Getting the Job Done or Taking the Jobs?

Immigrants: good or bad?

let me in! let me innnnnnnnnnnnnnnnnn!

I’ve recently finished reading Bryan Caplan’s Open Borders, a book arguing for just that - in a fun, accessible, thorough way. I can’t speak for the rest of Caplan’s oeuvre, but Open Borders is definitely worth checking out - whether you are for or against immigration. Last year, I also read a book about immigration: Streets of Gold, by Leah Boustan and Ren Abramitzky. The book is also excellent and accessible, and focuses on the history of American immigration.

So immigrants: are they good or bad?

The wretched refuse

I’m going to start with Streets of Gold because it’s backwards-looking: how have immigrants fared in the United States over the past 150 years? Pretty well, turns out.

There were two major waves of immigration, both around equally large - peaking at 14% of the American population each. The first wave of migration occurred during the early 20th century, and mostly consisted of Europeans of various nationalities, and the second wave, starting in 1965, consisted of Hispanics and Asians. The first era was finalized in 1924 by the passage of the (extremely racist) Immigration Act of 1924, and immigration was mostly negligible (the whole point) until 1965, with the passage of the Immigration and Nationality Act of 1965 (zero points for creativity). The story of how the second act passed is fascinating and responds to some truly bonkers ethnic politics, but that’s a bit beyond the point.

The book deals with three central questions: do immigrants (especially poor ones) move up in the income ladder, can immigrants assimilate to American culture, and does immigrant success harm native-born Americans?

The first question is simple: immigrants themselves frequently do not move up the income ladder, meaning that they stay roughly in line with their initial possibilities. But their children do - in fact, children of immigrants have the highest economic mobility of all Americans, and this is true (to differing degrees) for functionally every nationality. Considering socioeconomic mobility is fairly low for Americans, it’s an impressive feat. Contrary to popular belief, this does not have something to do with immigration - while immigrants are usually stereotyped as being obsessed with their children’s school and grades, second-gen immigrants don’t perform significantly better than their long-settled peers. The likeliest answer, probably, has something to do with the personal qualities of immigrants, and the culture of immigrant communities in particular - in other words, culture. And this was the same for early European immigrants or later “Third World” immigrants, too.

But if immigrants and their communities have unique cultures, that means they don’t assimilate, right? Not really. In the past, immigrants did not assimilate much (in terms of English literacy, for instance), but their children most definitely did, and (once again) past and present immigrants do not significantly differ. Measuring by fluency in English and fluency in original language, residence in immigrant neighborhoods, or marriages with other ethnicities, immigrants seem to have a certain degree of assimilation, and their children and especially grandchildren are as assimilated as anyone else. English fluency in particular is an important skill - it is nigh-impossible to receive an education or get a job without speaking the national language. Immigrant families do speak languages other than English at home, but this is mostly due to older and less assimilated family members being more comfortable speaking it, not due to a lack of desire to assimilate. Leaving immigrant neighborhoods is often seen as a sign of success by immigrants - that their children can make it on their own - and is usually associated with faster earnings growth, at least in Jewish immigrants. Intermarriage and the Americanization of names is another common phenomenon, especially in posterior generations. So all in all, what’s usually meant by assimilation does occur and has occurred in immigrants to the US.

Lastly, does immigrant success come at the expense of natives? Not really. A good example comes from big surges of migrants into specific economies - especially if unexpected. For instance, 125 thousand Cubans arrived in Miami over a very short span of time in 1980, and several studies (to some academic debate) did not find any mass disemployment effect, or much effect in wages - a lot of the impact in aggregate statistics comes from immigrants themselves being temporarily unemployed and/or taking lower-paying jobs. Similar results were found in studies of Cuban immigration to Miami, to . There’s two big reasons why a simple “more job seekers = more unemployment and lower wages” logic does not apply. The first is that, in a local economy, immigrants also represent demand: housing, groceries, personal services, etc. This additional demand might, in principle, more than offset the impact of additional job market pressure - and keep unemployment stable. The second reason relies on skills: immigrants, especially less educated ones, normally have less of the core skill natives have - English. Poorer countries have worse education systems, and immigrants normally take whatever positions they can get, meaning that new arrivals normally don’t compete with the “average” native worker that much, even in high paying professions. To this tune, most of the Miami labor market consequences were in other Spanish-speaking immigrants.

To infinity… and beyond!

Knocking on heaven's door

How many people should countries take? This seems like a complicated question, except it’s not - according to Bryan Caplan’s Open Borders (decent summary here), the answer is “as many as want to come”. The book, thus, defends that argument: that countries should not restrict immigration.

The initial argument is purely moral: countries that are very rich don’t have many justifiable arguments to restrict immigration. Bangladeshis who win a visa lottery have far higher incomes than those who lose - there are literally no differences beyond chance between the two groups. Allowing the poorest people in the planet to leave their violent, unstable home countries results, inevitably, in them improving their lot by astronomical percentages. People in El Salvador who live in gang-run areas have higher incomes than those outside gang-controlled areas simply because they are likelier to leave the country. And at the math Olympiads, the kids from poorer countries are much less likely to pursue higher education in math - unless Of course, there are arguments around the harm done by immigrants to their host countries, specifically around the economic impact, the fiscal impact, and impact on the culture and politics of the countries.

To start, are the immigrants harming their home countries by emigrating? It doesn’t seem so. Firstly, notions of brain drain seem overstated - it’s just not feasible for a lot of professionals to leave. But additionally, you can think of it this way: immigration is beneficial enough that people invest in additional skills to ensure a smoother exit. This means that, on net, allowing more emigration from poor countries increases, rather than decreasing, the amount of skilled professionals - not everyone who wants to emigrate decides to, and the skills they acquired don’t go away. And immigrants send money back home, which results in better performance in home countries when emigrants do better. But couldn’t helping the immigrants’ home countries be better? Well, economic performance in underdeveloped countries doesn’t have a linear relationship with emigration - under worse economic conditions, migration from El Salvador rose (unsurpisingly). But under better conditions, migration from Africa also rose - because the tailwinds ensured resources to procure all the paperwork, book tickets, etc. When Mexico designed welfare programs to prevent emigration, something similar happened - people used their checks to move abroad. And international aid overall has the same, positive impact: people just want to leave, and foreginers giving them hard currency is a pretty good way to do it. However, the same paper found that development aid (i.e. improving healthcare, education, infrastructure) does actually reduce emigration, but by a much smaller degree that aid overall increases it. There is, of course, a lot of debate over international aid.

There are many arguments against immigration based on the economic harms to natives in the host countries, but they’re just not true: even for low-skilled workers, excluding immigrants of comparable backgrounds yields very little, if any benefits, and in fact firms allowed to hire more immigrants expand production. After five years, there are no differences in productivity between firms that hire and don’t hire immigrants. The areas of the US that received the most refugees saw basically no differences with the areas that received the most. And when the extremely restrictive Immigration and Nationality Act of 1924 was passed, the US economy suffered from lower population growth, lower output, and lower productivity growth in the most affected areas.

But immigration isn’t just not a negative for recipient countries, it’s in fact a positive. If you look at the planet as a whole, allowing more immigration would boost global GDP enormously - more than free trade and free capital flows combined tens of times over. Obviously the immigrants themselves benefit enormously. But the host countries do so as well: immigrants account for a disproportionate share of US innovation, both from their own work and their influence on their colleagues. Immigrants to the US are incredibly likely to be entrepreneurs, and are also overhwemlingly likely to become venture capitalists as well. Plus, immigrants do work that natives won’t, especially in agriculture and in domestic labor - during immigration crackdowns, women have to drop out of the labor force because of the help they got with housework and childcare. Overall, immigration seems to be a net positive, economically, for the countries that receive immigrants.

A second line of concern is that immigrants will result in undue financial burdens to their host countries - the “welfare magnet” hypothesis. Well, obviously, you could just make immigrants not elegible for any welfare or public services, which is inhumane, but less so than just not letting them move. Additionally, the welfare magnet hypothesis is simply not true - immigrants use welfare at much lower levels than natives. Axtually, because most immigrants are working-age adults, they are a net positive for the government, especially at higher skill levels - but even low-skilled immigrants are a net positive, and it’s worth noting native-born citizens are a net negative at most income levels. The reason for this is not immigrants not being elegible for programs, but rather, that immigrants are mostly working-age citizens and not children or the elderly, who take up a lot of welfare money; in addition, immigrants tend to require fewer assistance during economic boom, but somewhat more during economic recessions.

The last set of concerns regards politics, culture, and public order. A lot of concerns around immigration center crime and lawlessness, but it’s widely acknowledged that immigrants commit fewer crimes than natives (because on top of regular punishment, they also get deported), even for low-skilled or undocumented immigrants. In terms of culture, immigrants to the US from all cultures and backgrounds have always tended to assimilate, and current immigrants are no different; additionally, not only is there no evidence that immigrants change the culture or values of their host countries, in fact they change their home countries to be like their destinations. In fact, most of the concerns around “deep roots” factors advocate from letting in a lot more immigrants, since the most harmed countries by US immigration restrictions are India and China - both generally considered strong on deep roots factors. A further concern is that institutions will degrade, but there isn’t really much evidence that it could happen: immigrants don’t tend to vote differently from natives (besides immigration issues, naturally), and don’t have huge outlier views. In fact, Hispanic voters appear to vote based on the same issues as everyone else: the economy, healthcare, education, normal positions on social issues. In some countries, immigration actually improved institutions because the immigrants had better ideas than the natives.

Conclusion

So, as it shakes out, immigration is pretty good. It doesn’t seem that immigrants take the jobs, and tend to benefit both their home countries and their host countries. Concerns about the welfare state are just misguided, but even if they weren’t, that calls for reforming welfare, not migration. And concerns involving public safety or the national polity are just not correct.

I mean obviously this isn’t really a political possibility, but the case for radically higher levels of immigration to developed countries seems pretty solid.