EC321-Topic#6: Immigration

Due to the large quantity of legal and illegal immigration each year, immigration persists as a heated issue of debate in United States politics. However, any serious ‘comprehensive’ immigration policy should contain a path to continue allowing for legal immigration.

George Borjas and others have approached the question of how many immigrants, and of what type, should be allowed to legally immigrate into the U.S. each year. With certainty any type of immigration reform will include legalized immigration, and the amount of immigration will help form the basis for our future political economy as Paul Krugman notes.

British economists are also examining similar questions regarding immigration. There is some fear among British residents that immigration will be possibly detrimental to native inhabitants. Other authors have even advocated allowing expanded immigration.

Questions you might try to answer:

  • Do you believe immigration is a positive or negative impact on the native population?
  • Where do you believe the truth lies regarding the wage effects of low-skilled or high-skilled immigration?
  • What is your interpretation of Krugman’s influence of immigration on the political economy? Do you believe that immigration could result in American apartheid?
  • Compare the situations of the US and the UK regarding the different types of immigration faced and the possible solutions.

Remember… I would like your statements to be as subjective as possible, or in jargon terms, positive and not normative in nature. Also, remember, I want you to keep your descriptions short, basic, and related to classroom content. Read other students comments before posting, and please leave your name with your posting.

4 thoughts on “EC321-Topic#6: Immigration”

  1. George Borjas and others have approached the question of how many immigrants, and of what type, should be allowed to legally immigrate into the U.S. each year. I, along with many economists, feel that “quotas” are economically inefficient. Many studies have been done in regards to trade theory and the efficiency of quotas v. taxes. Often, taxes are found to be more effective and efficient than quotas. In this case, immigration could be viewed as a trade of human capital, labor. The trades are often highly one-sided, with immigrants [very low skilled and very high skilled] coming into the U.S. Therefore, I would suggest some form of immigration tax as opposed to quotas being placed on how many immigrants and of what nationality should be allowed into the country each year. Liberalization, theoretically, leads to efficiency; however, the government is in place to re-adjust the market when market failures occur. With that said, I pose the question to the class whether you believe “one-sided” immigration is a market failure?

  2. While I believe that high levels of immigration have small negative effects on the wages in the country receiving the labor , I feel that these effects are outweighed by the benefits of immigration, at least up to a point. Normally, the addition of immigrants (legal or illegal) into the labor force would push the labor supply schedule out which causes lower wages and increases the amount of labor employed. Proposals to register illegal immigrants and legalize large numbers of immigrants means that the supply of labor will shift out, but the wage will not be able to reach equilibrium due to the U.S. minimum wage. This will result in an increasing oversupply of labor which will increase competition for jobs, especially at the low end, and pull wages down. I personally don’t think that one-sided immigration is a market failure, in fact I feel like it’s the norm, the challenge is keeping the volume of immigration in the range where the benefits of immigration outweigh the costs.

  3. I don’t see my response posted, so I’m going to try again…Under current regulations (as of June 2007), 1 million legal immigrants enter the US each year. If I have understood Becker’s argument correctly, he proposes that the US should allow an additional million, highly skilled workers, to immigrate to the US each year. Krugman’s article cites a study by Jeffrey Williamson, who studied the effects of immigration in the early 1900s. Williamson posits that low skilled workers experienced a 10% drop in real wages due to immigration, due to the increase in the supply of low-skilled labor. This increased income inequality. According to this logic, implementing Becker’s proposal of an additional million high-skilled workers would have the same effect on the wages of high-skilled workers. However, in this situation if the wages at the top of the spectrum fell by 10%, it would lower inequality. I see that as a positive outcome.

  4. It is my belief that low-wage labor is crucial for our economy to function and prosper. In today’s society of cost minimization and profit maximization, it would be incredibly difficult to simply halt the influx of illegal immigrants and continue to enjoy economic stability. That said, I agree with Paul Krugman’s stance on this issue to an extent. We cannot completely debate the immigration reform issue simply based on economic gains and losses, and must consider the long-term implications to a country’s native population. While an immigration reform bill would allow illegal immigrants to become citizens and give them the legal benefits afforded to the country’s native population (voting rights, minimum wages), the long run stability of our country’s political economy would be uncertain. I believe that offering the same rights to illegal immigrants as US citizens would prevent any sort of ‘political apartheid’ in the future.Conversely, a new era of legalized immigration (under a reform bill), can also damage our economic landscape. Paying newly-legalized immigrants the same wages as US citizens will inevitably become too expensive for many labor intensive industries that rely on below-minimum labor wages, thereby forcing these industries to shut down. These are the sorts of pros and cons which much be thoroughly analyzed when debating the immigration issue.

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