Thursday, April 14, 2011

Gaming Immigration

. Thursday, April 14, 2011

Gary Becker thinks we should charge immigrants $50k (on loan, if necessary) to come to this country. Via Adam Ozimek, who loves it. This baffles me. Becker is obviously a brilliant guy -- winner of both the John Bates Clark medal and the Nobel Prize -- and Ozimek's no slouch. So why don't they understand that the political opposition to increased immigration is centered on "illegal" immigrants? These immigrants are highly price-sensitive, do not earn high wages, are not deterred by formal requirements and have little problem avoiding them. Becker argues that many illegal immigrants will become normalized if given this path, but why should they? Under the status quo they can usually stay for free, and getting here costs much less than $50k. So who do they think is going to pay this $50k?

Perhaps highly-skilled workers, but they are more likely to have access to normal (read: free) immigration mechanisms anyway. Yes, we issue far too few H1B visas, but skilled labor will generally be more abundant in the US than where many of the immigrants come from; making the scarce factor (in their home country) pay to face more competition is generally going to be a self-defeating policy. Arguably we should be subsidizing these immigrants rather than the other way around.

This strikes me as a first-best-world policy recommendation that simply cannot work. Moreover, the prerequisites for it to work would be suboptimal relative to the status quo. It would require a tighter control on immigration than we have at present, and the tighter control is suboptimal on egalitarian and probably efficiency grounds, and so negates any possible benefits from the immigration-license system Becker proposes. On the fiscal side these benefits would be negligible at best. As a deterrent they would be detrimental.

The best (realistic) course of action from the perspective of the immigration advocate -- which Ozimek is, as I am and I believe Becker is -- seems to be a policy of benign neglect. We don't explicitly encourage illegal immigration, but we don't do much to stop it. We let demagogues make political noise about keeping the illegals out, but don't let them follow through. That doesn't work when Arizona goes nuts, but it does when we need to knock down the immigrant-bashing bill du jour.

4 comments:

Emmanuel said...

So Becker has taken this shtick to the UK. It's pretty old as I posted about it two years ago, but maybe pervasive anti-immigration sentiment here will make the UK more fertile ground.

Adam Ozimek said...

You are ignoring many costs and benefits of becoming normalized. I don't have the numbers at hand, but even the poorest immigrants earn a significant wage premium by becoming normalized. Furthermore, once normalized they no longer have to live under the risk of being deported and possibly separated from their families. This allows them to make long-term investments that they otherwise would less likely to, like going to college or buying a house. Importantly, they don't have to risk life and limb to cross the border.

Another important point missed by critics of plans like this is that unlike the current regime, this allows charities and other groups to buy citizenship for those who can't afford it. Alternatively, groups could offer interest free subsidized loans. None of these are currently an option.

Kindred Winecoff said...

Adam, there are some benefits from normalization. I am sure that they are quite large. But that doesn't change the fact that deportation is incredibly rare for non-criminals, and children born in the country are normalized for free. The fee actually increases the risk of deportation: those who has paid have a strong incentive to rat out those who haven't (to enhance the value of their investment), and the average citizen will spare no quarter for someone with an "easy" path to normalization.

Many immigrations come and go. They work for a season, then go home. They work for a year or two, then go home. This doesn't help those people, and in fact encourages multiple groups to crack down on them. Perhaps charities could get involved here, but what charity will be able to afford many of these? $200k for a family of four is not cheap. Even the most generous college scholarships only sponsor a handful of people a year, and the scholarships aren't generally anywhere close to that large.

I can see a situation in which the Mexican government starts buying these for their citizens. But can you imagine the US political response to *that*?

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