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Ten years hence

The Economics of Immigration and Immigration Policy

March 14, 2008

On March 14, 2008, George Borjas, professor of Economics and Social Policy at Harvard University's John F. Kennedy School of Government, presented, "The Economics of Immigration and Immigration Policy," which contained the following excerpts:

  • Since 1965, the Family Preference System has been the basis for immigration into the United States. The system allows legal immigrants to sponsor the entry of their relatives, including siblings. Of the 4 million people admitted from 2000-2004, about 2.5 million had family preference visas.
  • The result of the Sibling Preference category – known as the Family Fourth Preference Visa category – is that the number of people eligible for legal entry has expanded exponentially, leading to long queues of applications dating as far back as the 1980s.
  • Granting blanket amnesty to illegal immigrants in the country now essentially means rewarding people who cut around these lines of legal entry, which in turn does not reduce the incentive for entering illegally.
  • A relatively small number of visas are employment- or school-based. The 5 million employment-based visas issued from 2000-2004 includes not just the skilled people themselves, but the skilled people's spouses and children. Therefore, the actual number of immigrants entering each year due to skills is quite small.
  • Illegal immigration is rising at historical record-high rates. An estimated 11.6 million illegal immigrants were living in the United States as of January 2006, compared to 8.5 million in 2000.
  • Fifty years ago, the typical immigrant earned about 7 percent more than the typical U.S. citizen with similar skills and education. Today, the average immigrant earns about 20 percent less than the average U.S. worker. This wage differential is one of the factors driving much of the current debate over immigration.
  • In the long run, people most affected by immigration – mainly high school dropouts – will have 5 percent lower wages. People not affected by immigration – the middle- and upper-skill levels for the most part – will gain in earnings because more capital will flow to them.
  • Therefore, one of the key economic lessons about immigration is that it has a redistributive affect on earnings. Employers gain substantially from immigration due to the reduction in wage.
  • These statistics do not, however, dictate a certain immigration policy, despite the current public debate that says otherwise. The reason is that policy decisions imply the application of values or moral choices to achieve a certain effect. The numbers are value-neutral.
  • All the economic and social factors currently discussed in relation to immigration policy will pale in comparison if there is a really serious national security event linked to immigration..

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