not saying it is, but I would want to know.

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