Glenn and I

Glenn Loury and I talked about immigration last week as part of his Bloggingheads series, with much of the discussion focusing on the themes emphasized in my forthcoming book, We Wanted Workers. Glenn had read the book, and it truly made my day (heck, no, it made my month) when he told me it was “very impressive.” The discussion touches on many interesting points, both in terms of immigration research and immigration policy.

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Here’s the link to the video. Unfortunately, I do not have a clue about how to embed the video in a WordPress blog.

 

Employment of Undocumented Immigrants

Although there have been many attempts to regularize the status of the 11 million undocumented persons in the country, it is difficult to predict the economic impact of such regularization. The reason is simple: We know very little about the socioeconomic characteristics of undocumented persons.

I got curious about this a couple of years ago. The Pew Research Center has done a lot of work trying to impute an undocumented status variable for each individual in micro data such as the ACS and the CPS. They generously gave me access to some of their data and I’ve applied the method to the entire post-1994 CPS time series. My initial paper using these data looks at labor supply. One often hears that most undocumented immigrants come to the United States to work. It turns out that the claim is true, at least for men. Here is a summary of the key conclusions:

This paper provides a comprehensive empirical study of the labor supply behavior of undocumented immigrants in the United States. Using newly developed methods that attempt to identify undocumented status for foreign-born persons sampled in the Current Population Surveys, the empirical analysis documents a number of findings, including the fact that the work propensity of undocumented men is much larger than that of other groups in the population; that this gap has grown over the past two decades; and that the labor supply elasticity of undocumented men is very close to zero, suggesting that their labor supply is almost perfectly inelastic.

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Senate Testimony

I testified this morning before the Senate Subcommittee on Immigration and the National Interest. It’s something I haven’t done in years, but I have to admit that it was fun. Here is a copy of my written testimony.

The Metro was out of service today and it was a beautiful spring morning. I figured that it wasn’t worth getting stuck in traffic so I decided to walk the three miles from the hotel to Capitol Hill. During the walk, I was trying to think of a way where I could impress on the people in that room how the labor market works.

And the idea came to me that instead of talking about an H-1B program that lets in 65,000 high-tech workers (workers that most people attending those hearings have little in common with), we should instead think about an A-1B program that lets in 65,000 attorneys. These attorneys would have passed some sort of certification exam prepared by the American Bar Association. The test could be very, very hard, but I bet that Kaplan-like test centers would magically spring up all over the world to teach the requisite skills to would-be lawyers and that many potential lawyers would quickly join the queue.

What do you think would happen to the labor market for attorneys in the US? One doesn’t need professional training in economics to realize that attorneys would face an even harder time getting jobs. And that law firms and potential consumers would benefit because we could all hire legal services at much cheaper rates. Wouldn’t it be nice to be able to hire a tax attorney to do our taxes next month at cut-rate prices?

As I was flying back to Boston, it occurred to me that this is not such a crazy proposal after all. In fact, why not attach the proposal to create an A-1B program every time someone introduces legislation to increase the H-1B cap? I would love to hear the reactions from the usual suspects–e.g., the American Immigration Lawyers Association–to the A-1B program. Would it shock anyone if this was the first “more immigrants, please” proposal that they would reject outright? Maybe then we could have a real debate about the costs and benefits of the H-1B program.

UPDATE: Minutes after I put up the post, I learned from a friend that Ted Cruz had a campaign ad about what the immigration debate would look like if the newcomers were lawyers, bankers, etc. Here it is:

I really do think it would be a lot of fun to follow the debate if this type of proposal was inserted into every single bill that proposed expanding a particular type of immigration. I would love to watch the logical contortions required to explain why programmers are good, but lawyers are not.

Placing the Blame

I ran across this quote from Tony Blair earlier today and it seemed noteworthy. The ex-Prime Minister is trying to find someone to blame for the economic dislocations that immigration inevitably creates in the receiving country. And this is what he said:

The answer to someone who is unemployed in a country like mine or anywhere else in Europe, is not to blame migrants for having taken your job, [it] is to get the education and the skills necessary in order to be able to operate in the modern world.

In short, it is not the immigrants who are causing the dislocations. The fault lies with the native workers who haven’t bothered to update and upgrade their skills. All those workers at Disney displaced from their jobs: Shut up and go back to school!

I wonder if Mr. Blair would give the same advice if the immigrants had been imported under a program that only let in politicians interested in running for public office. Somehow I doubt it.

A few questions for Mr. Blair: Who will pay for that additional education? Do the benefits that immigrants generate cover these additional costs? And how exactly would this help out workers who are say in their 40s or 50s?

 

Channeling Krugman

Paul Krugman had a very interesting blog post about trade yesterday. Here’s some of what he said (but it’s definitely worth reading in full):

Much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!), vastly exaggerated claims for the benefits of trade liberalization…, hand-waving away the large distributional effects that are what standard models actually predict…The conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins…But it is fair to say that the case for more trade agreements…is very, very weak.

I sent the copyedited draft of my forthcoming book, We Wanted Workers, back to Norton a couple of weeks ago, and I couldn’t help but have a feeling of déjà vu as I read Krugman’s take on the elite argument for free trade. Sections of my book, particularly the policy discussion in the final chapter entitled Who Are You Rooting For? read just like Krugman’s post–except I need to change a word here and there. Here’s my rewriting, where I’ve underlined my changes:

Much of the elite defense of immigration is basically dishonest: false claims of inevitability, scare tactics (if you disagree, you are a racist or a xenophobe), vastly exaggerated claims for the benefits from immigration,…hand-waving away the large distributional effects that are what standard models actually predict…The conventional case for more immigration relies on the assertion that the government could redistribute income to ensure that everyone wins…But it is fair to say that the case for more immigration…is very, very weak.

We are living in interesting times indeed.

UPDATE: Some people seem to have totally missed the point of this post and interpreted it as saying that Krugman had written something similar to what I had written. Perhaps I didn’t phrase the post carefully, but that is a completely wrong interpretation. Note that I introduce the last quote in the post as my “rewriting” of what Krugman wrote. The point I am trying to make is that the exaggerations that people make in defense of trade (and that Krugman so nicely captured) are the same as the exaggerations made in defense of immigration.

High-Skill Immigration: The H-1B Program

In previous posts (here and here), I argued that we should care about high-skill immigration because of the possibility that high-skill immigrants import knowledge and capabilities that “rub off” on the rest of us, thereby increasing our productivity. I also showed that there is evidence for such spillovers in the “experimental” context (such as the sudden dismissal of renowned Jewish scientists by the Nazi regime), but the evidence is restricted to cases where the immigrants have exceptionally high skills, where there is close personal contact between the exceptional immigrants and the native workers, and where the number of high-skill immigrants is sufficiently small relative to the market.

Obviously, such flows of truly exceptional immigrants are rare. The political argument for high-skill immigration is instead presented in the context of something like the H-1B visa program, which allows employers to import 65,000 (mostly) high-tech workers annually. In the H-1B context, “high skills” typically mean that the immigrant has at least a college degree.

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High-Skill Immigration: Experimental Evidence

A couple of weeks ago I promised to summarize the evidence on whether high-skill immigration generates the productivity spillovers that would produce large economic gains for natives. I apologize for taking so long to get back to this discussion, but I have so many other projects on my plate these days that it’s hard to keep up.

By far the most convincing studies that attempt to document the existence of spillovers are those that look at natural experiments. In a series of important papers, Fabian Waldinger has looked at what happened in Nazi Germany after Hitler fired all the Jewish professors . In 1933, shortly after it took power, the Nazi regime passed the Law for the Restoration of the Professional Civil Service, which mandated that all civil servants who were not of Aryan descent be immediately dismissed. That meant that Jewish professors like John von Neumann, Richard Courant, and Albert Einstein were fired from their university posts. Many of these stellar scientists found jobs abroad, particularly in the United States.

In his 2010 JPE paper, Waldinger showed what happened to the productivity of the doctoral students stranded behind in German universities after their exceptional mentors were dismissed. The productivity of the students stranded behind in the departments most affected by the dismissals suffered. In his 2012 RESTUD follow-up paper, Waldinger looked at what happened to the productivity of the colleagues of the dismissed scientists. The surprising answer is: Not much.

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