The Wall Of Peace

I took a trip to the Red Bloc, and I don’t mean Texas and the South, after I finished college. I mean the old Red Bloc, specifically the Soviet Union and East Germany. I was very curious to find out if my childhood memories of communist life were a figment of my imagination, or if that life was indeed as I remembered it. For the record, what I saw in the Soviet Union and East Germany, and particularly a very memorable trek across the Berlin Wall, more than reinforced my pre-existing impressions.

My wife and I are thinking of downsizing and while rummaging through old boxes and lots of old junk, I came across this tourist guide that I purchased in East Berlin back in the early 1970s. I thought the book had been lost long ago in one of my many moves, but somehow it survived all the way to today.


I specifically remember this book because it was where I first found out that travel between East and West Berlin had not been restricted prior to the building of the Berlin Wall on August 13, 1961. I ended up using this very interesting fact in We Wanted Workers to illustrate the sizable “cost” that influences the migration decision. There was little reason for most East Germans to remain behind the Iron Curtain when all it took to escape the poverty and oppression was a cheap subway or train ride from East to West Berlin. And yet fewer than 15 percent of East Germans chose to move.

Rereading the brief socialist history of East Berlin (and the German Democratic Republic) in this tourist guide is very eye-opening. Unfortunately, the propagandist style seems faintly familiar and brings to mind how the mainstream media writes about many politically charged topics today. I thought this passage was particularly interesting, and I really like the reference to “experts” to quantify the costs and benefits.


West Berlin became the cold war stronghold of the imperialists against the entire socialist camp…In West Berlin, more than 80 centres for agents and espionage were established which were intended to disturb the construction of socialism in the GDR. The American radio station RIAS and the western press poisoned the atmosphere, creating unrest against the population through hate propaganda and deliberately set out to entice scientists and specialists away from the GDR…

The hate campaigns of the press, the enticement and the acts of sabotage increased. The “Cold War” threatened to become a “hot war”–the third World War…On 13 August 1961 the GDR, through the action of the National People’s Army and the workers’ militia, overnight secured its borders also towards West Berlin…To make it quite clear to any aggressor that the border to West Berlin is a state frontier, the workers have made it well discernible by the anti-fascist protective wall…

According to expert estimates, the GDR lost 100,000 million marks through the open border, money which otherwise could have been used for construction work. The closing of the border brought an immediate and discernible easing. With new vigor, the Berlin working people started constructing their capital.

And that is how the “Wall of Peace” came about.



Chinese Graduate Students And The Productivity Of Their Advisors

Kirk Doran, Ying Shen, and I have just finished the final draft of our paper that looks at how the increase in the number of Chinese graduate students affected the productivity of their advisors in American universities. I can’t believe it’s been 9 years since Kirk and I met and began to collaborate on what turned out to be a very productive research project that examined various aspects of the productivity of professional mathematicians. (See here,  here,  here, and here, for some of the papers we’ve already published).

The Cultural Revolution destroyed the Chinese higher education system and China sent few students to doctoral programs abroad during those years. There was a pre-existing body of Chinese-ethnic scientists in the United States, but the flow into this group was virtually halted. After 1978, Deng Xiaoping’s reforms encouraged Chinese students to acquire their graduate training in Western universities. This policy shift led to a huge increase in the number of Chinese students studying in doctoral programs abroad, and particularly in American universities.


Our paper measures the impact of this supply shock on the productivity of their advisors in the discipline of mathematics, and the figure neatly summarizes our key findings. The number of papers published by American advisors with Chinese ancestry increased substantially after the opening up of China. Because of “ethnic complementarities,” a tendency for the Chinese students to be mentored by Chinese-American advisors, the supply shock opened up many new sources for research collaboration for these advisors, resulting in more published papers.

The supply shock also affected the American advisors who did not have Chinese ancestry. The relatively fixed size of mathematics graduate programs virtually guarantees that American graduate students were crowded out by the Chinese students. The departments that attracted most of the Chinese students were ethnically “mixed” departments–a  Chinese-American mathematician was present in the department actively advising students prior to the opening of China. There was an obvious drop in the productivity of the American (i.e., non-Chinese) advisors employed in the mixed departments most affected by the supply shock. Those advisors experienced a decline in the number of students they mentored and in the number of papers they published.

The lesson is obvious, but worth emphasizing repeatedly. As is typical with supply shocks, there are winners and losers. In fact, there are winners and losers even when there are very sizable ethnic complementarities that benefit a particular segment of the scientific workforce.

The paper is forthcoming in the Journal of Human Resources.

Cato On Mariel

The Cato Institute’s Alex Nowrasteh posted a very interesting piece that reproduces and expands the findings in my Mariel paper. Although the title, “The Mariel Boatlift Raised the Wages of Low-Skilled Miamians,” is very misleading (making it a good example of Cato publicists gone wild), I actually liked the essay and recommend it to anyone interested in the subject.

My paper showed that the wage of high-school dropouts fell significantly after Mariel, but recovered by 1990. Here’s the graph that goes with that conclusion (where the shaded area indicates the margin of error):


In early drafts of my Mariel paper, as well as in We Wanted Workers (Figure 7.5 on p. 148), I documented that the wage drop was not experienced by high school graduates, the group of workers on the next rung up the skill distribution. In contrast to the dropouts, high school graduates actually saw their wages rise. Here’s the graph from my book:


A few months ago, Joan Monras and I followed up on this insight to document a pattern common to many refugee supply shocks: refugees have harmful wage/employment effects on the workers that they most resemble, but beneficial effects on the workers that are different.

Nowrasteh’s conclusion that “low-skilled Miamians” gained comes about because he pools the two groups of workers (high school dropouts and high school graduates) into a large “low-skilled” workforce, and he shows that the wage of the average worker in this group increased as a result of Mariel. He concludes: “The Marielitos redistributed wages from dropouts to workers with only a high school degree with a net positive effect on all low-skill workers.”

The exercise illustrates two very important points that Nowrasteh does not emphasize. First, it shows just how easy it is to hide the adverse wage impact of immigration by redefining skill groups. This is a trick that, unfortunately, is used much too often to “prove” that immigration is good for everyone. As I wrote in We Wanted Workers (p. 196): “The more one aggregates skill groups, the more likely one hides away the specific group of affected workers–making it harder to document whether immigration made anyone worse off. The more laser-focused the group of native workers examined, the easier it is to detect that immigration affected the targeted group.”

Second, Nowrasteh (perhaps unwittingly) blows up the cornerstone underlying the Card-Peri argument that immigration has not made low-skill Americans worse off. That cornerstone is the assumption that high school dropouts and high school graduates are productive clones (or “perfect substitutes”). That assumption is what gives the researcher “permission” to pool those two groups. Because there are many fewer dropouts, the wage trend will essentially reflect whatever happened to the wage of high school graduates.

Nowrasteh’s documentation that Mariel had very different effects on high school dropouts and high school graduates flatly contradicts the assumption that the two groups are productive clones. If the two groups were clones, they should have reacted in exactly the same way to Mariel. But they didn’t. Instead, they are complements, implying that the two groups should be studied separately. Those who buy into the Card-Peri argument need to go back to the drawing board if they want to salvage the conclusion that immigration didn’t really harm the least skilled Americans.

Profile in The American Conservative

Robert VerBruggen just wrote a very interesting, and quite insightful, overview of my work and We Wanted Workers for The American Conservative. I spoke to him just three days after the election, and probably rambled a lot about the surprise outcome. So I’m certainly grateful he was able to somehow weave those ramblings within a long essay that gives a coherent description of my research.

I was particularly impressed by his observation about my place in the academic community, because it certainly strikes a nerve.

It is hard to call Borjas an outsider…He publishes in the best journals, presents his work at leading academic conferences, is consulted when major scientific organizations…summarize the state of knowledge in his field. But it’s equally hard to say he fits in.

Where Did 2.5 Million Native Working Men Go?

I worked on the revision to my paper on the labor supply of immigrants earlier this month. I also played around with the data some, and was struck by the substantial rise in the number of prime-age native men who do not work at all during an entire calendar year.


The graph uses March CPS data and shows the trend in the percent of men who did not work at all during the calendar year prior to the survey. It is obvious that there was a substantial increase in the fraction of “permanent” joblessness after the Great Recession. Although there has been some recovery, the situation is still dismal for many. Just compare the data for 2000 and 2016: In 2000, 8 percent of prime-age men didn’t work at all. Today, that number is 13 percent. There are about 50 million men in this age group, so that around 2.5 million prime-age men have joined the rank of permanent joblessness since 2000.

It would be a mistake to interpret the graph as suggesting a causal link between immigration and the dramatic rise in permanent joblessness among native men. But the data clearly suggest that if one wishes to understand the economic dissatisfaction that motivated a lot of the political action this year, this graph would not be a bad place to start. It may be that: “It’s all jobs, stupid.”

The very simple STATA code that generates the graph follows, so reproduce to your heart’s content.

Continue reading “Where Did 2.5 Million Native Working Men Go?”

Carrier And Comprehensive Immigration Reform

There’s been a lot of criticism from free-market types since President-elect Trump announced the Carrier deal, which will keep around 1,000 jobs in Ohio Indiana (see the Larry Summers take here). Some of that criticism is warranted–in an ideal world, it would indeed be ideal to let the market decide who the winners and losers are. But there is also a lot of hypocrisy in many of the over-the-top reactions.

As an obvious example, I don’t recall much hand-wringing about the excessive labor market manipulation built into the comprehensive immigration reform legislation that President Obama and Senators Schumer, Rubio, et al, tried to ram through Congress a few years ago. So I thought it’d be fun to illustrate just how visible the invisible hand became in that context.

This screenshot is from bill S.744, describing job categories to be covered by a proposed “agricultural worker program.”


And this screenshot is the section of the bill stating what the salary must be for such jobs–down to the penny and year by year.


It seems to me that if the objective is simply to criticize government intervention in the labor market, the comprehensive immigration reform legislation would have provided ample opportunities. Do we really need Stalinist five-year plans stating precisely what the wage rate must be in particular occupations?

Which brings me to a related question: Who paid whom to get those hourly wage rates written into law?