Tag: immigration

Four Policy Implications of National Academies Report on Immigration

The National Academies of Sciences, Engineering and Medicine released a major new report on the fiscal and economic impacts of immigration on the United States yesterday. The report is being heralded by all sides of the immigration debate as the most important collection of research on this issue. This reception could be due to the Academies’ meticulously avoiding any policy implications from their research, allowing policy wonks to draw their own conclusions. Here are my top four policy implications of the new research:

1) Dramatically expanded high skilled immigration would improve federal and state budgets, while spurring economic growth. The fiscal and economic benefits of high skilled immigration are tremendous. The net value to the federal budget is between $210,000 and $503,000 for each immigrant with a bachelor’s degree over their lifetime (the full chart below highlights the overall impact). The sections on immigrant entrepreneurship and innovation are also universally positive. “High-skilled immigrants raise patenting per capita, which is likely to boost productivity and per capita economic growth,” they conclude (p. 205).

Exempting spouses and children of legal immigrants, as Congress intended, would double the flow of high skilled immigrants, allowing the United States to capture these benefits.

2) Legalization could hasten assimilation. One conclusion of the report is that wage and language assimilation is lower among the 1995-1999 cohort of immigrants than among the 1975-1979 cohort. The rise of illegal immigration likely explains much of this difference. More than one in four immigrants today is illegally present in the United States. As Douglas Massey has shown, documented and undocumented immigrants had roughly the same wages until the 1986 law banning employment of undocumented immigrants, which depressed the wages of undocumented immigrants. Legalization would reverse this.

Moreover, other studies have shown that immigrants who are legalized rapidly increase their earnings and invest in skills, including language acquisition. A legalization program that specifically required language classes, education, and workforce participation while restricting welfare, as the 2013 Senate-passed bill did, would further enhance the gains from legalization.

Low-Skilled Immigrants Are Still Not Harming Low-Skilled Natives

On Monday, I argued that a new report by the Center for Immigration Studies (CIS) entitled “Immigrants Replace Low-Skill Natives in the Workforce” provided no evidence that immigrants are causing low-skilled natives to quit working. In fact, the trends point toward immigration pushing employed natives up the skills ladder. In his response yesterday, the author Jason Richwine either ignores my points or backtracks the claims in his original report.

Here are six examples:

1. In his paper, Mr. Richwine writes that “an increasing number of the least-skilled Americans [are] leaving the workforce” (my emphasis). I pointed out that this statement is not true, that the number of high school dropouts not working has actually declined since 1995. But in his response, he drops the “increasing,” altering his claim to say that “low-skilled Americans have been dropping out of the labor force even as low-skill immigrants have been finding plenty of work.” This altered claim is true. Some low-skilled Americans have dropped out of the labor force during this time, just not more of them, which is the implication.

Liberalized Immigration Will Help Mothers More than Trump’s Child Care Plan

Donald Trump recently unveiled a new child care plan whereby the government will force employers to give time off to new mothers in exchange for some shuffling of the tax code.  Mothers do tend to benefit from such schemes but they also end up paying for their time off in other, indirect ways like lower wages.  Forcing employers to pay their female employees to take time off decreases the labor demand for child-bearing age women and increases their supply, thus lowering their wages.  Economist Larry Summers, former Director of the National Economic Council during President Obama’s first administration, wrote a fantastic paper explaining this effect.

Many firms have maternity leave policies that balance an implicit decrease in wages or compensation for working-age mothers with time off to care for a newborn.  The important point about these firm-specific policies is that they are flexible.  Some women want a lot of time off and aren’t as sensitive to the impact of their careers while others want to return to work immediately.  A one-size fits all government policy will remove this flexibility.    

Regardless of the merits or demerits of Trump’s plan, economists Patricia Cortes and Jose Tessada discovered an easier and cheaper way to help women transition from being workers to being mothers who work: allow more low-skilled immigration.  In a 2008 paper, they found:

Exploiting cross-city variation in immigrant concentration, we find that low-skilled immigration increases average hours of market work and the probability of working long hours of women at the top quartile of the wage distribution.  Consistently, we find that women in this group decrease the time they spend in household work and increase expenditures on housekeeping services.

The effect wasn’t huge but skilled women did spend less time on housework and more time working at their job.    

Younger women with higher educations and young children would be the biggest beneficiaries from an expansion of childcare services provided by low-skilled immigrants.  There are about 5.4 million working-age women with a college degree or higher that also have at least one child who is under the age of 8 (Table 1).  Almost 78 percent of them are employed, 2 percent are unemployed looking for work, and 21 percent are not in the labor force.    

Immigration and Terrorism

Cato published a paper of mine today entitled “Terrorism and Immigration: A Risk Analysis.”  I began this paper shortly after the San Bernardino terrorist attack in December last year when it became clear that few had attempted a terrorism risk analysis of immigration in general, let alone focusing on individual visa categories.  There were few studies on the immigration status of terrorists and the vast majority of them were qualitative rather than quantitative.  Inspired by the brilliant work of John Mueller and Mark Stewart, I decided to make my own.  

From 1975 through the end of 2015, 154 foreign-born terrorists murdered 3024 people on U.S. soil.  During that same time period, over 1.14 billion foreigners entered the United States legally or illegally.  About 7.4 million foreigners entered the United States for each one who ended up being a terrorist.  Startlingly, 98.6 percent of those 3024 victims were murdered on 9/11 (I did not count the terrorists as victims, obviously).  However, not every terrorist is successful.  Only 40 of those 154 foreign-born terrorists actually ended up killing anyone on U.S. soil.    

Immigrants frequently enter the United States on one visa and adjust their status to another.  Many tourists and other non-immigrants frequently enter legally and then fall out of status and become illegal immigrants.  I focused on the visas foreigners used to enter the United States because applications for that visa are when security screenings are initially performed. 

Let’s Stop Discriminating Against Immigrants From Populous Nations

Immigrants from India waiting to receive residency in the United States may die before they receive their green cards. The line is disproportionately long for Indians because the law discriminates against immigrants from populous countries, skewing the immigration flow to the benefit of immigrants from countries with fewer people. This policy—a compromise that resolved a long-dead immigration dispute—is senseless and economically damaging.

In the 1920s, Congress imposed the first-ever quota on immigration, but rather than just a worldwide limit, it also distributed the numbers between countries in order to give preference to immigrants from “white” countries. In 1965, Congress repealed this system with one that allowed immigrants from any country to receive up to seven percent of the green cards issued each year. This was an improvement, but is an anachronism today and it is causing its own pointless discrimination.

The per-country limits treat each nation equally, but not each immigrant equally. China receives the same treatment as Estonia, but immigrants from Estonia who apply today could receive their visas this year, while immigrants from China who apply today could have to wait a generation. It is equality in theory and inequality in practice. It is arbitrary and unfair.

Immigrants Are Not Causing Low-Skill Natives to Quit Working

The Center for Immigration Studies (CIS) released a report by Jason Richwine last week entitled “Immigrants Replace Low-Skill Natives in the Workforce.” The Cato Institute has previously pointed out the inaccuracies, methodological tricks, and disingenuous framing that have plagued CIS’s reports on numerous occasions, but this latest report performs poorly even relative to those prior attempts. More importantly, its underlying numbers actually buttress the case for expanding legal immigration.

The report’s central finding is that the share of native-born high school dropouts in their prime who are not working has grown at the same time as the population of similarly educated immigrants. While Mr. Richwine explicitly states that this finding “does not necessarily imply that immigrants push out natives from the workforce,” he goes on to imply exactly that throughout the report, blaming immigrants for “causing economic and social distress.” 

First of all, “distress” would imply that at least some more prime-age, lesser-skilled natives are out of work—i.e. unemployed or out of the labor force—now than prior to the wave of immigration in the 1990s. But this is incorrect. The numbers of such workers in their prime (ages 25 to 54) actually declined by 25 percent from 1995 to 2014, according to Census data. For the last decade, the number has remained roughly constant. Richwine is just wrong to state that “an increasing number of the least-skilled Americans [are] leaving the workforce.” (Note that while the CIS report focuses on native men, the trends in all of the following figures are the same direction regardless of sex.)

“We Take Anybody” – Trump’s Central Premise Is False

In his speech last night, Donald Trump stated that “immigration as a share of national population is set to break all historical records” and promised to restore a “historical norm.” It is the underlying premise behind his entire speech. His “deportation task force,” E-Verify, and all the rest is all about enforcing a lower rate of immigration and ending “an open border to the world.”  “We take anybody,” he said later. “Come on in, anybody.” He couldn’t be more wrong.

The United States has accepted roughly one million immigrants per year as permanent residents. As a share of the population, this number contributes 0.32 percent of the population. The historical average is 0.45 percent—nowhere close to extreme. As you can see, the immigration norm that we abandoned in the 1920s was much higher than the levels that we are seeing today. 

Figure 1: Historical Immigration Rate (Legal Permanent Residents as a Share of U.S. Population)

Source: Department of Homeland Security

Another way to view the rate of immigration is to look at the net increase in the total foreign-born population—which includes unauthorized immigrants—as a share of the overall population. The Census Bureau’s records on the foreign-born population only go back to 1850, but the annual rate of increase in recent years is also well within historical norms. The aberration was the 1930s to 1960s when the foreign-born population shrank in size. The United States is returning to its historical average of 0.21 percent. The rate in 2014 was 0.22 percent.

Figure 2: Annual Increase in the Total Foreign-Born Population as a Share of Total Population (Decadal Averages)

Source: Census Bureau

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