Effects of Immigration on the Economy

Effects of Immigration on the Economy
The immigration debate in the United States can be framed in terms of “efficiency” policy and “equity” policy, or as the author of “Our View” states, “economic” and “spiritual.” Efficiency policies are those that arise from conflict between experts and the market, or when some activity causes market failure of some kind. In terms of the immigration debate, this refers to the effect that immigration has on the market in the United States, particularly the labor market and in public spending.
In his book Heaven’s Door, George J. Borjas discusses efficiency policies and market problems that may arise from immigration. While the author of “Our View” attempts to debunk the myth that wages are not affected by immigration, Borjas provides evidence that these markets are, indeed, affected by immigration. Using data from the First and Second Great Migrations, Borjas concludes that the wage gap between natives and immigrants has increased dramatically. This can be attributed to a number of different causes, including an increase in the amount of unskilled immigrants.
Likewise, the “native” wages and jobs that have been most affected by immigration are those that require fewer skills, or are occupied by high-school dropouts. Effects of immigration on native wages are particularly acute in areas of high immigration population, and among black natives. Borjas calculates that the “average” black native loses $300 in income per year due to immigration (Borjas, 1999, p. 24).
Equity policies arise from conflicts between markets and politics, and address issues such as income redistribution and externalities. While Borjas does not focus on this aspect of immigration as much, he does mention the existence of a long-term welfare problem among immigrants. In a sample period of 36 months, 12% of immigrants received welfare benefits for at least 26 of those months, as opposed to 8% of natives. Immigrants are benefiting from a redistribution of wealth in the United States. (Borjas, 1999, p. 126)
Overall, the net impact of immigration provides $10 billion to the economy each year. Depending on one’s view of the immigration debate, this could be a substantial amount, or a very little amount. Borjas concludes that much of the data concerning the impacts of immigration on the United States economy are difficult to determine and analyze. Therefore, future debates on immigration policy will be determined based on social, political, cultural, and perhaps “spiritual” arguments.

From aam28 on 2005-05-05 02:29:42 - recs (89)
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