Does Economics 101 Apply to Immigration?
by Robert VerBruggen, a review of George Borjas' new book Immigration Economics.
The question is central to the immigration debate. If new people come in, do they depress the wages of competing workers here, and if so how much? "But it's 'suprisingly difficult' to demonstrate that this actually happens, according to the famed Harvard labor economist George Borjas. Very good review, need to read the book.
Of course, protectionism 101 still applies. If cheap Chinese sneakers come in, do they depress the profits of competing sneaker producers here? Yes. Does that mean we wall off trade? No, but neither ignore its distributional consequences.
Tuesday, August 12, 2014
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The cultural effects of immigration are probably more important than the economic effects. In the UK there is clear evidence that political corruption is worse in areas with a big immigrant population from politically corrupt countries. Do I as a UK citizen want the UK turned into another Pakistan? Certainly not.
ReplyDeleteRight on the mark again, Ralph! Thank you.
DeleteIf you are worried about culture, we lost that battle long ago in the public schools. That also depends on how you pick your immigrants, not on the number. It's not clear that immigrants who want to come to work and start businesses are going to be less attracted to our culture than natives are.
ReplyDeleteThis is certainly correct. I came from Greece to the US because I was attracted to the values it stands for, and after giving up on the hope of changing the minds of my fellow countrymen. I now live in a neighborhood with a significant Hispanic population and most of the immigrants I know are very entrepreneurial (restaurants, construction companies, landscaping companies) and cynical about the government, having experienced the ills of corruption back home. My feeling is that the immigration of people trying to escape the reality of their home countries provides an antidote to Americans who want to turn the US to those countries. Having said that, it wouldn't hurt if naturalized citizens were asked to learn more about the founding fathers and the ideas that the US was founded on.
DeleteIn the age of globalization, cultures either survive radical changes or are transformed or wiped out. But unfortunately cultural arguments are often used to cover discrimination and intolerance: I remember back in Iran ``the danger of cultural invasion by the western countries'' was a constant, tiring propaganda. It is interesting that extremism in all shapes ultimately converge on methods!
DeleteImmigration again: We are all immigrants! Can't this nonsense be stopped? Anybody recall the culture of the Irish, and the Southern Italians, the Jewish home worker sweatshops in lower Manhattan? The point of this economic system is not to choose winners, but to allow winners to emerge. May it cost the rest of us? Sure. But we've had the advantage of early immigration. Fair, isn't it? Apologies for getting emotional.
ReplyDeleteI agree with Raza and Frank both. Culture is not a static phenomenon- it changes or adapts and perhaps also is enriched with assimilation of immigrants from several different countries.
ReplyDeleteI have not yet read the book, but from his papers till date, it seems Borjas likes to pitch gains for immigrants versus natives. These distributional consequences are important, but Borjas's is often silent on how does this cost compare to the economy wide gains. Also, it does not say anything about how do these gains reflect on long term growth? Any analysis of immigration and its implications for policy is incomplete if it does not use a a general equilibrium or a dynamic perspective.
While he argues that native mathematicians were able to publish less with the influx of soviet mathematicians, does he look at the overall numbers of papers published? Or how did that influence development of mathematics and all other subjects that developed because of its growth?
Immigration is more complex than simply whether immigrants lower wages of native born workers. It depends, just for a start, on whether immigrants are substitutes or complements for native workers, and which ones. Suppose immigrants are low skilled, and therefore drive down the wages of low skilled native born workers. It is easy to find cases where low and high skilled workers are complementary to production, so that a drop in the wages of low skilled workers raises the demand for high skilled workers, thereby raising their wages.
ReplyDelete