Monday, August 30, 2010

Why Immigration Matters

. Monday, August 30, 2010

Giovanni Peri at the San Francisco Fed has a new economic letter summarizing research he's done on the effects of immigration. Here's the summary:

The effects of immigration on the total output and income of the U.S. economy can be studied by comparing output per worker and employment in states that have had large immigrant inflows with data from states that have few new foreign-born workers. Statistical analysis of state-level data shows that immigrants expand the economy's productive capacity by stimulating investment and promoting specialization. This produces efficiency gains and boosts income per worker. At the same time, evidence is scant that immigrants diminish the employment opportunities of U.S.-born workers.

In other words, allowing more immigration would be good for domestic workers, as well as for immigrant workers and domestic consumers. Sounds like a win-win, no? As Felix Salmon puts it:

Never mind the stimulus vs austerity debate: here’s something that both sides should be able to get behind. It’s a simple legislative fix which increases tax revenues without raising taxes; which increases the demand for housing; which increases the economy’s productive capacity; and which boosts wages for American workers. It’s about as Pareto-optimal as legislation gets. So let’s open the borders, and encourage much more immigration into the US!

Not to mention helping to restore the solvency of entitlement programs, providing aid to poorer countries (via remittances), and improving overall political and economic liberty. So, of course, instead of doing it we're passing repressive laws that may violate international human rights law while refusing to even consider immigration reform until next year at the earliest. This policy is not only unjust, it is stupid. It is cutting off our nose to spite our face, shooting ourselves in the foot, and other fill-in-the-blank cliches about wrong-headed, self-defeating policies.

We should be doing more to encourage people to come and work in this country. It enriches us, them, and those they leave behind. We're losing a remarkable opportunity. It's shameful.


Why Immigration Matters
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