Question

The United States has been described as a melting pot of the world and a favored location for international migration, also referred to as a brain drain phenomenon. Immigration is always a topic of debate in news and media. What are the welfare effects of such requirements? Do you oppose or favor an open immigration policy?

Answer 1

Whether native-born Americans gain or lose, immigration most directly affects the welfare of immigrants themselves. Immigrants come with the expectation that they will gain from immigration. If they had not felt that they would gain, they were free not to immigrate. Economic betterment is only one of many reasons why immigrants come here. Some may come expecting economic loss, but this must be offset by higher perceived gains in other things they value, like political freedom or reunion with their families. These gains are all before the fact. It may turn out that some immigrants are disappointed with life in their new country and some who fail to realize a gain return to their country of origin. Beyond the immigrants themselves, their immigration may have implications for the economic well-being of those who remain in the sending countries. Because immigration reduces labor supply in those countries, the income of other workers rises and the income of other factors of production falls there

Immigration also affects the prices of the inputs that are used to produce these goods and services. Those inputs for which immigrant labor substitutes will suffer as the prices of their services fall. Simply put, "substitutes" means two things that are very similar to one another. As a homely example, red apples and green apples are almost perfect substitutes, so that an increase in the number of red apples would not only reduce the price of red apples, but also simultaneously lower the price of green apples by about the same amount. In the context of immigration, whereas we shall see many immigrants are unskilled laborers, the strong presumption is that immigrants are substitutes for domestic unskilled labor. Therefore, an increase in the number of immigrants will generally decrease the wages of domestic unskilled workers.

In one sense, immigration policies are highly constrained; in another, they are up for grabs. Any sovereign nation must decide who may enter, who may become a member, and on what terms. In the American welfare state, completely open borders would be a political impossibility, engendering a harsh backlash against immigrants that could make earlier nativism pale by comparison. Within that constraint, however, there are any number of ways to combine and weight our multiple goals in admitting immigrants. We let in some immigrants to reunite families; others because of the labor, skills, or other resources they bring; still others for a mixture of humanitarian and geopolitical purposes -- providing a haven for refugees and embarrassing regimes we oppose. This diversity of goals, coupled with an intense demand for U.S. immigration slots, gives immigration policymakers some latitude.

Most Americans fall somewhere between these two poles. Many with little sympathy for libertarian or free market orthodoxies view the present levels of immigration as sufficient. Some favor more of it. Americans generally admire immigrants, value ethnic diversity and take pride in our far-flung origins. Those animated by a vision of cultural assimilation seek a melting pot, while the more pluralistic prefer a cultural stew. Still others are stirred by humanitarian ideals. But despite their pro-immigrant sympathies, they all share a concern about how immigration affects one or another aspect of American life; their particular concerns tend to reflect their class, locality, ethnicity, and other factors. In this vast middle range of opinion, the liberal-conservative axis is a poor guide to attitudes toward immigration.

Economists are prominent in the current policy debate. They emphasize that people cross borders for much the same reason that Toyotas, computer programs, and Eurodollars do: their expected economic value will be greater at their destination. To economists, the policy problem is to decide what kinds of skills we need and then to devise ways to induce workers who possess them to come. Correct criteria will make us a richer country; poorly designed ones will leave us poorer. So long as newcomers produce more wealth than they consume, the more the merrier.

Most citizens and elected leaders have a very different view of immigration. They see immigrants less as "human capital" than as bearers of alien cultures with distinctive values, language, interests, and claims. Newcomers will have children, take up space, use public facilities, compete for jobs, housing and preference, eventually vote, and seek to mold our society to their own visions. Natives may view these changes with pleasure or alarm, but they know that they are irreversible. To the lay mind, immigration is not just a wealth-enhancing transfer of resources; it is also an enormous social gamble. All societies are risk averse and hedge their bets. They impose the kinds of limits that economists find inefficient.

Immigration threatens Americans' sense of control by seeming to jeopardize three fundamental values: national autonomy, economic security and the "social contract" that secures the welfare state. Because each of these concerns has some basis in fact, public demands for tougher laws limiting who can enter, work, and claim welfare benefits seem plausible. Past reforms have not succeeded in allaying the public's anxiety.

Traditionally, immigration policy was designed to enhance the sovereign autonomy of the United States at the expense of all other values, and the courts interpreted the Constitution accordingly. Today, our power to work our will in the world is eroding. Immigration exemplifies this erosion. When Fidel Castro decided to expel his opponents and empty his jails and hospitals, he transformed the face of south Florida forever. When Mexico devalued the peso, it propelled tens of thousands of its people north to Houston and Los Angeles in a desperate search for dollars. When gunfire erupted in Tiananmen Square, industry and engineering schools throughout the United States had to reassess their plans. When Violeta Chamorro won her election, thousands of Nicaraguans in the U.S. instantly became deportable. When Thailand threatened to close refugee camps, we had to accept more Kampucheans and Vietnamese for resettlement in the U.S.