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Impact of Immigration on the Distribution of Well-Being. by Gary Burtless The Brookings Institution August 11, 2009 Social Security Administration and Retirement Research Consortium Conference. Number (millions) and percent foreign born, 1850-2007. Source: Census Bureau.
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Impact of Immigration on the Distribution of Well-Being by Gary Burtless The Brookings Institution August 11, 2009 Social Security Administration and Retirement Research Consortium Conference
Number (millions) and percent foreign born, 1850-2007 Source: Census Bureau.
Immigration and the income and wage distributions • Historically high rates of immigration • Major differences between immigrants and current residents • Age distribution • Skill mix • Direct impact on distribution of well-being • Average wage • Average income • Age-profile of income
Immigration and the income and wage distributions • Ignore feedback effects on natives’ wages • Use March CPS / ASEC files to estimate trends in wages, incomes ifthere were fewer immigrants • Identification of immigrants, year of entry • YEARS: 1993-2007 • POLICY CHANGE: 1980 • Doubtful identification of adult children of post-1979 immigrants
Post-1979 immigrants in the U.S. wage distribution, 1993-2007 Share = 13.3% Share = 10.6% Share = 5.8% Source: Tabulations of 1994, 2001, and 2008 ASEC files.
Average Annual Wage by Immigrant Status and Year of Entry into the U.S., 1993 - 2007 19% 26% Source: Tabulations of 1994 - 2008 ASEC files.
Impact of Reduced Immigration after 1979 on Level of Economy-Wide Average U.S. Wage, 1980-2007 Source: Tabulations of 1994 - 2008 ASEC files.
Impact of Post-1979 Immigration on Average Size-Adjusted Personal Income, 1993 - 2007 -2.0% -3.2% Source: Tabulations of 1994 - 2008 ASEC files.
Impact of selected changes in immigration policy on median size-adjusted personal income, 1993-2007 Percent of median size-adjusted income in indicated year +1.8% +1.7% +1.1% +1.0% Source: Tabulations of 1994, 2001, and 2008 ASEC files.
Increase in size-adjusted average income resulting from 20% cut in immigration after 1979: IMPACT ON AGE PROFILE OF INCOME (2006)
Increase in size-adjusted average income resulting from reduced immigration after 1979:IMPACT of ALTERNATIVE POLICIES (2006) 50% CUT IN MEXICAN IMMIGRATION 50% CUT IN DROPOUTS 20% OVERALL CUT
Immigration and well-being • Reduced immigration would -- • Raise average wage of remaining population • Produce faster growth in initial social security benefits • Increase residents’ average income • Boost the relative incomes of residents who are members of households headed by younger adults • These conclusions ignore spillover effects of lower immigrant labor supply on prices and on natives’ employment and wages