Benefits of Immigration and Migration

By Kindred Winecoff

The benefits of migration are significant for both the sending and receiving countries, according to a new NBER paper (via Blattman, who has a link to an ungated version). From the abstract:

We find that immigration increases employment, with no evidence of crowding-out of natives, and that investment responds rapidly and vigorously. The inflow of immigrants does not seem to reduce capital intensity nor total factor productivity in the short-run or in the long run. These results imply that immigration increases the total GDP of the receiving country in the short-run one-for-one, without affecting average wages and average income per person.

How is this possible? Perhaps think of potential immigrants as unemployed-natives-in-waiting. Migration allows them to find and fill jobs that would not otherwise exist, thus boosting output without having adverse effects on native workers. In other words, think of migration functioning as in-sourced entrepreneurship. There is no output loss from the sending country because that labor was un- or under-employed anyway.

This effect is not limited to the U.S. or Europe -- the paper covers 14 receiving countries in the OECD, and 74 sending countries -- but perhaps it is limited to capital-rich, post-industrial countries that can benefit from an influx unskilled laborers. Still, if the result holds up this study to future study, it may have powerful implications for policymakers in developed and developing countries.

Comments

[davesilb:]

You don't need to give facts when God gave you a brain to look around and observe. Facts can be distorted any way you want. If you could not agree or see that what was spoken above to be mostly facts you are a little short on the brains department!!


On Apr 09 09:31 AM lostark98 wrote:

> I would like to propose that those who have made comments provide
> supporting data for their comments. I see no concrete information,
> just a lot of opinion. Perhaps the study being discussed is flawed,
> but I have not read any plausible counter-argument that is supported
> by facts. All I am getting from the comments is conjecture, opinion,
> and lots of hyperbole.
>
> I know this is a great forum to express opinions, but without some
> substance behind the rhetoric none of this advances the discussion
> of an important issue. It just provides more heat to inflame differing
> views.

Apr 09 12:14 PM

[Neil459:]

Well, facts cannot really be distorted. However, lots of information posed as facts by journalists, academics and other authority figures are in reality just biased information of little value let alone truths. We do not teach young people how to distinguish between these pseudo facts and real facts. Hence the popular attitude that facts can be distorted and that statistics can prove anything. Looking at one of the the paper's conclusions, for example, "We also show that those immigration reforms that made entry laws more restrictive were effective in reducing migration flows by 6%, on average, for each reform" "For each reform"? How does an average per reform provide any real value or have any real meaning. It does not and this paper is full of other academic smoke and mirrors. These papers get published because it supports the Academic political view.


On Apr 09 12:14 PM davesilb wrote:
> You don't need to give facts when God gave you a brain to look around
> and observe. Facts can be distorted any way you want. If you could
> not agree or see that what was spoken above to be mostly facts you
> are a little short on the brains department!!

Apr 09 12:55 PM

[Neil459:]

Oh, I forgot, following on from the conclusion mentioned in my post above, all we have to do is pass 10 reforms and it would reduce immigration by 60%. If we take it further and pass 20 reforms then we will have reduced immigration by 120%. What does that mean?

Apr 09 12:58 PM

[nova:]

"Social science" very often uses fraudulently manufactured data. Why? Just to support their own purposes and agendas.

After all, too often "social science" has nothing to do with science at all. It is just a propaganda in disguise.

As for our president, since our great country and its economy are so healthy and prosperous, he is thinking about sharing some our wealth and prosperity with uninvited guests. Why not? After all, they can illegally vote for him in a future as good many of them have done it in the past.

Apr 09 01:23 PM

[Chancer:]

Immigration, yes, as long it is legal, managed, and controlled. All of the arguments that favor illegal immigration are only "slogans"- most of it by those who favor open borders and believe that the U.S. should absorb the poor of the whole world even if the standard of living of U.S. citizens is driven down bigtime.

When you analyze the details, the cost of illegal immigration hurts all citizens:

1- Don't take jobs from Americans? Just look at how illegals took away the jobs in construction, food service, and hospitality (hotels).

2- Pay their taxes? With the Soc. Sec. # of a U.S. citizen causing them problems with IRS.

3- Give us cheaper farm produce? Without cheap labor, farmers would mechanize yielding higher paid American jobs to make and operate farm equipment.

4- Don't cost taxpayers? Healthcare in emergency rooms. free education for their kids, fill up our prisons with violent criminals, deaths and higher auto insurance costs crowding our freeways with illegal drivers without insurance.

And when the liberals give citizenship to illegals (and they will), and free Social Security and Medicare (no PR tax for those below the poverty line), and welfare, they will eventually have enough votes to require all of us to support them instyle for life.

Apr 09 03:14 PM

[manya05:]

I find it amazing that when a post like this at SeekingAlpha goes up (with or without real data), rather than having a discussion about immigration/migration and their effects on the economy, what we get as comments is a lengthy list of rants about illegal immigration (which is not mentioned once in the article). The forum then becomes a cesspool of xenophobic diatribes. Let me then try (at least try) to redirect the discourse with this question: If global trade is good in general (is it?), why grant free passage across borders to capital and goods, but not the labor force? I think this is a question worth pondering about as the world population of "migrants" and "ex-pats" continues to explode (like it or not....blame those damn airlines... and global trade).

Apr 09 03:37 PM

[Liquid Fusion:]

If America is attacked, where do illegal aliens place their alliegence?

Will Barrack Obama please show his birth certificate? A certification of live birth is not the same thing. The latter ca be sent in up to a year after birth. The former is made the moment the newbord is in the presence of a doctor who delieerd the child.

What if President Obama is an illegal alien?

President Obama had several fathers. His first father (DNA test please) was from Kenya: British colony at the time Obama was born. This makes Obama a dual citizen - not eligible for the Presidency. When Obama returned to the US from Indonesia, where his second father made him an Indonesian citizen, did he re-affirm his US citizenship? Wouldn't it be the pot calling the kettle black: an illegal wanting to let other illegals in for free as well!!!

Diluting down the culture and ability for founding citizens to live and prosper eqiuals an overthrow of this nation. Americans have had manufacturing driven down to very poor levels: almost vanish. Open borders brazenly flaunt laws. Jobs are easily exported overseas: this week IBM hired 70,000 persons in India. Last week IBM fired 5000 workers in the USA. Here jobs are reduced in the USA causing the friction between illegals and US Citizens to increase when work is almost non existant.

The real persons of interest here are Kissenger, Brezinski, Soros (Obama's mentor / financial backer) - people who all want America as we know it changed: the New World Order. Illegal immigration is but one factor of their agenda who's object is destroying and breaking down the United States of America.

Apr 09 03:50 PM

[tonym:]

<< The cost of dealing with this problem far outweighs any negligible benefit as referenced above. >>

Healthcare costs are significantly impacted by this segment.

Apr 09 05:10 PM

[Neil459:]

manya05, you have to ask what was the purpose of the article? The conclusions were common sense if they only applied to legal immigration and would provide no new info. The quantitative data was suspect as it leaves out other rational explanations for the results and in particular the sole relationship between GDP and immigration. The article could have had only two purposes; to get a grade from a liberal professor and to justify illegal immigration. There is no need to justify legal immigration as it is controlled so as not to effect the economy. The major finding in this paper is that it does not effect the economy. Wow! So this paper could only be about justifying illegal immigration or making all immigration legal.

On Apr 09 03:37 PM manya05 wrote:
> I find it amazing that when a post like this at SeekingAlpha goes
> up (with or without real data), rather than having a discussion about
> immigration/migration and their effects on the economy, what we get
> as comments is a lengthy list of rants about illegal immigration
> (which is not mentioned once in the article).

Apr 09 05:35 PM

[H. T. Love:]

Living in a town near the author's, and being aware of recent "activist" efforts from that town and locally to support illegal aliens (via attacking the 287g program which funds and trains the local law enforcement to apprehend, process and hold illegals for ICE deportation), I suspect that the study cited was chosen, from many available, to support a particular view.

Nothing wrong with that - we all argue our own views. So do your DD.

Personally, I would like to see the 287g abolished. Civil enforcement organizations are not supposed to be minions of the federales. Our local law enforcement has lied about profiling and numbers to appear to be the good guys. That happens when you suck the federal teat.

I'm with the poster above: allow legal immagrints to go through the long-standing process which includes learning the language (except in California - no need to learn the language there because the "feel goodies" are more comfortable easing the alien burden at the expense of others).

My wife immigrated from a South American country and she had no problem obtaing citizenship legally about 20 years ago.

As to the author's assertion about the effects on GDP and local work forces, I can agree on GDP. Labor, skilled and unskilled, obtained at less cost is an efficieny gain. The locals displaced go onto public coffers, for awhile if lucky, and to (probably) lower-paying jobs. If in their area of expertise, we now have an additional efficiency improvement. Etc, etc., etc.

Regardless of anything, legal immigration, which served this country so well for so long (primarily because the immigrants *wanted* to "assimilate" and so learned the language, cultures, etc.) should be supported and encouraged, with reasonable limits to minimize severe displacement of local work forces. I don't care if business is more efficient or not if it imposes a major hardship on (a large number of) my neighbors.

It's sad that the greatest beneficiaries of the benefits of this country have no feeling of obligation to balance good citizenship behavior and maximizing profits. I don't know if it's the shareholders, the boards, the CEOs or just the way our culture has evolved.

But it sucks.

A recent example is the public disclosure of thousands of H1B applications by American businesses to bring in a large force of labor form other countries. *Many* of these were banks various types of financial institutions. Since the H1B is intended to provide skills not readily available locally, I was aghast! Did all those folks canned since 09/08 commit suicide? I could see no other way that those skills would not be "locally" available.

My Humble Opinion
HardToLove

Apr 09 06:02 PM

[LSSJR:]

what a load of bs

Apr 09 08:56 PM

[LSSJR:]

what a load of bs

Apr 09 08:56 PM

[a. palmer jr.:]

Another problem I see with illegal immigration is that in the future we are going to have to cut back on legal immigration or we're going to (already have) too many people for our infastructure to handle. So instead of our usual quota of law-abiding future citizens we are having people sneak into the country who do not intend to learn the language, pay taxes, or abide by our laws. Much of our law enforcement people only want to deport illegals when they have committed additional crimes. Yes, illegal immigration is a crime and should be punished.

Apr 09 11:05 PM

[I am not a ...:]

Australia and New Zealand have been mentioned. What was not mentioned is that Both countries have severe regime of punishment for illegal entry including deporting anyone who is not a citizen and is convicted of a crime. It is not unusual for persons who were forced migrants to Australia as children from Barnado's ( and others ) in the UK in the 1940-60's to be deported after serving prison time... Picture middle aged persons returning to a country they may never have seen since they were babes in Arms,some not even speaking the language such as Croation,Serbian,even French.
Migrating to Australia is especially difficult and all skilled entry visa's are no longer issued.
New Zealand allowed in so many Chinese unskilled persons on a family reunion basis that entire townships are little enclaves of China.
With so many Shrilankans living there it makes you wonder if any are still in Shrilanka.
None support the country to which they have moved to with obviuos cultural problems appearing.
Australia too bought in 3000 African Migrants from the horn of Africa per year.
Many had only ever lived in Refugee camps,but because of the strict religious tennents they observe ,very little assimilation into Australian culture happens. Most 'native' Australians have only ever come into contact with an African when they drove their cab.
Illegal entry is attempted on a daily basis as people smugglers take advantage of weak government policies regarding patrolling the waters to our North as folks from as far as iraq attempt to sneak in undetected into the Empty north of Australia. We have our own little Gitmo on Christmas Island where such people are kept,away from the mainland in defiance of the UN Charter of Human rights which says anyone seeking asylum must be granted such asylum. There is only one way to deal with such issues and that is a firm hand and a deaf ear to screams from the bleeding hearts.

Apr 10 12:17 AM

[Liquid Fusion:]

Kindred Winecoff wrote:

<<The benefits of migration are significant for both the sending and receiving countries…

We find that immigration increases employment, with no evidence of crowding-out of natives, and that investment responds rapidly and vigorously……

The inflow of immigrants does not seem to reduce capital intensity nor total factor productivity in the short-run or in the long run. ……

These results imply that immigration increases the total GDP of the receiving country in the short-run one-for-one, without affecting average wages and average income per person.>>

Fact: You can’t talk about immigration in America without including illegal aliens that constitute the majority of immigrants in the USA. Doing this, you need to add in the extreme social cost of: jails, medical emergency room treatment, bi-lingual schools, and welfare that support uneducated aliens.

Fact: California, Colorado and NY are all going broke supporting illegal aliens!!!

Apr 10 03:17 AM

[41justice:]

My spouse was a legal immigrant and subsequently became a naturalized US citizen. All of her siblings except one also immigrated to the US and most have become naturalized US citizens. Virtually all have at least a BA or MS. They do very well here and are better citizens than most natives. It is difficult for them to understand why we extend so many benefits to immigrants who have never worked in the United States, much less give so many benefits to those who are here illegally.

Every illegal immigrant working in the US takes away an opportunity for a US citizen. Forget that baloney about jobs that citizens won't do. Often it is because that an illegal will do it for less, the wages at present are less than welfare. Remove the illegals and the wages will go up.

I volunteer in schools and hold a graduate degree. I do not blame children for the actions of their parents and want every child to suceed. I observed that children of illegals are less likely to stand for the pledge alligence. I also find that after learning English, many children of illegals, while in elementary schoool, out perform natives, expecially minority natives. Middle school begans a decline often resulting in dropping out by high school.

I would like to see illegal immigration stopped. I realize that they are not only from South Americal, but China, Eastern Europe, Hati, India, Ireland, Africa and other places where government policies and corruption keep most of their citizens poor and often oppressed.

We should provide for our own people first. I am all for working to encourage oppressive and corrupt governments to adopt policies which will help their citizens to develop economically and politically. Freedom to own land and to engage in business is a must.

Apr 10 08:43 AM

[gotnochips:]

I wonder why the title of this piece wasn't, Benefits of LEGAL Immigration and Migration.

Apr 10 12:45 PM

[stefalb:]

It's frightening to see this much fear and misunderstanding. The US population has grown by 23% between 1980 and now. Mostly by immigration. This population grown was one of the most important factors behind the economic success in the US. Without this strong population and employment growth, white geezers, with their immigrant heritage, would have had funding problems of their entitlement programs a long time ago. The housing market would have also tanked a while ago. Immigration might not be very beneficial in the first generation but with the 2nd generation it starts to be very beneficial. Just have a look at Japan and you can see the difference. Japan has very restrictive immigration and a rapidly aging population. It also has had economic problems for the last 20 years. The economic peak coincided with a peak in the productive population. Declining populations translate into declining economies. Restrictive immigration in the US over the last 8 years also contributed to the housing slump. Arizona with a very restrictive employment policy being among the hardest hit states. Sometimes I wish ignorant people would get what they are asking for but the problem is that everybody else would suffer, too!!!


On Apr 09 03:50 PM Liquid Fusion wrote:

> If America is attacked, where do illegal aliens place their alliegence?
>
>
> Will Barrack Obama please show his birth certificate? A certification
> of live birth is not the same thing. The latter ca be sent in up
> to a year after birth. The former is made the moment the newbord
> is in the presence of a doctor who delieerd the child.
>
> What if President Obama is an illegal alien?
>
> President Obama had several fathers. His first father (DNA test please)
> was from Kenya: British colony at the time Obama was born. This makes
> Obama a dual citizen - not eligible for the Presidency. When Obama
> returned to the US from Indonesia, where his second father made him
> an Indonesian citizen, did he re-affirm his US citizenship? Wouldn't
> it be the pot calling the kettle black: an illegal wanting to let
> other illegals in for free as well!!!
>
> Diluting down the culture and ability for founding citizens to live
> and prosper eqiuals an overthrow of this nation. Americans have had
> manufacturing driven down to very poor levels: almost vanish. Open
> borders brazenly flaunt laws. Jobs are easily exported overseas:
> this week IBM hired 70,000 persons in India. Last week IBM fired
> 5000 workers in the USA. Here jobs are reduced in the USA causing
> the friction between illegals and US Citizens to increase when work
> is almost non existant.
>
> The real persons of interest here are Kissenger, Brezinski, Soros
> (Obama's mentor / financial backer) - people who all want America
> as we know it changed: the New World Order. Illegal immigration is
> but one factor of their agenda who's object is destroying and breaking
> down the United States of America.

Apr 10 02:32 PM

[Jack Kinch(...:]

We can not afford the huge cost of crime and welfare even if we wanted these people which we don't.
We are almost hopelessly in debt. We have twice as many people here as we would be best off with. We should never have used our taxes to breed millions on welfare. You want more? I can't believe anyone would be so stupid. More would be more crime, more users of oil and fresh water,more road rage, nothing but bad.

Apr 10 03:47 PM

[Jack Kinch(...:]

Drinking with a Redneck Girl

A Mexican, an Arab, and a redneck girl are in the same bar.

When the Mexican finishes his beer, he throws his glass in the air, pulls out his pistol, and shoots the glass to pieces. He says, 'In Mexico , our glasses are so cheap we don't need to drink with the same one twice.'

The Arab, obviously impressed by this, drinks his beer, throws it into the air, pulls out his AK-47, and shoots the glass to pieces. He says, 'In the Arab World, we have so much sand to make glasses that we don't need to drink with the same one twice either.'

The redneck girl, picks up her beer, downs it in one gulp, throws the glass into the air, whips out her 45, and shoots the Mexican and the Arab. Catching her glass, setting it on the bar, and calling for a refill, she says,

'In America we have so many illegal aliens that we don't have to drink with the same ones twice.'



' God Bless America '

Apr 10 04:00 PM