Open Letter on Immigration

Five hundred economists have signed an open letter on immigration.  These include five Nobel Laureates—Thomas C. Schelling, Robert Lucas, Daniel McFadden, Vernon Smith and James Heckman.  And, for what it is worth, me.  The letter says:

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

Of course, we may not be right.  But the breadth of the consensus is striking.

The letter is framed in a mainly the context of the American debate, which is a little different from Europe.   America makes it relatively easy for immigrants to work, but hard for immigrants to claim welfare benefits.  Europeans tend to make it hard for immigrants to work, but relatively easy to claim welfare.  Thus in America the debate focuses mainly on the impact on jobs and wages, while in Europe there is more discussion about fiscal costs.

4 thoughts on “Open Letter on Immigration”

  1. I also remember the 364 economists; and I think they were correct:

    Statement drafted on March 13, 1981:

    “We, who are all present or retired members of the economics staffs of British universities, are convinced that:

     

    (a) there is no basis in economic theory or supporting evidence for the Government’s belief that by deflating demand they will bring inflation permanently under control and thereby induce an automatic recovery in output and employment;

    (b) present politics will deepen the depression, erode the industrial base of our economy and threaten its social and political stability;

    (c) there are alternative policies; and

    (d) the time has come to reject monetarist policies and consider urgently which alternative offers the best hope of sustained recovery.”

     Which bit was wrong?

  2. Owen, Right off the reel I can see some interesting names are not on the list. 

    Gary Becker, Nobel Laureate, doesn’t seem to have signed it – nor have perennial

    Nobel favourite James Hamilton of UC San Diego, Paul Krugman, Princeton professor and

    New York Times columnist, nor  Menzie Chinn of the University of Wisconsin. The George

    Mason Gang of Donald Boudreaux, Tyler Cowen and Bryan Caplan, for the taking of

    whose collective effusisions on immigration Siberia cannot produce enough salt, are

    there en masse – but their colleague Walter Wlilliams seems to be missing, as is

    Thomas Sowell, senior fellow at the Hoover Institute. And the world’s most famous/

    infamous immigration economist, George Borjas of the Kennedy School of

    Government, also seems to be missing.

    Maybe they’ll come round. Maybe they weren’t asked. Maybe you’re right. But you shouldn’t

    make the mistake of thinking that economic consensus on immigration is as you

    seem to think.

  3. I’m inclined to say relaxing immigration standards would be a net loss to a country (despite potentially being a net gain to the world).


    1) desirable immigrants (however defined) will probably be allowed into a country anyway, relaxing standards allows in marginally less desirable immigrants, these immigrants will have a number of traits such as greater culture differences low education poor etc (if not they should have been allowed in anyway).

    2) If you have a good system for giving the poor a hand up this hand up will come partly at the expense of the rich. This may be a good thing (I think so) but adding an extra poor person drags down the average and is an additional person who must share the resources. Take an extreme example if 1 billion African and Asian poor immigrated. All of a send to pull them above the poverty line (the new very low one) even the Americans on minimum wage might have to pay very high taxes.

    SO

    > 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.

    I agree with this largely – except the country would only create those jobs at equilibrium. Would the arrival of a large number of new people be equilibrium? Also it would be affected by things like minimum wages and other factors I the economy that are not allowed to seek equilibrium…

    > With estimates of wage reductions for high-school dropouts ranging from eight percent to as little as zero percent.

    That gives us an average of 4%, maybe each 2 decades? Depends on exactly what they mean I guess but it isn’t clearly defined.

    > 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.

    You can measure these things and determine if immigrants on average bring less capital or less skills or less entrepreneurship than the average native born American brings. You could also measure if the marginal extra immigrant brings these things.

    > Instead, we should promote policies, such as improving our education system, that enable Americans to be more productive with high-wage skills.

    This is not an either or situation – you should promote education etc REGARDLESS of immigration policy

    > 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.

    Sounds like it could be a balance of payments issue…

    I support the idea of having open boarders but as long as you do have borders (and incompatable policy structures) the rules should be clear and enforced.

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