The consensus among econmics professionals on immigration

Alex Tabarook has written an open letter on immigration from the economics community:

Immigration is the greatest anti-poverty program ever devised. The American dream is a reality for many immigrants who not only increase their own living standards but who also send billions of dollars of their money back to their families in their home countries—a form of truly effective foreign aid.. America is a generous and open country and these qualities make America a beacon to the world. We should not let exaggerated fears dim that beacon.

Economists from any political background are invited to sign. I agree, of course, and have emailed to say so (though I am far less eminent than many of the economists who have already signed up.)

Personally, I would go further. My sympathies are with Chris Dillow, who argues for free immigration.  He makes this interesting point:

I’m not saying here that immigrants should have rights to welfare benefits. They have a liberty right to live where they like, not a claim right upon our money (ta, Norm).  I suspect most hostility to immigration is based upon the failure to see this distinction.

Here is the text.

Dear President George W. Bush and All Members of Congress:

People from around the world are drawn to America for its promise of freedom and opportunity. That promise has been fulfilled for the tens of millions of immigrants who came here in the twentieth century.

Throughout our history as an immigrant nation, those who are already here worry about the impact of newcomers. Yet, over time, immigrants have become part of a richer America, richer both economically and culturally.

The current debate over immigration is a healthy part of a democratic society, but as economists and other social scientists we are concerned that some of the fundamental economics of immigration are too often obscured by misguided commentary.

Overall, immigration has been a net gain for existing American citizens, though a modest one in proportion to the size of our 13 trillion-dollar economy.

Immigrants do not take American jobs. The American economy can create as many jobs as there are workers willing to work so long as labor markets remain free, flexible and open to all workers on an equal basis.

Immigration in recent decades of low-skilled workers may have lowered the wages of domestic low-skilled workers, but the effect is likely to be small, with estimates of wage reductions for high-school dropouts ranging from eight percent to as little as zero percent.

While a small percentage of native-born Americans may be harmed by immigration, vastly more Americans benefit from the contributions that immigrants make to our economy, including lower consumer prices. As with trade in goods and services, the gains from immigration outweigh the losses. The effect of all immigration on low-skilled workers is very likely positive as many immigrants bring skills, capital and entrepreneurship to the American economy.

Legitimate concerns about the impact of immigration on the poorest Americans should not be addressed by penalizing even poorer immigrants. Instead, we should promote policies, such as improving our education system that enables Americans to be more productive with high-wage skills.

We must not forget that the gains to immigrants from coming to the United States are immense. Immigration is the greatest anti-poverty program ever devised. The American dream is a reality for many immigrants who not only increase their own living standards but who also send billions of dollars of their money back to their families in their home countries—a form of truly effective foreign aid.

America is a generous and open country and these qualities make America a beacon to the world. We should not let exaggerated fears dim that beacon.

10 thoughts on “The consensus among econmics professionals on immigration”

  1. Owen,

    A well-known Danish author once wrote a fable concerning 'hard won consensus'.otherwise known as 'groupthink'. It was entitled 'The Emperor's New Clothes'.

    And opposition to immigration might not arise from failure to make distinctions, but instead from decidedly unprogressive, unfunky attachment to the idea of the nation state – an attachment shared by those Mexicans who recently marched through America's streets waving Mexican flags.

  2. What you are describing is what occurs when “some individuals move from one country to another.” A phenomenon that may be “controlled politically, restricted, encouraged, planned, or accepted.

    What the US is experiencing, on the other hand, is not immigration but Migration. Migration is a “natural phenomenon: it happens, and no one can control it.” Migration is an extreme catastrophe, where instead of assimilating into the culture into which a people moves, (as what happens with immigration) an entire population moves into an area and changes the political, cultural, and economic make up of a country or area. This phenomenon has happened many times throughout history and, and it is at work all over he Western hemisphere today.   Independently of what we may call it; a country in which 25 to 30% of the population identifies with another country, votes and participate in another countries election and remits most of their savings to another economy cannot be called the United States of America.   The immediate economic result of such massive migration is an erosion of the quality of life, an escalation in crime, a diminished life expectancy, literacy rate and infant mortality of our population just to mention quantifiable changes.  

    Notwithstanding that some poor as a whole may benefit from being poor in an environment where poverty is richness as compared as the areas where they originate. In the long run openness to migration results in a disincentive to the needed ethical and political changes in the countries were the migrants originate.   The reason why our politicians are showing no leadership and constantly babble incoherent slogans is due to the fact that very soon; sometime within the next nine years the cost of Medicare-Medicaid and Social Security combined will exceed the revenue from employment taxes that have been used until now to cover for excessive government spending of the last quarter of century. When that event arrives the cost of these services would have to be paid in part with funds from other sources, meaning that Social Security and Medicaid-Medicare will be in competition for money with all other government programs including the military  

    The meaning of this is that future governments would have no choice but to raise taxes or cut services to an elderly population. Unless they can convince a population of minority third world workers to pay increased taxes while receiving less services. The problem with that equation is that low skilled workers pay a smaller percentage of the tax burden while consuming more services. One $80,000 engineer produces more government revenue and uses less government services than four $20,000 agricultural workers.

  3. There is an inverse relationship between third world immigration into Western countries and aid to the third world. The more third world immigrants a developed country lets in the more its population becomes hostile to helping poor countries. Given that immigration can only make a tiny dent on third world poverty, aid is a more sensible option.  A major reason why aid gets a bad name is the World Bank. Most illiterate peasants in developing countries don't have much in common with the technocratic elites in the World Bank. If we got rid of the World Bank and replaced it with small private contractors that followed a KISS policy of development (keep it simply stupid!) we might actually make some significant progress in containing global economic inequality. As it is, the poverty gap just keeps getting wider.

    Owen replies: Thank you for your comment, Mike.  As you might expect, I do not agree with anything you say here.

    First, I am not aware of any systematic analysis of the relationship between immigration and attitudes towards development; but my instinct is that the relationship is the opposite of the one you suggest.  Countries that are more open to immigration and which benefit from greater diversity seem to me to be more likely to embrace the idea that they are part of a global communty to whom they have responsibilities, and there are likely to be strong constituencies for providing overseas aid.

    The World Bank is a demonstrably effective provder of development assistance; and one of its strengths (not weaknesses, as you suggest) is the quality of its technical analysis and the intellectual calibre of its staff.  There is no corresponding evidence that providing support through small private contractors is as effective – and there are plenty of reasons for thinking that it is less effective.  If development were "simple" as you suggest, then it would have happened long ago.  It is a complex and difficult problem, and the World Bank is extremely well placed to make a very important contribution to it.  (I do not work for the World Bank, in case you are wondering, and never have.)


  4. I never said development was simple hence, my statement about ‘containing’ poverty- since curing it is an impossibly  complex task.  By ‘keeping it simple’ that I support ground up rather than top down options. However, I admit that sentence was a bit crass and that bottom up solutions may have big drawbacks as well. Ideally, most aid should come through debt relief and family planning in my view ( name me a country that has got out of poverty by borrowing money rather than saving it?)

    As regards immigration and third world aid: according to UN figures, relative to UDI , the  U.S contributes the least of all developed countries to third world aid (O.22 percent ), while Norway and Luxembourg contribute the highest levels of aid, relative to UDI (over 0.85 percent). The U.S lets in nearly a million third world immigrants a year while Norway and Luxembourg let in few immigrants. High immigration Canada and Australia also make low aid contributions to the third world. Low immigration Japan and Italy do make low contributions to third world world aid (0.28 percent of ODI and 0.29 percent of UDI respectively) but they have pretty much been in recession since 1990, so this is hardly suprising. I think the correlation I have suggested between low aid and high immigration deserves to be checked out.

    On the topic of helping the developing world through immigration-I can’t see how it is cost effective. Currently large numbers of third world immigrants flock to cities like London, Los Angeles, Sydney and New York to do low wage jobs. Most of their wages go towards paying extremely high rents leaving little to sent back to relatives. Meanwhile, the native working class are pushed out by high rents and declining infrastructure. As I see it, neither the local working class nor developing countries benefit from this situation.  Furthermore, when I worked in London doing minimum wage jobs(TRYING to save for travels while backpacking) most of my thirld world co-workers were educated students who, one would hope, would be be better off doing skilled jobs in their own countries (I had an arts degree so I diddn’t have much choice about doing minimum wage work) 

  5. Sorry, the figures given in my previous post were for overseas direct aid as a percentage of GNI, according to OECD sources for 2005. A detailed list can be found at the ‘global issues’ website.

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