« Do Medical Report Cards Improve Surgical Outcomes? | Main | Grover Norquist on Government Spending, Privatization, Low Poll Numbers, and Health Care »

Thursday, July 06, 2006

The Debate over Immigration

This is a summary of the economic and political issues surrounding the immigration debate by Roger Lowenstein from The New York Times Magazine. It's somewhat long, but it does a good job of summarizing the economic research in this area and is worthwhile reading for anyone interested in immigration issues:

Update: Greg Mankiw and Brad DeLong talk about libertarian, egalitarian, and cosmopolitan explanations for why economists do or do not support immigration. Here's Brad's post:

Greg Mankiw Explains Why Economists Favor Immigration: He does it very very well:

Greg Mankiw's Blog: Why Economists Like Immigration: With members of the House and Senate sparring over immigration reform, it is worth summarizing why most economists are sympathetic with the more welcoming approach of the Senate bill.

The study of economics leaves a person with two strong impulses:

The Libertarian Impulse: Mutually advantageous acts between consenting adults should, absent externalities, be permitted. The ability to engage in such trades is how people in free-market economies achieve prosperity. When the government impedes voluntary exchange, it prevents the invisible hand of the market from working its magic.

The Egalitarian Impulse: The market economy rewards people according to supply and demand, not inherent worth. Markets often fail to provide people the ability to adequately insure themselves against the vicissitudes of life and accidents of birth. We should, therefore, look for ways to help those who end up at the bottom of the economic ladder.

Most economists feel these two impulses to some degree. The difference between right-leaning and left-leaning economists is how strongly they feel each of them. Right-leaning economists have a stronger libertarian impulse, whereas left-leaning economists have a stronger egalitarian impulse.

Although some debates in economics come down to which impulse a person feels more strongly, on immigration the two impulses are reinforcing. The libertarian impulse says, let the American employer hire the Mexican worker, for it is voluntary exchange. The egalitarian impulse takes note that the Mexican immigrant is the poorest person involved in the situation, and he benefits from more relaxed immigration restrictions.

Here is a conjecture: Whenever a policy appeals to both the libertarian impulse and the egalitarian impulse, economists will offer a relatively united view, as they do on the topic of immigration.

I would add a third impulse: the cosmopolitan impulse. Economists tend to think that foreigners are people, and thus that their well-being counts. From the economist's point of view, increasing immigration is a hell of a powerful global economic development policy. The most you can say for restricting immigration is that it is an extremely costly and relatively ineffective domestic anti-poverty policy.

And then, of course, there is George Borjas, who is (a) an economist who is (b) not in favor of immigration from Latin America.

Greg says the libertarian and egalitarian impulses, "are reinforcing" and that is why "economists ... offer a relatively united view ... on immigration," and Brad reinforces this with his cosmopolitan impulse. I would qualify this discussion slightly along Brad's lines. It depends upon your welfare function as well and that is another way to frame the impulse to support, or not to support, immigration. If you are a person, economist even, who cares deeply about the poor anywhere in the world irrespective of borders, the benefits of low-skill immigration will look quite different than they will to someone who believes our allegiance is to our own poor first and foremost (though there are those who argue the costs are low or absent even for low skill domestic workers - see the article below). From a policymaker's perspective, what should U.S. policy address, the welfare of poor anywhere in the world which may represent the preferences of constituents, or should U.S. economic policy attempt only to maximize the welfare of U.S. citizens?:

The Immigration Equation, by Roger Lowenstein, NY Times: The day I met George Borjas ..., the United States Senate was hotly debating what to do about the country’s immigration policy. Borjas professed to be unfazed by the goings-on in Washington. A soft-spoken man, he stressed repeatedly that his concern was not to make policy but to derive the truth. To Borjas, a Cuban immigrant and the pre-eminent scholar in his field, the truth is pretty obvious: immigrants hurt the economic prospects of the Americans they compete with. And now that the biggest contingent of immigrants are poorly educated Mexicans, they hurt poorer Americans, especially African-Americans, the most.

Borjas has been making this case — which is based on the familiar concept of supply and demand — for more than a decade. But the more elegantly he has made it, it seems, the less his colleagues concur. ‘‘I think I have proved it,’’ he eventually told me, admitting his frustration. ‘‘What I don’t understand is why people don't agree with me.''

It turns out that Borjas's seemingly self-evident premise — that more job seekers from abroad mean fewer opportunities, or lower wages, for native workers — is one of the most controversial ideas in labor economics. ...

[Among] economists ..., the consensus of most is that, on balance, immigration is good for the country. Immigrants provide scarce labor, which lowers prices in much the same way global trade does. And overall, the newcomers modestly raise Americans' per capita income. But the impact is unevenly distributed; people with means pay less for taxi rides and household help while the less-affluent command lower wages and probably pay more for rent.

The debate among economists is whether low-income workers are hurt a lot or just a little — and over what the answer implies for U.S. policy. If you believe Borjas, the answer is troubling. A policy designed with only Americans' economic well-being in mind would admit far fewer Mexicans... Borjas, who emigrated from Cuba in 1962, when he was 12 (and not long after soldiers burst into his family's home and ordered them at gunpoint to stand against a wall), has asserted that the issue, indeed, is "Whom should the United States let in?"

Such a bald approach carries an overtone of the ethnic selectivity that was a staple of the immigration debates a century ago. It makes many of Borjas's colleagues uncomfortable, and it is one reason that the debate is so charged. Another reason is that many of the scholars who disagree with Borjas also hail from someplace else .., a surprising number of Ph.D. economists in the U.S. are foreign-born.

Easily the most influential of Borjas's critics is David Card, a Canadian who teaches at Berkeley. He has said repeatedly that, from an economic standpoint, immigration is no big deal and that a lot of the opposition to it is most likely social or cultural. "If Mexicans were taller and whiter, it would probably be a lot easier to deal with," he says pointedly.

Economists in Card's camp tend to frame the issue as a puzzle — a great economic mystery because of its very success. The puzzle is this: how is the U.S. able to absorb its immigrants so easily? After all, 21 million immigrants, about 15 percent of the labor force, hold jobs in the U.S., but the country has nothing close to that many unemployed. ... So the majority of immigrants can't literally have "taken" jobs; they must be doing jobs that wouldn't have existed had the immigrants not been here.

The economists who agree with Card also make an intuitive point, inevitably colored by their own experience. To the Israeli-born economist whose father lived through the Holocaust or the Italian who marvels at America's ability to integrate workers from around the world, America's diversity — its knack for synthesizing newly arrived parts into a more vibrant whole — is a secret of its strength. To which Borjas, who sees a different synthesis at work, replies that, unlike his colleagues, the people arriving from Oaxaca, Mexico, are unlikely to ascend to a university faculty. Most of them did not finish high school....

What economists aim for is to get beneath the anecdotes. Is immigration still the engine of prosperity that the history textbooks describe? Or is it a boon to business that is destroying the livelihoods of the poorest workers — people already disadvantaged by such postmodern trends as globalization, the decline of unions and the computer?

{ The Lopsided-Skill-Mix Problem }

This spring, ... I sampled the academic literature and spent some time with Borjas and Card and various of their colleagues. I did not expect concurrence, but I hoped to isolate what we know about the economic effects of immigration from what is mere conjecture. The first gleaning ... came as a surprise. All things being equal, more foreigners and indeed more people of any stripe do not mean either lower wages or higher unemployment. If they did, every time a baby was born, every time a newly minted graduate entered the work force, it would be bad news for the labor market. But it isn't. Those babies eat baby food; those graduates drive automobiles.

As Card likes to say, "The demand curve also shifts out." ... New workers add to the supply of labor, but since they consume products and services, they add to the demand for it as well... In theory, if you added 10 percent to the population — or even doubled it — nothing about the labor market would change. Of course, it would take a little while for the economy to adjust. People would have to invest money and start some new businesses to hire all those newcomers. The point is, they would do it. Somebody would realize that the immigrants needed to eat and would open a restaurant; someone else would think to build them housing. Pretty soon there would be new jobs available..

But there's a catch. Individual native workers are less likely to be affected if the immigrants resemble the society they are joining — not physically but in the same mix of skills and educational backgrounds. For instance, ... as Borjas asked pointedly of me, what if the U.S. created a special visa just for magazine writers? All those foreign-born writers would eat more meals, sure, but (once they mastered English, anyway), they would be supplying only one type of service — my type. Bye-bye fancy assignments.

During the previous immigrant wave, roughly from 1880 to 1921 ..., the immigrants looked pretty much like the America into which they were assimilating. ... This time it's different. The proportion of foreign-born, at 12 percent, remains below the peak of 15 percent recorded in 1890. But compared with the work force of today, however, the skill mix of immigrants is lopsided. ... [M]any more — including most of the those who have furtively slipped across the Mexican border — don't have high-school diplomas..., and it's those immigrants — the illegal ones — who have galvanized Congress. ...

It baffles some economists that Congress pays so little heed to their research, but then immigration policy has never been based on economics. Economic fears played a part in the passage of the exclusionary acts against Chinese in the late 19th and early 20th centuries, and in the 1920's of quotas (aimed in particular at people from southern and eastern Europe), but they were mostly fueled by xenophobia. They were supplanted in the Civil Rights era by the Immigration and Nationality Act of 1965, which ended quotas and established a new priority based on family reunification. That law, also sponsored by Kennedy, had nothing to do with economics, either. It made the chief criterion for getting in having a relative who was already here.

If economists ran the country, they would certainly take in more immigrants who, like them, have advanced degrees ... and one thing the economists agree on is that high earners raise the national income by more than low earners. They are also less of a burden on the tax rolls.

With the exception of a few border states, however, the effect of immigration on public-sector budgets is small, and the notion that undocumented workers in particular abuse the system is a canard. Since many illegals pay into Social Security (using false ID numbers), they are actually subsidizing the U.S. Treasury. And fewer than 3 percent of immigrants of any stripe receive food stamps. Also, and contrary to popular wisdom, undocumented people do support local school districts, since, indirectly as renters or directly as homeowners, they pay property taxes. Since they tend to be poor, however, they contribute less than the average. ... They are certainly a burden on hospitals and jails but, it should be noted, poor legal workers, including those who are native born, are also a burden on the health care system.

{ Parsing the Wage Gap }

Economists focus on Mexicans not because many are undocumented but because, relative to the rest of the labor force, Mexicans have far fewer skills. And Mexicans and other Central Americans (who tend to have a similar economic background) are arriving and staying in this country at a rate of more than 500,000 a year. Their average incomes are vastly lower than those both of native-born men and of other immigrants. ...

The reason Mexicans earn much less than most Americans is their daunting educational deficit. More than 60 percent of Mexican immigrants are dropouts; fewer than 10 percent of today's native workers are.

That stark contrast conveys, to economists, two important facts. One is that Mexicans are supplying a skill level that is much in demand. It doesn't just seem that Americans don't want to be hotel chambermaids, pick lettuce or repair roofs; it's true. Most gringos are too educated for that kind of work. The added diversity, the complementariness of skills, that Mexicans bring is good for the economy as a whole. They perform services that would otherwise be more expensive and in some cases simply unavailable.

The Americans who are unskilled, however, must compete with a disproportionate number of immigrants. One of every four high-school dropouts in the U.S. was born in Mexico, an astonishing ratio given that the proportion of Mexicans in the overall labor force is only 1 in 25. So it's not magazine writers who see their numbers expanding; it's Americans who are, or would be, working in construction, restaurants, household jobs, unskilled manufacturing and so forth.

That's the theory. But economists have had a hard time finding evidence of actual harm. For starters, they noticed that societies with lots of immigrants tend, if anything, to be more prosperous, not less. In the U.S., wages in cities where immigrants have clustered, like New York, have tended to be higher, not lower. Mississippi, on the other hand, which has the lowest per-capita income of any state, has had very few immigrants.

That doesn't necessarily mean that immigrants caused or even contributed to high wages; it could be they simply go where the demand is greatest — that their presence is an effect of high wages. As statisticians are wont to remind us, "Correlation does not imply causation." ... Maybe without immigrants, wages in New York would be even higher.

And certainly, wages of the unskilled have been a source of worry for years ..., at least if you care about wage inequality. ...[N]ative-born dropouts are earning only a shade more than Mexicans working in this country. But that hardly proves that cheap Mexican labor is to blame. For one thing, economists believe that other factors, like the failure of Congress to raise the minimum wage, globalization (cheap Chinese labor, that is) and the decline of unions are equally or even more responsible. Another popular theory is that computer technology has made skilled labor more valuable and unskilled labor less so.

Also, when economists look closely at wage dispersion, the picture isn't wholly consistent with the immigrants-as-culprits thesis. Look again at the numbers: people at the top (college grads) make a lot more than average but from the middle on down incomes are pretty compressed. Since only dropouts are being crowded by illegal immigrants, you would expect them to be falling further behind every other group. But they aren't; since the mid-90's, dropouts have been keeping pace with the middle; it's the corporate executives and their ilk at the top who are pulling away from the pack, a story that would seem to have little to do with immigration.

This isn't conclusive either, Borjas notes. After all, maybe without immigrants, dropouts would have done much better than high-school grads. Economists look for the "counterfactual," or what would have happened had immigrants not come. It's difficult to tell, because in the real world, there is always a lot more going on — an oil shock, say, or a budget deficit — than the thing whose effect you are studying. To isolate the effect of immigrants alone would require a sort of lab experiment. The trouble with macroeconomics is you can't squeeze your subjects into a test tube.

{ Marielitos in Miami, Doctors in Israel and Other Natural Experiments }

The academic study of immigration's economic effects earned little attention before the subject started to get political traction in the 1980's. Then, in 1990, Borjas ... published a book, "Friends or Strangers," which was mildly critical of immigration's effects.

That same year, David Card realized that a test tube did exist. Card decided to study the 1980 Mariel boat lift, in which 125,000 Cubans were suddenly permitted to emigrate. They arrived in South Florida with virtually no advance notice, and approximately half remained in the Miami area, joining an already-sizable Cuban community and swelling the city's labor force by 7 percent.

To Card, this produced a "natural experiment," one in which cause and effect were clearly delineated. Nothing about conditions in the Miami labor market had induced the Marielitos to emigrate; the Cubans simply left when they could and settled in the city that was closest and most familiar. So Card compared the aftershocks in Miami with the labor markets in four cities — Tampa, Atlanta, Houston and Los Angeles — that hadn't suddenly been injected with immigrants.

That the Marielitos, a small fraction of whom were career criminals, caused an upsurge in crime, as well as a more generalized anxiety among natives, is indisputable. It was also commonly assumed that the Marielitos were taking jobs from blacks.

But Card documented that blacks, and also other workers, in Miami actually did better than in the control cities. ... The only negative was that unemployment rose among Cubans (a group that now included the Marielitos). ... Card concluded, "The Mariel influx appears to have had virtually no effect on the wages or unemployment rates of less-skilled workers."

Although Card offered some hypotheses, he couldn't fully explain his results. The city's absorption of a 7 percent influx, he wrote, was "remarkably rapid" and — even if he did not quite say it — an utter surprise. Card's Mariel study hit the cloistered world of labor economists like a thunderbolt. All of 13 pages, it was an aesthetic as well as an academic masterpiece that prompted Card's peers to look for other "natural" immigration experiments. Soon after, Jennifer Hunt, an Australian-born Ph.D. candidate at Harvard, published a study on the effects of the return migration of ethnic French from Algeria to France in 1962, the year of Algerian independence. Similar in spirit though slightly more negative than the Mariel study, Hunt found that the French retour had a very mild upward effect on unemployment and no significant effect on wages.

Rachel Friedberg, an economist at Brown, added an interesting twist to the approach. Rather than compare the effect of immigration across cities, she compared it across various occupations. ... She focused on an another natural experiment — the exodus of 600,000 Russian Jews to Israel, which increased the population by 14 percent in the early 1990's. She ... concluded that the Russians hadn't caused wage growth to slacken; they had merely gravitated to positions that were less attractive. Indeed, Friedberg's conclusion was counterintuitive: the Russians had, if anything, improved wages of native Israelis. She hypothesized that the immigrants competed more with one another than with natives. The Russians became garage mechanics; Israelis ran the garages.

{ Measuring the Hit to Wages }

By the mid-90's, illegal immigration was heating up as an issue in the United States... But academics were coalescing around the view that immigration was essentially benign — that it depressed unskilled native wages by a little and raised the average native income by a little. In 1997, a panel of the National Academy of Sciences, which reviewed all of the literature, estimated that immigration during the previous decade had, at most, lowered unskilled-native wages by 1 percent to 2 percent.

Borjas didn't buy it. In 1999 he published a second, more strident book, "Heaven's Door." It espoused a "revisionist" view — that immigration caused real harm to lower-income Americans. Borjas argued that localized studies like Mariel were flawed, for the simple reason that labor markets in the U.S. are linked together. Therefore, the effects of immigration could not be gauged by comparing one city with another. ... Borjas reckoned that immigrants were pushing out native-born Americans, and that the effect of all the new foreigners was dispersed around the country.

The evidence of a labor surplus seemed everywhere. "If you wanted a maid," he recalled of California during the 90's, "all you had to do was tell your gardener, and you had one tomorrow." ... Borjas could calculate that, during the 80's and 90's, ... immigrants caused dropouts to suffer a ... wage loss of 5 percent over those two decades, some $1,200 a year. Other groups, however, showed a very slight gain. To many economists as well as lay folk, Borjas's findings confirmed what seemed intuitive all along: add to the supply of labor, and the price goes down.

To Card, however, what seems "intuitive" is often suspect. He became a labor economist because the field is full of anomalies. "The simple-minded theories that they teach you in economics don't work" for the labor market, he told me. ... In a recent paper, "Is the New Immigration Really So Bad?" Card took indirect aim at Borjas and, once again, plumbed a labor-market surprise. Despite the recent onslaught of immigrants, he pointed out, U.S. cities still have fewer unskilled workers than they had in 1980. Immigrants may be depriving native dropouts of the scarcity value they might have enjoyed, but at least in a historical sense, unskilled labor is not in surplus. America has become so educated that immigrants merely mitigate some of the decline in the homegrown unskilled population. Thus, in 1980, 24 percent of the work force in metropolitan areas were dropouts; in 2000, only 18 percent were.

Card also observed that cities with more immigrants, like those in the Sun Belt close to the Mexican border, have a far higher proportion of dropouts. This has led to a weird unbalancing of local labor markets. For example, 10 percent of the work force in Pittsburgh and 15 percent in Cleveland are high-school dropouts; in Houston the figure is 25 percent, in Los Angeles, 30 percent. The immigrants aren't dispersing, or not very quickly.

So where do all the dropouts work? Los Angeles does have a lot of apparel manufacturers but not enough of such immigrant-intensive businesses to account for all of its unskilled workers. Studies also suggest that immigration is correlated with a slight increase in unemployment. But again, the effect is small. So the mystery is how cities absorb so many unskilled. Card's theory is that the same businesses operate differently when immigrants are present; they spend less on machines and more on labor. Still, he admitted, "We are left with the puzzle of explaining the remarkable flexibility of employment demand."

Card started thinking about this when he moved from Princeton in the mid-90's. He noticed that everyone in Berkeley seemed to have a gardener, "even though professors are not rich." In the U.S., which has more unskilled labor than Europe, more people employ housecleaners. The African-American women who held those jobs before the war, like the Salvadorans and Guatemalans of today, weren't taking jobs; they were creating them.

{ The Personal Is Economic }

Though Card works on immigration only some of the time, he and Borjas clearly have become rivals. In a recent paper, Card made a point of referring to the "revisionist" view as "overly pessimistic." Borjas told Business Week that Card's ideas were "insane." ... Alan B. Krueger, an economist who is friendly with each, says, "I fear it might become acrimonious." Card told me twice that Borjas's calculations were "disingenuous." ...

Card is a political liberal with thinning auburn air and a controlled, smirky smile. His prejudices, if not his emotions, favor immigrants. Raised by dairy farmers in Guelph, Ontario, he remembers that Canadian cities were mostly boring while he was growing up. The ones that attracted immigrants, like Toronto and Vancouver, boomed and became more cosmopolitan. "

Everyone knows in trade there are winners and losers," Card says. "For some reason it doesn't stop people from advocating free trade." ... I honestly think the economic arguments are second order," Card told me when we discussed immigration. "They are almost irrelevant."

Card's implication is that darker forces — ethnic prejudice, maybe, or fear of social disruption — is what's really motivating a lot of anti-immigrant sentiment. Borjas, a Hispanic who has written in blunt terms about the skill deficits of Mexicans, in particular arouses resentment. "Mexicans aren't as good as Cubans like him," Douglas S. Massey, a demographer at Princeton, said in a pointed swipe. ...

{ Immigrants Can Be Complementary }

Economists on Card's side of the debate recognize that they at least have to deal with Borjas's data — to reconcile why the local studies and national studies produce different results. Card shrugs it off; even 5 percent for a dropout, he observes, is only 50 to 60 cents an hour. Giovanni Peri ... at the University of California, Davis, ... replicated Borjas's ... finding that unskilled natives suffer a loss relative to, say, graduates. He made different assumptions, however, about how businesses adjust to the influx of new workers, and as a result, he found that the absolute harm was less, or the gain was greater, for all native-born groups. By his reckoning, native dropouts lost only 1 percent of their income during the 1990's.

Peri's theory is that most of the wage losses are sustained by previous immigrants, because immigrants compete most directly with one another. ... For instance, if you have a big influx of chefs, you can use more waiters, pushing up their wages; if you have a lot of chefs and waiters, you need more Sub-Zeros, so investment will also rise. The only ones hurt, in this example, are the homegrown chefs — the people who are "like" the immigrants.

Indeed, workers who are unlike immigrants see a net gain; more foreign doctors increases the demand for native hospital administrators. Borjas assumes that a native dropout (or a native anything) is interchangeable with an immigrant of the same skill level. Peri doesn't. If enough Mexicans go into construction, some native workers may be hurt, but a few will get promotions, because with more crews working there will be a greater demand for foremen, who most likely will be natives.

Natives have a different mix of skills — English, for instance, or knowledge of the landscape. In economists' lingo, foreigners are not "perfect substitutes." (Friedberg also observed this in Israel.) In some cases, they will complement rather than compete with native workers...

{ Are All Dropouts the Same? }

I talked to half a dozen vintners and a like number of roofing-company owners, both fields that rely on Mexican labor, and frequently heard that Americans do not, in sufficient numbers, want the work. In the case of the vineyards, if Mexicans weren't available, some of the grapes would be harvested by machine...

If you talk to enough employers, you start to gather that they prefer immigrant labor over unskilled Americans. The former have fewer problems with tardiness, a better work ethic. Some of this may be prejudice. But it's possible that Mexican dropouts may be better workers than our dropouts. In Mexico, not finishing high school is the norm; it's not associated with an unsuitability for work or even especially with failure. In the U.S., where the great majority do graduate, those who don't graduate have high rates of drug use and problems with the law.

The issue is charged because the group with by far the highest rate of incarceration is African-American dropouts. Approximately 20 percent of black males without high-school diplomas are in jail. Indeed, according to Steven Raphael, a colleague of Card's at Berkeley, the correlation between wages and immigration is a lot weaker if you control for the fact that so many black men are in prison. But should you control for it? Borjas says he thinks not. It's pretty well established that as the reward for legal work diminishes, some people turn to crime. This is why people sold crack; the payoff was tremendous. Borjas has developed one of his graphs to show that the presence of immigrants is correlated with doing time, especially among African-Americans. Incarceration rates, he notes, rose sharply in the 70's, just as immigration did. He doesn't pretend that this is the whole explanation — only that there is a link.

Card retorts: "The idea that the way to help the lot of African-Americans is to restrict Mexicans is ridiculous." Black leaders have themselves mostly switched sides. In the 20's, A. Philip Randolph, who led the Pullman Porters, spoke in favor of immigration quotas, but the civil rights establishment no longer treats immigration as a big issue; instead it tends to look at immigrants as potential constituents. ...

{ The Limits of Economics }

Economists more in the mainstream generally agree that the U.S. should take in more skilled immigrants; it's the issue of the unskilled that is tricky. Many say that unskilled labor is needed and that the U.S. could better help its native unskilled by other means (like raising the minimum wage or expanding job training) than by building a wall. None believe, however, that the U.S. can get by with no limits. Richard B. Freeman of Harvard floated the idea that the U.S. simply sell visas at a reasonable price. The fee could be adjusted according to indicators like the unemployment rate. It is unlikely that Congress will go for anything so cute, and the economists' specific prescriptions may be beside the point. As they acknowledge, immigration policy responds to a host of factors — cultural, political and social as well as economic. Migrant workers, sometimes just by crowding an uncustomary allotment of people into a single dwelling, bring a bit of disorder to our civic life; such concerns, though beyond the economists' range, are properly part of the debate.

What the economists can do is frame a subset of the important issues. They remind us, first, that the legislated goal of U.S. policy is curiously disconnected from economics. Indeed, the flow of illegals is the market's signal that the current legal limits are too low. Immigrants do help the economy; they are fuel for growth cities like Las Vegas and a salve to older cities that have suffered native flight. Borjas's research strongly suggests that native unskilled workers pay a price: in wages, in their ability to find inviting areas to migrate to and perhaps in employment. But the price is probably a small one.

The disconnect between Borjas's results and Card's hints that there is an alchemy that occurs when immigrants land ashore; the economy's potential for absorbing and also adapting is mysterious but powerful. Like any form of economic change, immigration causes distress and disruption to some. But America has always thrived on dynamic transformations that produce winners as well as losers. Such transformations stimulate growth. Other societies (like those in Europe) have opted for more controls, on immigration and on labor markets generally. They have more stability and more equality, but less growth and fewer jobs. Economists have highlighted these issues, but they cannot decide them. Their resolution depends on a question that Card posed but that the public has not yet come to terms with: "What is it that immigration policy is supposed to achieve?"

    Posted by on Thursday, July 6, 2006 at 11:25 AM in Economics, Immigration, Policy, Politics | Permalink  TrackBack (0)  Comments (39)


    TrackBack URL for this entry:

    Listed below are links to weblogs that reference The Debate over Immigration:


    Feed You can follow this conversation by subscribing to the comment feed for this post.