Immigration Economics and Immigration Policy

George J. Borjas Harvard University

April 2018

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ImmigrationEconomicsandImmigrationPolicy

GeorgeJ.Borjas*

The“economistic”perspectivehasgreatlyinfluencedhowmanyobserversthink

aboutthebenefitsandcostsofimmigration.Inthisperspective,immigrationislike

internationaltrade.Afterall,bothinvolveflowsacrossnationalboundaries.Inthecaseof

trade,manufacturedwidgetsaretransportedfromonecountrytoanother.Inthecaseof

immigration,humanbeingstransportthemselvesacrossthoseboundaries.

Thinkofwhatitmeanstoimportthatproverbialwidget.Itdidnotcreateitselfout

ofthinair;itwasmanufacturedbycombiningphysicalresourceswithsomelaborinputs.

Forexample,makingasinglewidgetinChinamayrequiretwohigh-skillworkerstospend

amonthdoingthedesignwork,andtenlow-skillworkerstospendayearactually

producingthepiece.ImportingaChinese-madewidgetthenresemblestheimmigrationof

twohigh-skillChineseworkerforamonth,andtheimmigrationoftenlow-skillChinese

workersforayear.Immigrationisindeedliketrade,exceptthatinsteadofimportingthe

finishedwidget,weareimportingtherawlaborthatcanmanufacturethatwidget

domestically.

Theaccumulatedknowledgefromdecadesofresearchimpliesthatinternational

trade,onnet,canhaveverybeneficialeconomicimpacts,creatinganinstinctivebias

towardsviewingthistypeof“workermigration”favorably.Wealreadyknowthat

internationaltradeincreasesthesizeoftheeconomicpie.Therefore,theargumentgoes,

immigrationmustalsobebeneficial.Afterall,importingworkersseemsequivalentto

importingwidgets.

Inthe1950sand1960s,WestGermanyandotherEuropeancountries,heavily

influencedbytheeconomisticperspective,recruitedandimportedhundredsofthousands

ofguestworkers,includingmanyfromTurkey.Thoseworkerswereviewedastherobotic

laborinputsthatunderlietheargumentthatimmigration,liketrade,generatesanet

economicbenefitforthereceivingcountry.

*RobertW.ScrivnerProfessorofEconomicsandSocialPolicy,HarvardKennedySchool.Thisessayis

drawsfromthemoredetaileddiscussioninWeWantedWorkers:UnravelingtheImmigrationNarrative(NewYork:Norton,2016).

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However,thepresumedeconomicgainsthatresultfromlookingattheworldusing

themyopiclensofimmigrantsasacollectionofroboticlaborinputscanclashwithreality

whenweviewimmigrationfromamuchbroaderandlongerrunperspective.Overtime,

theimpactofthe“temporary”workerswhowouldcomeinforamonthorayearto

producethosewidgetsdomesticallywasnotsimplythesumoftheircontributiontowidget

production.By2011,Turkishimmigrantsandtheirchildrencomprisedalmost4percentof

theGermanpopulation,andthequestionofhowthisethnicgroupfitintoGermansociety

hadbecomeacentralpolicyconcernthere.ReflectingontheEuropeanexperiencewiththe

millionsofguestworkers,theSwisswriterMaxFrischmadewhatIthinkisthesinglemost

insightfulobservationevermadeaboutimmigrationwhenhequipped:“Wewanted

workers,butwegotpeopleinstead.”

Oneimportantlessonfromimmigrationeconomicsisthatviewingimmigrantsas

purelyacollectionofroboticlaborinputsleadstoaverymisleadingappraisalofwhat

immigrationisabout,andgivesanincompletepictureoftheimpactofimmigration.

Becauseimmigrantsarenotjustworkers,butpeopleaswell,calculatingtheactualimpact

ofimmigrationrequiresthatwetakeintoaccountthatimmigrantsactinparticularways

becausesomeactionsaremorebeneficialthanothers.Thosechoices,inturn,have

repercussionsandunintendedconsequencesthatcanamplifyorweakenthebeneficial

impactofimmigrationgivenbythevalueoftheircontributiontowidgetproduction.

Forinstance,itisself-evidentthatnoteverypersoninasendingcountrywantstobe

animmigrant.Infact,mostpeopleoftenchoosetostayintheirbirthplace,despitethe

sizableeconomicgainstobehadbymovingfromoneplacetoanother.Themoversalmost

certainlydifferinsignificantwaysfromthestayers;theyhavedifferentmotivations,

differentskills,andsoon.Tocalculatetheimpactofimmigrationcorrectly,itisnotjusta

matterofcountingthenumberofbodiesthatfilledtheslotsintheproverbialwidget

factory.Wealsoneedtoworryaboutwhichtypesofpersonsthereceivingcountryended

upattracting.

Oncetheimmigrantsreachtheirdestination,theyhavemanymorechoicestomake.

Acrucialchoicethatallimmigrantsmustmakeiswhethertoassimilatetotheirnew

surroundings.AsEuropehaslearnedinthepastfewdecades,assimilationdoesnothappen

automatically.Therearemanybenefitsfromassimilation—forexample,animmigrantmay

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findbetter-payingjobs.Buttherearealsomanycosts—forexample,animmigranthasto

devotetimetolearningthenewlanguage,ormayhavetogiveuplong-heldculturaltraits

andbeliefs.Immigrantswillprobablychoosetoassimilateonlywhenitisintheirinterest

todoso.

Immigrantswillalsohaveeconomicconsequencesthroughtheircontributionstoor

useofthewelfaresystemsintheindustrializedcountries.Themyopicimmigrant-as-

workerperspectiveignoresthefactthatimmigrantshavelivesoutsidethefactorygate.But

immigrantsgetsick,haveaccidents,losehomes,winlotteries,andaresubjectedtothe

samerandomtwistsoffatethatweallface.And,justlikeus,manywillneedhelpand

assistancewhenbadthingshappen.

ThewelfarestateintheUnitedStatesisdesignedtoprovideassistancenotonlyto

thosewhoaremostneedy,butalsototheworkingpoor.Anditisobviousthatabroader

perspectiveofimmigration—onethatviewsimmigrantsassomethingmorethanrobotic

workers—impliesthattheimpactofimmigrationonwelfareexpenditureswilldependon

whotheimmigrantsare.Ifthepeoplewhochoosetomigratearehigh-skill,immigration

willbenefitthefiscalbottomline;theimmigrantswilladdlittletothecostofmaintaining

thewelfarestateandwillsharetheburdenoffundingit,includinghelpingpayforthe

substantialcostsresultingfromanagingnativepopulation.Butiftheimmigrantsarelow-

skill,immigrationcouldincreasethefiscalburdenfornatives.

Inshort,therearecrucialdifferencesbetweenanevaluationofimmigrationthat

reliesontheimmigrants-as-workersmetaphorandonethattakesthebroaderperspective

thatimmigrantsarepeople.Butthereareimportantsimilaritiesaswell.Ineithercase,

immigrantsincreasethesizeoftheworkforce,andthis“laborsupplyshock”changes

conditionsinthelabormarket.Mostobviously,anincreaseinthenumberofpeoplewho

candoaparticulartypeofworkwilllikelyreducethewagethatemployersneedtoofferto

peoplelookingforthatwork.Atthesametime,however,otherpeoplewillgain—afterall,

lowerwagesfortheworkerstypicallymeanhigherprofitsfortheemployers.Intheend,

immigrationwillalmostcertainlyimprovetheeconomicwellbeingofsomeAmericans,but

otherAmericanswillbeworseoff.

MuchofmyevolutioninhowIthinkaboutimmigrationhasresultedfromattempts

toincorporateMaxFrisch’sinsightintomyacademicwork.Butthereisalsoasecondfactor

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thatinfluencedmythinking,andparticularlyaffectedhowIreadandinterpretthe

voluminousliteratureontheeconomicimpactofimmigration.PaulCollier,arenowned

BritishpublicintellectualandaprofessoratOxfordUniversity,publishedabookin2013

entitledExodus:HowMigrationisChangingOurWorld.Collier,whoseworkmainly

addressesquestionsindevelopmenteconomics,hadneverhimselfdirectlyworkedon

immigrationissuesinhisacademicwork.InExodus,Collierarguedthatthepresumedlarge

benefitsthatimmigrationmayimpartonreceivingcountriescanbegreatlyreducedasthe

numberofimmigrantsincreasessubstantiallyandthemigrationflowcontinues

indefinitely.

Regardlessofhowonefeelsaboutthisparticularconclusion,Ifounditparticularly

insightfultoreadCollier’soverallperceptionofthesocialscienceliteraturethathe

reviewedashewroteExodus:1

Arabidcollectionofxenophobesandracistswhoarehostiletoimmigrants

losenoopportunitytoarguethatmigrationisbadforindigenouspopulations.

Understandably,thishastriggeredareaction:desperatenottogivesuccorto

thesegroups,socialscientistshavestrainedeverymuscletoshowthat

migrationisgoodforeveryone.”

Thisisasdamningastatementaboutthevalueofsocialscienceresearchon

immigration—andprobablyaboutthevalueofsocialscienceresearchonanypoliticized

andcontentiouspolicyissue—asonecanfind.AsfarasIknow,Collieristhefirst

distinguishedacademictoacknowledgepubliclythatsocialscientistshaveconstructedan

intricatenarrativewherethemeasuredimpactofimmigrationmustbeshowntobe“good

foreveryone.”

Ihavelonghadagnawingsuspicionthatalotofthesocialscienceresearch—

particularlyoutsideeconomics,butcertainlynotexclusivelyso—wasideologically

motivated.Muchoftheacademicresearchwasbeingcensoredorfilteredtopresentthe

1PaulCollier,Exodus:HowMigrationisChangingOurWorld.NewYork:OxfordUniversityPress,

2013,pp.25-26.Emphasisadded.

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evidenceinawaythatwouldexaggeratethebenefitsfromimmigrationandminimizethe

costs.Thespinwasoftenverysubtle,butitcouldbedetected,asCollierdid,ifonebothered

tolook.

Byemphasizingtheeconomisticperspective,forexample,muchoftheexisting

researchignorestheimplicationsofthemanydecisionspotentialimmigrantsmustmake,

includingwhetherornottomigrate,whetherornottoassimilate,andsoon.Andmanyof

thosedecisionscouldeasilyshifttheemphasisawayfromthenotionthatimmigrationis

“goodforeveryone.”Similarly,muchofwhatwethinkweknowabouttheeconomicimpact

ofimmigrationisdrivenbyassumptionsthataremadetosimplifytheconceptualmodelor

theempiricalanalysis.Needlesstosay,assumptionsdonotcomeoutofthinairandthey

matter.Finally,thetypicalstudyoftheeconomicimpactofimmigrationthatusesan

underlyingeconomicmodeltoframethequestionoftenproducesmanyinsights.Someof

thoseinsights,however,detractfromthenarrativethatCollierdetected,andthoseare

oftenhiddenawayintheatticofinconvenienttruths.

Thisessayreviewssomeofthelessonslearnedbytheavailableevidenceonthe

economicimpactofimmigration.Insteadofleadingtotheclaimthatimmigrationis“good

foreveryone,”thebroaderandmorerealisticapproachteachesusthatalthough

immigrationmaybegoodforsome,itisnotnecessarilygoodforall.Liketrade,

immigrationproduceswinnersandlosers.Unliketrade,becauseimmigrationinvolvesthe

movementofhumanbeings,theimplicationsofMaxFrisch’sinsightmayeasilyreduce,,and

perhapsevenreverse,theneteconomicgainsthatsuchflowscangenerateforareceiving

country.Infact,itmaywellbethatimmigrationleadstolittleincreaseintheeconomicpie,

buttoasubstantialchangeinhowthepieissplit.Asaresult,itmaybemoreusefultothink

ofimmigrationnotintermsofeconomicefficiency,butassimplyaredistributivesocial

policy.

1.Economicassimilation

Mostdiscussionsofeconomicassimilationpresumethatitisadesirableoutcome—

atleastfromthepointofviewoftheUnitedStates.Itmightseemsillytoevenponder

whetherweshouldthinkofassimilationasapositivedevelopment,butthequestionisnot

asfar-fetchedasitseems.Forinstance,oneoften-heardargumentinfavorofimmigration

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isthat“immigrantsdojobsthatnativesdon'twanttodo.”Ifthegainsfromimmigration

accruefromthisdivisionoflabor,itisfarfromclearthatassimilationbenefitsnatives.

Afterall,ifimmigrantseventuallybecomejustlike“us,”whowilldothejobsthat“we”do

notwanttodo?

Theproblemwiththisapproachisthatitviewsassimilationfromtheeconomistic

perspectiveofcostsandbenefits.Theconceptofeconomicassimilationisobviouslyfar

narrowerthantheculturalandsocialintegrationthatreallyliesatthecoreofthedebate.

TheimmigrationdebateinEurope,forexample,revolvesaroundtheperceivedpresenceof

largeunassimilatedgroupsintheirsociety.Assimilationisnotsimply,andperhapseven

mainly,aneconomicphenomenon.However,economicassimilationistiedtogether—and

probablygoestogether—withotherformsofintegration.

Themainlessonfromtheexistingevidenceoneconomicassimilationisobvious:

Immigrants,likeeveryoneelse,respondtoincentives.Iftheimmigrantsfinditprofitableto

assimilate,theywilltakeactionsthatleadtoassimilation.Iftheimmigrantsfindit

worthwhiletoremainagroupapart,thattoomighthappen.Asaresult,itshouldnotbe

surprisingthatassimilationfluctuatesovertimeaseconomic,cultural,andpolitical

conditionschange.

Figure1showsthewagegrowthexperiencedbyaspecificimmigrantwaveover

time—relativetothegrowthofcomparablyagednatives.Ineffect,itillustrateshowfast

Figure'1.'Trends'in'economic'assimilation'

!Source:!Adapted!from!George!J.!Borjas,!Immigration!Economics!(Cambridge,!MA:!Harvard!University!Press,!2014),!p.!46.!

!

!5#

0#

5#

10#

15#

20#

0# 5# 10# 15# 20# 25# 30#

Percen

t'rate'of'wage'catch.up

'

Years'since'migra5on'

1965-69 arrivals

1985-89 arrivals

1995-99 arrivals

1955-59 arrivals

1975-79 arrivals

1935-39 arrivals

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theearningsofimmigrantsarecatchinguptotheearningsofnatives.Itiscertainlythecase

thattheeconomicperformanceoftheimmigrantswhoarrivedbefore1980improved

dramatically.Theirearningsgrewbyaround10percentagepointsinthefirstdecade,and

by15to20percentagepointsafter30years.

Buttheassimilationoutlookisfarlessoptimisticformorerecentwaves.The

earningsoftheimmigrantswhoarrivedinthelate1980sgrewbyonly5percentagepoints

inthefirst10years,anddidnotimproveafterthat.Mostdisturbing,theearningsofthe

immigrantswhoarrivedinthelate1990sdidnotgrowatallintheirfirstdecade.Inshort,

thereseemstohavebeenadramaticslowdownineconomicassimilation.

PartoftheslowdownisrelatedtotheriseoflargeethnicenclavesintheUnited

States.Thelogicisobvious.ImmigrantswhoarriveintheUnitedStatesandfindfew

compatriotswithwhomtheycaninteracthaveastrongerincentivetoacquiretheskills

necessaryforabroaderrangeofsocialandeconomicexchanges,suchasbecomingEnglish

proficient.Incontrast,immigrantswhoenterthecountryandfindalargeandwelcoming

ethnicenclavehavelessincentivetoengageinthosetypesofcostlyinvestmentsbecause

theyalreadyhavealargeaudiencethatvaluestheirpre-existingskills.Theavailabledata,

infact,showthatassimilationratesaresmallerforimmigrantgroupsthathavealarge

ethniccommunityawaitingtheirarrival.

Itmaybetemptingtodismissthemodernevidenceontheassimilationslowdown

bygoingbacktothehistoricalrecordandassertingthattheimmigrantswhoenteredthe

countryattheturnofthe20thcenturyexperiencedremarkableassimilation,andwhy

shouldthepresentbeanydifferent.Althoughitiswidelybelievedthattheeconomic

performanceofthoseimmigrantsimproveddramaticallyduringtheirlifetime,arecent

reexaminationshowsthatthewidespreadconsensusiswrong.Thepublicreleaseofthe

actualcensusmanuscriptscompiledatthetimeallowsmodernhistorianstotrackspecific

personsfromcensustocensus.Thisperson-leveltrackingletsusinspectthecareerpathof

eachimmigrantandcompareittothenativepath.

Thetrackingexerciseturnsthewidespreadperceptionofrapidimprovementonits

head.AseconomichistoriansRanAbramitzky,LeahPlattBoustan,andKatharineEriksson

conclude:“ThenotionthatEuropeanimmigrantsconvergedwithnativesafterspending10

to15yearsintheUSis…exaggerated,aswefindthatinitialimmigrant-nativeoccupational

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gapspersistedovertime.”2Inshort,thehistoricalexperienceprovidessurprisinglylittle

evidenceofanyeconomicimprovementfortheEllisIslandimmigrantsduringtheirlifetime.

Theavailableevidence,therefore,suggestsanintriguingmessage.Itseemsthatonly

theimmigrantswhoenteredtheUnitedStatesinbetweenthetwomassmigrationsthat

serveasbookendstothe20thcenturyexperiencedsubstantialimprovementduringtheir

lifetime.Notably,theintervalbetweenthosetwomigrationshappenstobetheperiod

whenrestrictiveimmigrationpolicies,combinedwiththeeconomicdebacleoftheGreat

DepressionandthepoliticalupheavalofWorldWarII,greatlylimitedthenumberof

immigrants.Afascinatingquestionremainsopenforfuturedebate:Coulditbethatthe

limitedimmigrationduringthathiatuswaspartlyresponsiblefortheeconomicflourishing

experiencedbytheimmigrantswhocameinthoseyears?

2.TheLaborMarketImpact

Immigrantsdojobsthatnativesdonotwanttodo,andhavelittleimpactonnative

jobopportunitiesasaresult.Anyonewhofollowstheimmigrationdebatesurelynoticed

thisrefraingettinglouderinthepastdecade,asthepoliticalclassconsideredvarious

proposalsthatwouldgrantamnestytoundocumentedworkersandsubstantiallyincrease

thenumberofvisasinmanycategories.

Althougheveryoneknowsthatthepriceofgasgoesdownwhenthesupplyofoil

goesup,manyseemtobelievethatthelawsofsupplyanddemanddonotapplyinthe

immigrationcontext.Buttherearesomeinconvenientfactsthattendtobeoverlookedin

therushtotheconsensusthatimmigrationisgoodforeveryone.

AspartofanenforcementinitiativebytheBushadministrationinSeptember2006,

immigrationagentsraidedachicken-processingplantintheruralcommunityofStillmore,

Georgia.TheWallStreetJournalsentateamofreporterstoinvestigate.3Theteamgathered

evidencethatclearlyillustrateshowlabormarketsrespondtolaborsupplyshocks:

2RanAbramitzky,LeahPlattBoustan,andKatherineEriksson,“ANationofImmigrants:Assimilation

andEconomicOutcomesintheAgeofMassMigration,”JournalofPoliticalEconomy122(June2014),pp.469-470.

3EvanPérezandCoreyDade,“ReversalofFortune:AnImmigrationRaidAidsBlacks—ForaTime.”WallStreetJournal,January17,2007.

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AfterawaveofraidsbyfederalimmigrationagentsonLaborDayweekend,a

localchicken-processingcompanycalledCriderInc.lost75%ofitsmostly

Hispanic900-memberworkforce.Thecrackdownthreatenedtocripplethe

economicanchorofthisfadingruraltown.ButforlocalAfrican-Americans,

thedramaticappearanceoffederalagentspresentedanunexpected

opportunity.Cridersuddenlyraisedpayattheplant.Anadvertisementinthe

weeklyForest-Bladenewspaperblared“IncreasedWages”atCrider,starting

at$7to$9anhour—morethanadollarabovewhatthecompanyhadpaid

manyimmigrantworkers.

Crider’sreactiontothe75percentcutinitslaborsupplydemonstratethecommon

senseunderlyingthelawsofsupplyanddemandfarbetterthanthemathematicalmodels

ofeconomistsevercould.Facedwiththepossibilityofbeingunabletooperatetheplant

andsufferingsubstantiallosses,Criderdidwhatanyprofit-maximizingfirmwoulddo:

Attractworkersbyofferingahigherwage.

Indoingso,Criderlearnedtheobviouslessonimpliedbyeconomictheory.Itisnotthat

“immigrantsdojobsthatnativesdon'twanttodo.”Itisinsteadthat“immigrantsdojobs

thatnativesdon’twanttodoatthegoingwage.”

Figure'1.'A'firm’s'response'to'a'cut'in'labor'supply'!

!!!!!!!!!!!!!!!Source:!Evan!Pérez!and!Corey!Dade,!“Reversal!of!Fortune:!An!Immigration!Raid!Aids!Blacks—For!a!Time,”!Wall$Street$Journal,!January!17,!2007.!

!

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Hundredsofpublishedstudiesattempttomeasurethelabormarketimpactof

immigration,withsomeclaimingthatimmigrationhaslittleimpactonnativewages,while

othersclaimingthattheeffectissizable.Itiseasytodemonstratehowonecangenerate

bothsetsofresultsfromthesameunderlyingdatainthecontextoftheMarielsupplyshock.

OnApril20,1980,FidelCastrodeclaredthatCubanswishingtomovetotheUnitedStates

couldleavefromtheportofMariel.ThefirstMarielitosarrivedonApril23.ByJune3,over

100,000Cubanshadmigrated,andMiami’sworkforcehadgrownbyaround8percent.We

candeterminetheimpactofthissupplyshockbylookingatlabormarketconditionsin

Miamijustbeforeandaftertheevent.DavidCard’s(1990)originalstudyconcludedthat

suchacomparisonimpliedthattheMarielitoshadnoimpactontheaveragewageof

workersinMiami.4

Almosttwo-thirdsoftherefugeeswerehighschooldropouts,sothatthenumberof

highschooldropoutsintheMiamiareaincreasedbyanastounding20percentinamatter

ofweeks.Thisobviouslysuggeststhatagoodplacetostartwouldbetolookattheearnings

ofhighschooldropouts.Remarkably,thattrivialcomparisonwasnotreportedinDavid

Card’soriginalstudyoftheMarielsupplyshock.

4DavidCard,“TheImpactoftheMarielBoatliftontheMiamiLaborMarket,”IndustrialandLabor

RelationsReview43(January1990):245-257.

Figure2.DidMarielaffecttheearningsofhighschooldropouts?

A.Non-Hispanicmenaged25-59 B.Allnon-Cubanworkersaged16-61

4.8

5

5.2

5.4

5.6

5.8

1972 1976 1980 1984 1988 1992 1996 2000 2004

Logweeklywage

Year

Outside Miami

Miami

4.7

4.9

5.1

5.3

5.5

1972 1976 1980 1984 1988 1992 1996 2000 2004

Logweeklywage

Year

Outside Miami

Miami

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Whileworkingonmylatestbook,WeWantedWorkers,Ibecameinterestedinthe

Marielcontext,decidedtolookatthedatamyself,andspecificallyfocusonthelow-skill

workersmostlikelytobeaffected.PanelAofFigure2showswhathappenedtothe

earningsofprime-agenon-Hispanicmenbeforeandafter1980(withtheshadedarea

givingthemarginoferror).Itisobviousthattheearningsoflow-skillworkersinMiami

tookadramaticnosediveafter1980,andittookadecadefortheirearningstofullyrecover.

AsIsuggestedearlier,thereisagreatdealofanalytical“creativity”inimmigration

research,andmydiscoveryofthetrendinPanelAquicklyledtore-examinationsthatspun

thedatainadifferentway.TheMarielcontext,infact,presentsanidealopportunityto

showhowitiscrucialtoexaminethe“nutsandbolts”ofwhatresearchersactuallydo

beforereachingaconclusionaboutaquestionoffundamentalimportanceintheeconomics

ofimmigration.

PanelBofFigure2usesthesameunderlyingdatafromtheCurrentPopulation

Surveys(CPS)torecalculatethewagetrends,butlooksatwhathappenedtoadifferent

groupofworkers.ThisparticulardatamanipulationindicatesthatMarieldidnothaveany

impactontheearningsoflow-skillworkers.Manyparticipantsintheimmigrationdebate

willpreferwhatPanelBsays.Butbeforejumpingtoconclusionsbasedonwhatagraph

lookslike,itiscrucialtostopandthinkaboutwhatisgoingon.

OnedistinctionbetweenthetwopanelsofFigure2isthattheright-hand-sidepanel

looksatthetrendintheaveragewageofmenandwomen,whichseemsfineexceptforthe

factthatmanywomenenteredthelabormarketinthe1980s.Asaresult,thesample

compositionischanginginwaysthatneedtobeaccountedfor,particularlybecausetherise

infemalelaborforceparticipationinMiamiwasfarslowerthantheriseoutsideMiami.

Similarly,PanelBincludesnon-CubanHispanicsinthecalculationofwagetrends.

ThisalsoseemsfineuntilonerealizesthatabigchunkofthoseadditionalHispanicswere

immigrantswhoenteredthecountryafter1980.Unfortunately,theCPSdidnotprovide

anyinformationoncountryofbirthatthetime,sotheresearcherneedstoapproximatethe

populationof“natives.”Itturnsoutthat52percentofthenon-CubanHispanicsaddedin

PanelBareimmigrantswhoarrivedafter1980.Addingthesepost-Marielimmigrantsto

thecalculationagainchangesthesamplecomposition,andcontaminatespost-1980wage

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trends.Justimagine,forexample,howthewagetrendina“placebo”citysuchasLos

AngeleswouldlookcomparedtoMiamiifoneincludedtheverylargenumberofMexican

immigrantswhosettledinSouthernCaliforniaduringthe1980s.

Finally,PanelBincludesworkersoutsidetheir“primeage,”particularlythosewho

are16to18yearsold.Thisinclusionisalsoproblematic.Almostalloftheseteenage

workersarehighschoolstudents,employedinpart-timejobs,andclassifiedas“highschool

dropouts”becausetheydonotyethaveahighschooldiploma.Therearemillionsofsuch

students(ourteenagesonsanddaughtersamongthem),andtheirpresenceinthe

calculationofthewagetrendsmakesthecalculationalmostmeaningless.Intheend,it

seemsthatwhatoneconcludesaboutthewageimpactofMarieldependsentirelyonwhere

onelooks.

Inmyview,thereislittledoubtthatimmigrantsaffectthelabormarket

opportunitiesofnatives.A10percentincreaseinthesupplyoflaborinaparticularskill

groupprobablylowersthewageofthatgroupbyatleast3percentintheshortrun.The

temptationtoplaywithassumptionsandmanipulatethedata,however,isparticularly

strongwhenexaminingthisverycontentiousissue,sothatthereportedeffectsoften

dependontheassumptionsmadeandthestatisticalmanipulationsused.Theconflicting

evidence,however,suggestsonemoralthatcanbehelpfulwheninterpretingcompeting

claims:Themorethatoneaggregatesgroupsintheworkforce,themorethatone“hides

away”thespecificgroupofworkershurtbyimmigration,andthelesslikelyoneistofind

thatimmigrantshaveanadverseeffectonnatives.

3.Theimmigrationsurplus

Receivingcountriestypicallywelcomeimmigrantsforasimplereason:they

perceivethatimmigrationgeneratesanoverallbenefitfornatives.Ifthisperceptionwere

different,ifitwerebelievedthatimmigrantsmadenativesworseoff,Isuspectthatthe

opendoorswouldquicklyclose.

Toaccuratelymeasuretheeconomicgainsfromimmigration,oneneedstolistall

thepossiblechannelsthroughwhichimmigrationtransformstheeconomy:how

immigrationchangeswages,prices,andprofits;howimmigrationchangesthenumberof

jobsineachsector;hownativeworkersandnative-ownedfirmsrespond;andonandon.

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Thisexhaustivecalculationhasneverbeendone.Instead,thetypicalestimateofthe

gainsreliesonamodelofahypotheticaleconomythathelpsvisualizewhathappenswhen

thelabormarketisfloodedbymillionsofnewworkers,lettingusrecordtherippleeffects

ofimmigrationonallsectors.Putbluntly,allestimatesoftheeconomicbenefitsfrom

immigrationcomefromaneconomistwritingdownafewequationsthatpurportedly

describehowtheeconomyworksandthenplugginginsomenumbers.

Oneimportantlessonfromthistheory-basedexerciseisthatthetextbookmodelof

thelabormarket—themodelthatdescribesthecommon-senselawsofsupplyand

demand—indeedpredictsthatimmigrantparticipationintheproductivelifeofourcountry

increasestheaggregatewealthofthenativepopulation.Thisincreaseintheeconomicpie

accruingtonativesisknownasthe“immigrationsurplus.”Inshort,thereareeconomic

incentivesforkeepingthedooropen.

However,asTable1shows,thatmodelalsopredictsthatthenetgainsfornatives

aremodest—notinthetrillionsofdollars,noteveninthehundredsofbillions,butonly

around$50billionannually.Andthetheory-basedexerciserevealsthatifoneiswillingto

paradethismodestgaininpolicydiscussions,thenonemustalsobewillingtoparadeother,

lesswelcome,implicationsofthesamecalculation:Immigrationisresponsibleforahuge

Table 1. The short-run immigration surplus, 2015

Billions of dollars

Immigration surplus 50.2

Loss to native workers 515.7

Gain to native firms 565.9

Total increase in GDP 2,104.0

Payments to immigrants 2,053.8

Source: George J. Borjas, We Wanted Workers: Unraveling the

Immigration Narrative, New York: Norton, 2016, p. 158.

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redistributionofwealth,totalingaroundhalf-a-trilliondollars,fromnativeworkerswho

competewithimmigrantstothosenativeswhouseoremployimmigrantlabor.Itistelling

thatmanydiscussionsoftheimmigrationsurplusoftenchoosetooverlookthesubstantial

distributionalcostassociatedwithgeneratingevena$50billionsurplus.

Notethattheimmigrationsurplus,whichmeasurestheaggregategainsaccruingto

natives,isconceptuallydifferentfromthetotalincreaseinGDPobservedinthereceiving

country.AsTable1shows,immigrationhasincreasedGDPintheUnitedStatesbyover$2

trillion.Almostallofthisincrease,however,goestotheimmigrantsthemselves—

immigrants,likeus,donotworkforfree.Almostbydefinition,itislikelythatimmigrants

havegainedsubstantiallyfromimmigration(otherwisetheywouldreturntothesource

countries).

Iwouldaddahugecaveattothe$50billionestimateoftheimmigrationsurplus.

Thecalculationignoresalltheexternalitiesthatimmigrantscreatealongtheway.The

externalitiesarebothgood--theentryofextremelyhigh-skillimmigrantssurelyaccelerates

innovation,makesusmoreproductive,andhasabeneficialimpactoneconomicgrowth.

Andbad--theentryofsomehigh-skillimmigrants,suchasthosewhoenrolledinflight

schoolsandlearnedtoflyplanesandthenflewthemonSeptember11,2001,canmakeus

allmuchworseoff.Theredoesnotexistasinglecrediblestudythatevenattemptsto

quantifythevalueofthemanypositiveandnegativeexternalities.So,intheend,allwe

reallyhavetogoonisanestimatedsurplusof$50billionintheshortrun.

4.Thefiscalimpact

Butbeforeconcludingthatimmigration,liketrade,isanetplustothereceiving

country’seconomicpie,weneedtocontrastthe$50billionsurpluswithanumberthat

measuresthefiscalimpactofimmigration.Afterall,immigrantsarenotwidgets.Theywill

contributetothefundingofthewelfarestatethroughthetaxestheypay,andtheyincrease

thecostofthewelfarestatebecausetheywillreceivesomeservices.Thefiscalimpact

woulddeterminewhetherthetaxesthatimmigrantspayaresufficientlylargetocoverthe

expenditurestheytrigger.

Thequestionofwhetherimmigrantsusewelfaremoreorlessoftenthannatives

populationis,needlesstosay,controversial.Andtherearemanyconflictinganswerstothis

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question.Giventhisdisparity,itisenlighteningtoillustrate—inaverysimpleway—how

onecanusethesamepubliclyavailabledatatoreachverydifferentconclusions.The

CurrentPopulationSurvey(CPS)isthepremiermonthlysurveyoftheAmerican

populationandiscollectedbytheCensusBureau.Itisthesurveyusedtocalculatethe

officialunemploymentratethatmakesnewsuponitsreleaseeveryfirstFridayofthe

month.

Tokeepthingssimple,being“onwelfare”willmeanreceivingbenefitsfromanyone

ofthreeprograms:Medicaid,foodstamps,orcashbenefits.Thereareobviouslymanyother

programsthatcouldbethoughtofasbeingsometypeofwelfare,rangingfrompublic

housingtofreeschoollunches.Thefractionofbothnativesandimmigrants“onwelfare”

wouldobviouslybehigherifoneweretoincludetheseadditionalprograms,butitiseasy

toillustratethemainpointbyconcentratingonthethreemainprogramsthatmakeupthe

safetynet.Weareinterestedinfindingoutifthefractionofimmigrantsonwelfareis

higher,lower,orthesameasthefractionofnativesonwelfare.

Thetwo“curtains”ofFigure1showthe20-yeartrendsinwelfareusecalculated

fromtheCPS,butIwilltemporarilyplayatrickonthereaderbynotrevealingthe

differencebetweenthetwocurtains.LetmeemphasizethatIamusingthesameCPSdata

tocalculatethetrendsinbothcurtains.Nevertheless,itisobviousthatifonelooksat

Figure1.Trendsinwelfareuse,1994-2015

Source:Author’scalculationsfromtheCurrentPopulationSurveys,1994-2015,

0

5

10

15

20

25

30

35

40

1990 1995 2000 2005 2010 2015

Percen

treceivingassistance

Year

Curtain #1

Natives

Immigrants

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015

Percen

treceivingassistance

Year

Curtain #2

Natives

Immigrants

17

Curtain#1,immigrantsareonwelfarefarmoreoftenthannatives,andincreasinglyso.But

ifonelooksatCurtain#2,thewelfareuseofthetwogroupsisessentiallythesame.

Letmereemphasize:Bothcurtainsuseexactlythesamedata.Sowhatisthe

differencebetweenthetwocurtains?Italldependsonthefineprint.InCurtain#1,Iam

reportingwelfareusebyhouseholds—whichisthewayinwhichwelfareuseismostoften

analyzed.Mostwelfareprograms,afterall,areallocatedatthehouseholdlevel.For

example,itisthepresenceofminorchildrenthatmightentitleasinglemothertoreceive

anincomegrantforthefamily.InCurtain#1,theCPSdataaremanipulatedtodetermineif

anyoneinthehouseholdreceivesMedicaid,foodstamps,orcash.

Animmigranthouseholdisonewheretheheadofthehouseholdisforeign-born,

andanativehouseholdisonewheretheheadisnative-born.Itisevidentthathouseholds

headedbyanimmigranthaveparticularlyhighratesofwelfareuse,andthatthegap

betweenimmigrantandnativehouseholdsincreasedovertime.By2015,37percentof

immigranthouseholdswereonwelfareascomparedto24percentofnativehouseholds.

ButthetrendsinCurtain#2seemtocontradictthisfact.Inthisalternativescenario,

Imanipulatedthedatasothattheframeofreferenceisasingleperson,ratherthana

household.Inotherwords,therelevantquestionbecomes:Didaparticularindividual

receivewelfare?Ifoneweretocalculatethefractionofpeoplewhoreceiveassistance,

thereislittledifferencebetweenimmigrantsandnatives.About25percentofbothgroups

receivedwelfarein2015.

Sowhatexactlyisgoingon?Iintroducedasubtle“trick”increatingCurtain#2.

Supposeayoung,singleimmigrantwomanarrivesintheUnitedStates.Afterafewyearsin

thecountry,shebecomesasinglemotherandhastwochildren.InCurtain#1,thisthree-

persongroupingwouldbeclassifiedasanimmigranthousehold.Ifthemother’sincome

weresufficientlylow,thechildren(andperhapseventhemotherherself)wouldqualifyfor

sometypeofassistance.Thehouseholdwouldenterthetallyonce,asanimmigrant

householdonwelfare.

InCurtain#2,thisthree-personhouseholdnowentersthetallythreedifferenttimes.

IfthishouseholdwereonMedicaid,thetallywouldrecordoneimmigrantpersonon

welfareandtwonativepersonsonwelfare.Andthereinliesthetrick:Becausethechildren

werebornintheUnitedStates,theyenterthecost-benefitcalculationonthenativesideof

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theledger.Asthetwocurtainsillustrate,thistrickmakesahugedifferenceinwhat

conclusionwedrawfromthesamedata.Toemphasizeyetagain,thefineprintmatters!

InSeptember2016,theNationalAcademyofSciencespublisheda500-pagereport

thatprovidesmanyalternativeestimatesofthefiscalimpactofimmigration,bothinthe

shortrunandinthelongrun.5Theshortrunimpactiscalculatedbycomparingthecostof

providingpublicservicestoimmigrantswiththetaxesthatthoseimmigrantspayina

particularyear.Thereportunambiguouslyconcludedthat,onayear-to-yearbasis,

immigrantsandtheirdependentchildrencreateafiscalburden.(NotethattheNational

Academyimplicitlyadoptedtheimmigrant-household-as-a-unitmethod).

Infact,theNationalAcademyusedninealternativescenariostocalculatetheshort-

runfiscalburden(seeTables8-2and9-6inthereport).Thesescenariosreportaburden

rangingfrom$43billionto$299billionannually.Inshort,thesocialexpenditurestriggered

byimmigrantsexceedthetaxestheypaybyatleast$43billionayearandperhapsbyas

muchas$299billion.Thedataaresounambiguousthatitiseasytosummarizewhatthe

NationalAcademycalculationsteachus.Onayear-to-yearbasis,thereisnodoubtthatthe

taxesthatimmigrantpaydonotcoverthepublicexpenditurestheytrigger.Andthe

shortfallseemstoexceed$50billionannually.

TheNationalAcademyalsocalculatedthelong-runfiscalimpact,takingintoaccount

thetaxesandexpendituresofimmigrantsandtheirdescendantsovera75-yearperiod.

Thislong-runcalculationallowsforthepossibilitythatimmigrantsmighthelpfiscally,as

thenativepopulationisagingandthereisnotenoughmoneytofundtheliabilitiesinSocial

SecurityandMedicareunlesswedrasticallyraisetaxesorcutbenefits.Immigrationbrings

innewtaxpayerswhocanhelpfundsomeofthoseliabilitiesinthefuture.

AstheNationalAcademyreportnotes,however,thebottomlineofthelong-run

calculationdependsentirelyontheassumptionsmade.Itiseasytogenerateeitheravery

positivelong-runfiscalimpactoraverynegativeonebymakingdifferentassumptions.

Therearetwodistinctassumptionsthatdrivetheconclusion.Thefirstishowtoallocate

expendituresonpublicgoodsbetweenimmigrantsandnatives.Althoughitmakessenseto

5FrancineD.BlauandChristopherMackie,eds.TheEconomicandFiscalConsequencesofImmigration,

Washington,DC:NationalAcademyPress,2016.

19

assumethatthecostofpublicgoods,suchaspoliceprotectionornationaldefense,is

unchangedifweadmitonemoreimmigrant,itmakesfarlesssensetoassumethatthecost

ofpublicgoodsisunchangedifweadmitover40millionimmigrants.Similarly,anylong-

runscenariomustmakeassumptionsaboutthefuturepathoftaxesandgovernment

expenditures,andtheavailablemenuofassumptionsaboutthefutureistemptingto

anyonewishingtoreachaspecificconclusionaboutthelong-runfiscalimpact.

AstheNationalAcademyshowed,thelong-runfiscalimpactoftheaverage

immigrantispositiveonlyifimmigrantsdonotaffectthecostofpublicgoodsand

weassumethatfuturetaxratesandbenefitpaymentswillfollowtheprojectionsmadeby

theobviouslyinfallibleCongressionalBudgetOffice(seeTable8-12inthereport).Ifone

getsridofeitherofthoseassumptions,thepositivelong-termimpactofanimmigrant(and

descendants)contributinganetof+$58,000overthenext75yearsbecomesalossaslarge

as-$119,000.

Assumptionsmatter,anddifferentassumptionsleadtowildlydifferentanswers.It

iseasytogenerateaverylargefiscalburdenbychargingimmigrantsforthecostofthe

publicgoodstheyreceive.Anditisequallyeasytogeneratealargefiscalgainbyplaying

aroundwiththeassumptionsaboutfuturetaxesandexpenditures.

5.ImplicationsforPolicy

20

Socialscientistsingeneral,andeconomistsinparticular,havedoneaverygoodjob

ofconvincingmanypeoplethatthemathematicalmodelswebuildandtheempirical

findingswegeneratecanbethefoundationfora“scientific”determinationofsocialpolicy.

Putdifferently,ifalltheexpertmodelingandstatisticalanalysissaysthattheworldlooks

likex,thenitmustbethecasethatpolicyyistherightthingtodo.

Ihappentobelievethattheclaimthatmathematicalmodelinganddataanalysiscan

somehowleadtoascientificdeterminationofsocialpolicyissheernonsense.Socialpolicy

wouldnotbescientificallydeterminedeveniftherewereuniversalagreementonthe

underlyingfacts.Ideologyandvaluesmatteraswell.Andthedebateoverpolitically

contentiousissues,suchasimmigration,wouldbefarmorehonestandproductiveifwe

openlyacknowledgedthatobviousrealityratherthanpeddleparticularpolicygoalsasif

theywereimpliedbysomescientificstudy.

Theargumentthatmodelsanddatacansomehowleadtoapurelytechnocratic

determinationofpublicpolicyignoresasimplefactoflife.Governmentsoftenpursuea

particularpolicygoalbecausethey—andthepeoplewhoelectedthem—believethatwhat

theyaredoingistherightthingtodo.

Weallhavedifferentvaluesandperceptionsaboutwhatisright,muchofitcoming

fromourpersonalhistoryandfromtheideologicalcompassthatweusetonavigate

throughlife.Someofusfeelthatweshouldhavemoreimmigrationbecauseofthediversity

thatimmigrantsintroduceintoourculture;andsomepeoplewillgomuchfurtherand

arguethatitisimmoraltodenyanypersontherighttocrossanationalboundaryinsearch

ofabetterlife.Ontheotherside,somewillwanttochangethetypesofimmigrantswe

admit,arguingthatthistypeisbetterinsomesensethanthatothertype;andstillothers

believethatweneedtohaveasubstantialcutinimmigrationbecausetheywantto

preserveparticularthingsaboutthecountryasitisnow.

Let’ssuppose,forexample,thatademocraticallyelectedgovernmentranona

platformthatpromisedtoprotectnativetaxpayersfromtheperceivedfiscalburden

createdbylow-skillimmigration.Thisgovernmentnowcontrolsallthepolicylevers

(includingthecourts)neededtofulfillthepromisetheymade.

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Thegovernmentconsultstheexperts,andalltheexpertsagreeaboutthefiscal

impact.Inparticular,let’sassumethatitistruethatlow-skillimmigrationisafiscalburden,

andthathigh-skillimmigrationeasesthatburden.

Theelectedgovernmentlooksatthesettledscienceandthepolicypathbecomes

obvious:Itisfiscallyirresponsible,andwouldgreatlyannoythegovernment’ssupporters,

toadmitmillionsoflow-skillimmigrantswhowillbecomeafiscalburden,butitmaybe

worthwhiletoadmithigh-skillimmigrantswhohavehighearningsandpayalotoftaxes.

Thegovernmentmightthenproposea“comprehensiveimmigrationreform”thatridsthe

UnitedStatesofthefamilypreferencesystem,andreplacesitwithaskillfilterthat

preventsalllow-skillimmigrantsfromenteringthecountry.

Let’snowsupposeinsteadthatthepoliticianswhogotelectedhadadifferent

mandate.Theyranonaplatformthatpromisedtoalleviateworldpovertybyincreasing

foreignaidandbyallowingmanyoftheworld’spoortomovetotheUnitedStatesto

partakeinthemanyopportunitiesthatourcountryoffers.

Theexpertsstillreportthesameuniversallyagreed-uponfacts:low-skill

immigrantsareafiscalburdenandhigh-skillimmigrantshelpfundthewelfarestate.But

thegovernmentgotelectedonaplatformthatpromisedtoaddresstheissueofworld

poverty—andtospendalotofmoneytodoso.Itiseasytoseethatanimmigrationpolicy

thatwouldadmitmillionsoftheworld’s“poorandhuddledmasses”wouldbeaverylarge

anti-povertyprogramindeed,perfectlyalignedwiththeideologicalbeliefsofthis

governmentanditssupporters.

Doesknowingthefactthatthepoorandhuddledmassescreateafiscalburdenfor

thenativepopulationdeterthedemocraticallyelectedgovernmentfromcarryingoutits

mandate?Theanswerwouldlikelydependonthe“burdenthreshold”thatthegovernment

andthepeoplewerewillingtoaccept.Ifthefiscalburdenpernativehouseholdisonlya

fewhundreddollarsperyear,thepoliticallysensiblepolicymightstillbetheadmissionof

millionsoflow-skillworkersdespitethefactthattheywillbecomeafiscalburden.The

government—anditssupporters—mighthavesecondthoughtsifthefiscalburdenwasin

thetensofthousandsofdollars.Butitisobviousthatideologywilltrumpthefactsforsome

rangeofthefiscalburden.Thisburdenisthepricethatthepeoplewhoareideologically

committedtothereductioninworldpovertyarewillingtopayfor“doinggood.”

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SowhatwouldIdo?MyanswerobviouslydependsonwhatIbelievetheobjectiveof

immigrationpolicytobe.IhappentothinkthatitisagoodthingfortheU.S.topursuea

policythatgenerateseconomicgainsbyadmittingsomehigh-skillimmigrantsandalso

“doesgood”byadmittingsomeofthehuddledmasses.Withinthatframework,thereare

somepolicyshiftsthatwouldleadtopreferableoutcomes.

Letmestartwiththeobvious.Itmakesnosensetotalkaboutchangesinpolicy

unlessourbordersaresecure.Theveryporousbordersthathaveallowedover11million

undocumentedpersonstoentertheUnitedStatesmakelegalimmigrationpolicy,inWoody

Allen’swords,“atravestyofamockeryofasham.”Whatisthepointofcomingupwith

waystoimproveimmigrationpolicyifanyonecanbecomeanimmigrantbycrossingthe

southernborderorbybreakingthetermsofatouristvisa?Anecessaryfirststepissimply

toregaincontrolofthebordersothatchangesinimmigrationpolicymeansomethingonce

again.

Asecureborderwillobviouslyrequirethatwedevotemoreresourcestosecuring

theborder,andwealreadyspendalotofmoneydoingthatwithless-than-stellarresults.

Theundocumentedflowwouldprobablyslowdowndramaticallyifwetookadifferent

tack:let’sseriouslypenalizelaw-breakingemployers.Thiswouldinvolverequiring

employerstouseanalreadyavailableelectronicsystemwheretheycouldeasilycheckthe

visastatusofjobapplicants(aswithE-Verify).Fortunately,wearenotthetypeofcountry

thatwilltrampleonthecivilrightsofundocumentedimmigrantswhentheyaredetected

andapprehended.Butwearecertainlythetypeofcountrythatheavilyfinesandpenalizes

thosefirmsthatbreakthelaw.Sizablefinesandcriminalpenaltieswouldgoalongway

towardsmakingundocumentedimmigrationamoremanageableproblem,andwouldfree

ustodiscussimmigrationpolicyinamoresensibleandrationalway.

Wealsoneedtoviewimmigrationpolicyfromabroaderperspective—notonly

worryingabouthowmanyimmigrantstoacceptandtheformulausedtoselectthelucky

few,butalsoabouthowtoalleviatetheadverseimpactofimmigrationonmanyAmericans.

Thebestpolicyresponsetothelowerwagescausedbyimmigrationisnotnecessarilyto

cutimmigrationaltogether.Aswehaveseen,thereareeconomicgainstobehad.However,

theanswertolowerwagesshouldnotbetojustignorethemortomaintainthecharade

thatimmigrationis“goodforeveryone.”TheTradeAdjustmentAssistanceProgram

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enactedin1974providedaidtoAmericanworkersaffectedbyimports.Perhapsitistime

tosetupacomparableprogramtoassisttheworkersemployedinthoseindustriesand

localitiestargetedbyimmigrants.

Manyagriculturalandservicecompanieshavebenefittedhandsomelyfromthe

employmentoflow-skillimmigrants,anditisabouttimethatthoseexcessprofitsbeused

tocompensatelow-skillAmericansfortheirlossesandtohelpthemtransittonewjobsand

occupations.IfMicrosoftreallycreatesfournewjobsforeveryH-1Bvisagranted,asBill

Gatesclaims,thenMicrosoftisprofitingsubstantiallyfromthatprogramandshouldbe

willingtopaymanythousandsofdollarsforeachofthosecovetedpermits.Thosefunds

couldbeusedtocompensateandretraintheaffectedpersonsinthehigh-techindustry.We

mightbepleasantlysurprisedbyhowmuchmoneyfirmsarewillingtoponyuptoimport

guestworkers.InSingapore,forexample,firmsthatbringinlow-skillserviceworkerspay

amonthlylevyof20to30percentoftheworker’ssalaryforthetemporaryvisa.Putsimply,

immigrationpolicyshouldbegintoincorporatespecifictaxesandsubsidiestoensurethat

thegainsfromimmigrationaremoreevenlydistributed.Buttoevenpartiallycompensate

thelosersfromcurrentpolicy,massiveimmigrationwillrequiremassivenewgovernment

programstosuperviseamassivewealthredistributiontotalinginthetensofbillionsof

dollars.Thereiszerochancethatthefirmsthatprofitfromthewaythingsarewouldgo

alongwiththesetransferswithoutanepicpoliticalstruggle.

Andthosearethe“easy”fixes.Thelinkbetweenimmigrationandthewelfarestate

introducesparticularlythornyissues.Itisworrisomethat,despitealltherestrictionson

immigrantwelfareuse,manyimmigrant-headedhouseholdsreceivesometypeofaid.The

easiestfixistodowhatAustraliaandCanadado—changetheadmissionrulestoselectonly

high-skillapplicants.Anothermightbetofurthertightenthewelfareeligibilityrulesfor

immigrants.Butthistighteningcreatesadditionalproblemsbecauseimmigranthouseholds

oftenqualifyforassistanceduetothepresenceofU.S.-bornchildren,andeffective

eligibilityrequirementsmaywellrequirethatwetreatminorAmericancitizens

differentiallydependingonwheretheirparentswereborn.

Anequallydifficultproblemconcernsthelong-termassimilationprospectsof

immigrantfamilies.Historically,immigrantsmadethedecisiontoassimilatewithoutmuch

governmentencouragement.Thishands-offapproachworkedwellinthepast,whenthe

24

assimilationdecisionwasmadeinaculturalandsocialenvironmentwherethephrase

“meltingpot”wasnotconsideredtobeamicro-aggression.Thecurrentideological

revulsioninmanyquarterstowardstheverynotionofassimilation,andthecontinued

reinforcementofdistinctethnicidentitiesbymanygovernmentprograms,makesthe

hands-offapproachproblematic.

Thinkingaboutimmigrationpolicyintroducesdifficultandinescapabletradeoffs,

andchoosingamongthosetradeoffscannotbedonesolelyonthebasisofthemathematical

modelingandstatisticalanalysisprovidedbyeconomists.Intheend,thepolicychoice

mostlydependsonourvalues,onwhatwebelievetheUnitedStatesisallabout,andon

whatkindofcountrywewantourchildrentolivein.

Intheend,thereisaverysimple(andobvious)wayofsummarizinghowoneshould

thinkabouttheframingofimmigrationpolicy:Whoareyourootingfor?