While on the subject of immigration, I should have mentioned the superb monograph by Lant Pritchett. Lant makes an excellent case for expanded immigration in rich countries, while he makes clear that he is fully aware of the social and distributional consequences. The book is especially good in showing how labor flows have historically played an important role in income convergence within the United States. (Here is a good quiz question for the economics student: state some of the conditions under which international trade cannot, in the absence of labor flows, equalize factor incomes across regions/countries.)
Lant is a terrific economist--not just smart, but with incredible knowledge of the real world and common sense. He is one of those rare people whose work appeals to everyone who works on development, regardless of their methodological or ideological leanings. It doesn't matter if you are a micro person into randomized evaluation or a growth person; skeptical of globalization or in love with it; a hard-core economist or a management type. You simply love his work. No wonder the New York TImes Magazine is doing a profile on him and his work. Look for it. (The last economist profile the NYT has done, if my memory serves me correctly, is that of my Harvard colleague, Ed Glaeser. Lant's tastes in clothes run quite different from Ed's, so I fear he may not make as good photo material...)
Which is why I am so thrilled that Lant is returning to the Kennedy School and our MPAID program. Among other things, he will be teaching a course with Larry Summers on globalization (see what I mean?). The MPAID program is already the best program in development policy in the world, so his addition makes us, I guess, the bestest one.
Lant's and my views on immigration contrast with those of George Borjas, another colleague and outspoken opponent of expanded immigration. The Senate deal's preference for a point- and skill-based immigration policy would have pleased George, since he has been advocating for such a change for years. But I am pretty sure he will not like the temporary work program element.
Interestingly, the difference of views has nothing to do with the economics of immigration, on which I think we all agree. Expanded immigration is likely to exert downward pressure on workers' wages in the U.S. Where we disagree is on whether the gains to the rest of the world make this still a worthwhile effort (in the context, of course, of efforts to cushion the adverse effects on U.S.). As Alex Tabarrok points out in a recent post, the differences have to do with what we think is the relevant moral community for making public policy decisions. George thinks the purely national perspective is the right one, and he figures the aggregate gains for the U.S. are small relative to the distributional costs, which makes this bad policy. For my part, I believe cosmopolitan considerations should enter our calculus when the gains abroad (or to foreign nationals) are sufficiently large, which they would be with temporary labor flows. (So I am not a strict nationalist on these matters, to revert to Tabarrok's terminology.)
UPDATE: George Borjas sent me some comments, which I include in their entirety:
1. The thing I object to most in the proposal is the amnesty of 12 million illegal immigrants WITHOUT addressing the fundamental border enforcement problem. For a number of reasons (fairness, incentives), it is irresponsible to address the question of what to do with the current 12 million illegals without first resolving the issue so that we do not have to revisit this again in a few years. I have no problem with taking some sort of action that will bring the illegals "out of the shadows" at some point. But it's probably prudent to do nothing about this until we make sure that this is not a problem that will recur yet again.2. As for the guest worker program, I think that your perspective involves more than a little wishful thinking. Can you really guarantee that the guest workers will in fact be temporary workers? How are you going to get them to go back? Have you thought about how the U.S. judicial system will react to a lawsuit brought about by someone who doesn't want to get into the plane ride home? What's to prevent them from becoming illegal immigrants in the end? Think of the German experience. As a very wise person once said about that experience: "we wanted workers and we got people instead." Guest workers tend to get sick, tend to get married, procreate, etc., and all of these inevitable life events open up entitlements in the U.S. system that cannot be ignored--some of which are very costly. So your guest worker idea is, to a significant extent, a permanent immigration increase being sold as a temporary inflow. Now, you and I can debate over whether such an increase is desirable. I don't think so, but I'm willing to be convinced otherwise if you can prove to me that the gains to "us" are sufficiently large (and it is the definition of "us" that we probably disagree most about). But the debate must be conducted in a transparent and honest way: this is not really about temporary workers at all, it's really about permanent immigration. And, again, because it is people we are importing--not just workers in a widget factory--there are non-economic issues that cannot be ignored (culture, language, security, etc.) unless you are proposing that the guest workers be packed away in some warehouse from the day they arrive until the day they are shipped back home.3. I'm glad to hear you and I agree on the underlying economics--there are downward pressures on wages. I don't know if Lant would agree--I saw him give a talk in Milan the other day and a big bullet in the PowerPoint was: no evidence of wage effects! It's funny how people (on both sides of the political divide) are willing to put aside the elements of supply and demand when they want to argue for open labor flows.4. The point system is great. I would love to think that, at last, someone paid attention to something I said! But I doubt it.GeorgePS. One of these days I will have to talk to you about your blog. I've been thinking about doing it for some time but I'm afraid it would just eat up all my time. I'd love to ask you how things are going and how you got started.
My main response to George is that I do take the temporariness of the "guest" worker program seriously. I would say that other such programs, such as the German one that George mentions, may have had "guest" in their title, but actually had neither carrots nor sticks in place to ensure return migration. I do agree with him that without such incentives, this would turn into a permanent scheme, and my enthusiasm level would go down a couple of notches.
And those of you who want to see a George Borjas blog, do give him a holler of encouragement...