May 28, 2006
Comment on Immigration Policy-BECKER
I have been writing about immigration policy for quite a while. Each time I am impressed by how much interest there is in this subject, and the strong beliefs and emotions involved. I will respond to some of the many comments, although I will not do all of them justice.
I strongly believe in either enforcing laws or changing them. I am not happy with the position we face with regard to illegal immigrants. It is not good precedent to ignore immigration laws in deciding how to treat illegal immigrants, but we do that too with tax amnesty opportunities. With so many illegal immigrants here, it is unrealistic to believe we can throw them all out. We should have faced the issue many years ago, as I, along with others, were advocating, but we did not.
So we have to adjust to what we have. I believe amnesty at this time, with a few fines and payment of some back taxes, is probably the best of bad alternatives, but we can take steps to reduce problems with future illegal immigrants. A relatively secure identity card that is needed to get a job, combined with serious fines to employers that hire with workers without these cards, seems like the best available approach.
We should, however, greatly expand the number of legal immigrants accepted. This would include unskilled as well as skilled, but I would put great emphasis on the skilled. This country can easily accommodate and benefit from substantial increases in the number of legal immigrants admitted. To be sure, workers that the immigrants compete against would have their earnings lowered, but that effect would be relatively small, and the gains to others would be far greater- the excess of gains over losses can be easily demonstrated by simple economic analysis.
I do not deny that immigrants come for many reasons: higher earnings, freedom, better opportunities for children, etc. But it is unrealistic to deny that some come to take advantage of free and good medical care, free and good schools for children, and other benefits. Moreover, incentives to come due to the generous entitlements would become much greater if we tried to return to the nineteenth century of unlimited immigration.
To Robert Book, I do agree that the first best might be to deny illegal immigrants access to various benefits. I discussed that in my earlier post on immigration. But that policy has been tried and failed politically. It is hard politically to enforce denying medical and other benefits to sick adults, and even more so, to sick children. So what I taught in Econ. 301 is right, but has to be expanded to take account of political economy considerations.
A common fallacy is to assume a fixed number of jobs, so that if immigrants take some, native-born Americans have fewer. Or if older workers keep their jobs because they work until later ages, younger workers have fewer jobs. The number of jobs that can be created is very elastic, and depends on wages, productivity, etc. What is true is that immigrants will lower the earnings of natives with similar skills. I addressed that issue above.
Posted by Gary Becker at 12:28 PM | Comments (5) | TrackBack (1)
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Comments
The only serious deterrent to illegal immigration is a credible contingency plan to annex Mexico.
Posted by Arun Khanna at May 28, 2006 3:22 PM | direct link
Doesn't it make sense to get the deterrents--the fence, ID cards, employer sanctions, taxes on remittances, etc.--in place and see that they work to a degree, before trying any form of amnesty or quasi-amnesty? Without a deterrent, any form of legalization will attract more low-skilled illegal immigrants.
I am also concerned that even legal immigration, if too great in numbers, will threaten what is left of our cultural homogeneity. There is a balance to be struck between purloining the world's intellectual capital, and endangering our national identity.
Posted by Grumpy Old Man at May 28, 2006 10:13 PM | direct link
So we have to adjust to what we have. I believe amnesty at this time, with a few fines and payment of some back taxes, is probably the best of bad alternatives, but we can take steps to reduce problems with future illegal immigrants.After the 1986 amnesty, did the numbers of illegal immigrants crossing the border increase or decrease?
Posted by Simon at May 29, 2006 10:40 AM | direct link
Grumpy,
The goal of increasing legal immigration, of persons of all skill and education levels, is to attract more labor to benefit U.S. citizens, and that includes unskilled as well as skilled immigrants. I agree with Posner and other commenters that immigrants should not be allowed to apply for entitlements, save perhaps for medical services that prevent infectious diseases. However, the entire reason for proposing increased legal immigration, of any person willing to work and not asking for handouts, is to benefit U.S. citizens. The lack of labor mobility between countries around the globe, except now within the EU, is a major source of poverty and unemployment both in the United States and abroad due to the economic inefficiencies immigration regulations introduce into the markets.
As long as you don't give more to them than they return in tax revenues, including increased revenues from employers of immigrants, and as long as they work and create something or provide a service of value to U.S. citizens (i.e. people pay for it), immigrants are beneficial to our economy generally.
In short, don't worry about immigrants, Grumpy. Demand that they work and not be given handouts, and demand that those who are dangerous criminals be deported. Aside from that, welcome the benefits they bring to you, including increased investment, more jobs, lower prices, etc.
Poker Player
Posted by Poker Player at May 31, 2006 2:58 PM | direct link
Professor Becker,
Doesn't your conclusion pasted below assume not only an increase in unskilled labor, but also, an increase in the proportion of unskilled labor relative to skilled labor, as well as flat investment? These premises may be untrue.
"The number of jobs that can be created is very elastic, and depends on wages, productivity, etc. What is true is that immigrants will lower the earnings of natives with similar skills. I addressed that issue above."
But, what if the number of skilled immigrants permitted to enter the country is also increased so that the proportions of skilled and unskilled labor remain constant?
If a few assumption are made: increased investment due to the decrease in labor costs, increased skilled immigration (the demand for skilled labor unmet by the H1 program suggests we would be able to dramatically increase the number of skilled immigrants as well as unskilled)
Then, the demand for unskilled labor resulting from the increased supply of well paid skilled labor, as well as from the unskilled immigrants, would put upward pressure on the wages of the unskilled, offsetting the decrease in wages resulting from their increased supply.
Assuming increased investment, income distribution may remain fairly constant, and the size of the economy would simply be larger.
Poker Player
Posted by Poker Player at June 1, 2006 3:21 PM | direct link