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On the economics of immigration

On the economics of immigration. George J. Borjas Harvard University April 2012. Immigrants in workforce. Trends in immigrant share, by education, . Percent wage differential between immigrant and native men. An interesting question.

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On the economics of immigration

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  1. On the economics of immigration George J. Borjas Harvard University April 2012

  2. Immigrants in workforce

  3. Trends in immigrant share, by education,

  4. Percent wage differential between immigrant and native men

  5. An interesting question • Do immigrants alter the employment opportunities of native workers? • “After World War I, laws were passed severely limiting immigration. Only a trickle of immigrants has been admitted since then. . .By keeping labor supply down, immigration policy tends to keep wages high.” • Paul Samuelson, Economics, 1964.

  6. Scatter diagram relating wages and immigration (removing decade effects)

  7. Predicted impact of 1980-2000 immigrant influx Short run: Capital stock is fixed Long run: Rental price of capital is fixed

  8. Who gains? Who loses? • Workers lose: 2.8 percent of GDP, or $400 billion. • Employers gain: 3.0 percent of GDP, or $430 billion. • Net gain is about $30 billion annually, about $110 per native-born person. • Distributive conflict is at the core of immigration.

  9. “Public charge” restrictions • First restrictions: Massachusetts, 1645 and 1655; New York, 1691, sets up a bonding system • 1876: Supreme Court overthrows state regulations. • 1882: Congress bans entry of “any persons unable to take care of himself or herself without becoming a public charge.” • 1903: Congress approves deportation of immigrants who become public charges within two years after arrival “for causes existing prior to their landing.”

  10. Trends in percent of households receiving assistance (cash assistance, food stamps, or Medicaid)

  11. Social mobility, 1970-2000 Correlation = .5

  12. Social mobility, 1910-1990 Correlation = .25

  13. Social mobility in the 21st century • There will likely be less assimilation because: • Economic conditions are different • Expansion of welfare state • De facto moratorium (policy shifts and Great Depression) • Two world wars • Change in ideological climate re assimilation, affirmative action

  14. Immigration policy • So: what do all these findings imply about U.S. immigration policy? • Nothing at all!!!

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