Economics of Immigration #1

We Wanted Workers is the title of a book about the economics of immigration. (There is little or nothing about refugees, crime, and terrorism.) The author is a Harvard University economist who has studied immigration for 30+ years. I read some of Thomas Sowell’s book many years ago, but it’s the only book I’ve read about immigration recently. That and immigration becoming a hot political issue prompted me to read it.

There are crucial differences between viewing immigrants as workers, and more broadly, as people. The things that immigrants experience are specific to time and place, the people involved, and the people affected, that it is easy to overgeneralize. One should be skeptical about “expert” opinion, especially when tied to a political opinion. 

The author lists several of his insights. 

- Those who choose to move to the USA are fundamentally different from those who stay behind. 

- Assimilation is not inevitable, and it may take decades. 

- Immigrants affect the job opportunities of natives via supply and demand. Data suggest a 10% increase in the number of workers in a skill group probably lowers the average wage of the group about 3%. 

- Immigrants in the workforce redistributes wealth from those who compete with them to those who use immigrants. 

- The welfare state makes it possible that gains from the employment of immigrants are offset by assistance payments if the immigrants are net users of social assistance programs. There is little doubt that immigrants receive more assistance than natives in the short-run, but this may reverse in the long-run. 

- The argument that models and data can determine public policy scientifically ignores the advocate’s motives. 

- Low-skill, low income immigrants have much different effects than high-skilled, high income ones. The former make use of public assistance; the latter do not. The latter pay higher than average taxes; the former lower than average taxes or none.
- The more one aggregates skill groups, the more one masks the effects on more specific skill groups. 

The ideology of open borders can be held by libertarians and many on the leftist political spectrum, for different motives. 

He contrasts native and immigrant a lot. They are not completely mutually exclusive in common usage. Native sometimes means somebody living in a particular place for a long time even if foreign-born. Also, an infant born shortly before his immigrant parents arrive in the USA does not differ in many other ways than one who was born in the USA shortly after his parents arrive. So it seems anomalous to call the first an immigrant and the second a native. On the other hand, such anomalies may not be statistically significant.