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Politics of Immigration Economics Research

Maximilian Farley

Immigration and Legislation

The economic impact of immigration has been highly debated within the last two decades as the issue of illegal immigration is constantly brought to attention and ways to resolve the issue are proposed, yet hardly ever implemented.

The Migration Policy Institute does not recognize a single piece of “major US immigration legislation” passed after the year 2006, which was an act to put up a fence between the American and Mexican border, although the Deferred Action for Childhood Arrivals program, or DACA, is, while not a piece of legislation, an implementation certainly affecting some immigrants.

daca expiration

Graph of Predicted DACA Expirations (Migration Policy Institute)

DACA

According to the American Immigration Council, the program offers a renewable legal status to those who arrived illegally in the United States as children and fulfill certain criteria. Currently, their status is uncertain, as the program was just a program and not a binding piece of legislation. Recipients had a legal status, but now the fate of those enrolled in the program have to await how the current presidential administration decides to handle their status.

The administration has already cancelled the DACA program. The last of DACA recipients’ protections are set to expire in March, 2020. According to the Migration Policy Institute,  DACA recipients are employed in a variety of fields and hold a variety of degrees of education, statistically rather similar to that of natural-born citizens, in terms of college enrollment.

daca education

Graph Comparing DACA Recipients Education Level to Total U.S. Population Level (Migration Policy Institute)

Immigration Economics Research

Giovanni Peri and researchers at the University of Pennsylvania, agree that immigration has slight marginal gains as a whole, while recognizing that it does have negative impacts for some. Peri believes immigration boosts the economy, without displacing American workers’ jobs in the long term. Research is conducted using areas that have high immigrant populations and compared to areas with low immigrant populations, while isolating immigration and economics.

Negative Effects of Illegal Immigrants

A study by the Wharton School of University of Penssylvania, or Penn Wharton, found illegal immigrants are typically employed for lower wages than citizen workers. Large concentrations of illegal workers cause a heavier tax burden on state and local governments, as illegal workers typically have larger families and are more likely to have children that do not fluently speak English, raising the cost of their public education, outweighing the state and local taxes they pay. Illegal immigration also increases unemployment for a short term as initial displacement from citizen workers in low-skill jobs like construction or agriculture occurs.

Positive Effects of Illegal Immigrants

Peri found illegal immigrants’ tendency to work for lower pay ends up increasing production in the long term, including that of other workers, as higher-skilled workers no longer have to do menial tasks and be paid much higher to do so than that of an illegal immigrant. Efficiency increases as specialization occurs. Illegal immigrants also have a tendency to spend their paychecks almost instantly on housing, television, and food, boosting those respective areas of the economy.

Effect of Low-Skill and Low Education Legal Immigrants

Studies Peri has conducted found that low-skill and low education immigrants operate in mostly the same way that illegal immigrants do, however, do not have the ability to work for less than minimum wage. Low-skill and low education immigrants also pay taxes. The social services they use outweighs the cost of the taxes they pay. Peri found that to be the case in high concentrated areas of these workers.

Effect of High-Skill and High Education Immigrants

Researchers at Penn Wharton finds that high-skill and high education immigrants tend to specialize in scientific and technical fields. Due to their higher wages, they pay a higher amount in taxes. A higher percentage of immigrants hold a graduate or professional degree compared to native-born Americans.

education levels

Comparison of Native-Born Education Levels to Foreign-Born Education Levels (Penn Wharton, UPenn)

Reaction of Native-Born Workers

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Graph Comparing Number of Less Educated Immigrants to Native-Born Workers (Federal Reserve Bank of San Francisco)

Peri’s “The Effects of Immigrants on U.S. Employment and Productivity” states that in low-skill areas, native-born workers tend to operate in mining and manufacturing, while immigrants tend to operate in agriculture and construction. Those displaced from jobs, such as in agriculture and construction tend to use their communication skills to find jobs in areas such as sales. In high-skill areas, native-born workers tend to operate in management and media, where language and cultural skills are more important than in scientific and technical fields.

Attitude About Immigration

A Gallup poll in 2007 and another one in 2017 shows a drastic change in the attitude Americans hold towards immigration. All areas of attitude about immigrants improved. The Gallup report states, “Many Americans, regardless of political party, could seek an influx of foreign talent as the country struggles to compete globally,” as an explanation towards the positive change.

immigrant attitude

Graph Comparing American Attitude Towards Immigrants (Gallup)

The Economy vs. The Native-Born Worker

In economist Edwin S. Rubenstein’s “The Negative Economic Impact of Immigration on American Workers”, Rubenstein argues that immigration lowers wages, lowers economic equality, increases poverty, and increases fiscal burden. He argues that education level statistics support this claim very well, with almost 40% of immigrants having not received a high-school diploma, which leads to lower wages, poverty, and an increase in reliance upon social programs.

Native-Born Who Benefit

Rubenstein believes employers benefit the most out of immigration, and Peri’s research finds that businesses are improved in efficiency and production due to the employment of workers willing to work for less than citizen workers and some business sectors benefit directly from immigrants as they spend their paychecks. Harvard economist George Borjas estimates employers gained $437 billion in 2013. Rubenstein also believes that consumers purchase cheaper goods, as labor costs are lowered.

Native-Born Who Do Not Benefit

Rubenstein’s research shows that low-skilled native-born workers see a decrease in wages as the market is filled with more low-skilled workers more willing to work in lesser conditions for lesser pay. George Borjas estimates $402 billion was lost from native-born workers’ wages in 2013.

The Effect on Immigrants

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Graph Showing Immigrant Labor Force Growth and Native-Born Labor Force Growth (Negative Population Growth Inc.)

According to both Peri’s report and the Penn Wharton report, immigrants mostly do not compete with native-born workers. In the low-skill job market, immigrants tend to compete for agricultural or construction jobs, as well as domestic services, and in the high-skill market, tend to compete for scientific and technical jobs, all positions mostly held by immigrants. Rubenstein’s research also shows the labor force growth for immigrants overshadows native-born labor force growth.

Politics

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Graph Showing Higher Income Inequality (Negative Population Growth Inc.)

According to Rubenstein, immigration leads to higher income inequality, stemming from a benefit to employers and a detriment to wage-workers, as well as a high percentage of immigrants with low education levels. The Penn Wharton report also reinforces Rubenstein’s claim by showing that a higher percentage of immigrants hold graduate or professional degrees than native-born workers.

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