Politico gave me the opportunity to elaborate and extend some of the arguments made in my previous post that considered Donald Trump’s proposal for “extreme” vetting of immigrants. Here is the Politico deluxe edition of the essay.
Donald Trump gave a foreign policy speech yesterday where he outlined some of his key proposals to expand the “ideological” vetting of immigrants. Here is the oh-so-serious mainstream summary of the proposals in the New York Times; and here is a better written and more insightful take by Milo Yiannopoulos.
Needless to say, the proposals immediately attracted over-the-top reactions. I knew it wouldn’t take long before somebody called them un-American, and MSNBC (of course) nicely obliged; a commentator quickly commented that “this is the single most un-American thing I have ever heard in my life.” And one of the opinionators at the Washington Post opined (and I’m only slightly paraphrasing) that Trump’s ideas were “crazier than crazy.”
…natives could have done. The demolition of the narrative that large numbers of immigrants can enter a labor market without having much of an effect on native employment opportunities continues apace.
The new paper by Christian Dustmann, Uta Schönberg, and Jan Stuhler looks at what happened in some German labor markets after the fall of the Berlin Wall. It turns out that German localities bordering Czechoslovakia were affected by a policy that allowed some Czech workers to commute to jobs in Germany, but did not grant those workers any type of residency rights. The amount of commuting was substantial, “averaging to about 10% of local employment in municipalities closest to the border.”
So what happened?
On average, the supply shock leads to a moderate decline in local native wages and a sharp decline in local native employment.These average effects mask considerable heterogeneity across groups…A 1 percentage point increase in the inflow of Czech workers relative to employment in the baseline has led to about a 0.13 percent decrease in native wages, a 0.93 percent decrease in native local employment…A 1 percentage point increase in the employment share of Czech workers decreases the local wages and employment of unskilled natives by 0.20 and 1.37 percent, respectively, but of skilled natives by only 0.11 and 0.50 percent.
Obviously, I’m not surprised by these effects. What I find really interesting, and what makes the paper important, is the conceptual analysis of how immigration jointly affects wages and employment. For reasons that we do not yet fully understand, immigration sometimes has a large impact on native wages and a small impact on native employment. And, yet, the opposite is true in other contexts. The Dustmann-Schönberg-Stuhler paper opens up new avenues for research by introducing a technical framework that should eventually enable us to get a fuller understanding of why different labor markets react differently along different margins.
The paper is forthcoming in the Quarterly Journal of Economics.
Although the official publication date of We Wanted Workers is still some weeks away, the publisher told me on Thursday that the first two copies out of the bindery had just been delivered to their office. So my wife and I jumped at the opportunity to go down to New York City, pick up the books, spend time with our kids, and have a nice family celebration (appropriately enough) at one of the best Cuban restaurants in Manhattan.
The book looks really good. I reread parts of it on the train back to Boston today, and my (non-humble) reaction was “Not bad at all.” I am sure that I’ll be blogging about the reactions from the lovers and the haters in the weeks to come.