Some unpleasant arithmetic for anti-immigration advocates

YouNotSneaky asks us to make explicit our moral trade-off between natives' and foreigners' well-being: 

Let's put on our annoying-economist hat and consider the question; if you consider a foreign national to be only 1/2 a human being (alright, alright, only 1/2 as "important") as a native citizen, are you justified in opposing immigration? After all, it takes a real jerk to argue that foreign people's welfare should not count at all. Suppose the foreigners are only 1/10th as important? Surely, if natives' welfare counts for ten times as much as that of foreigners, we would be justified in banning immigration since it may adversely affect the wages of the unskilled in US? Well, let's see...

The bottom line is that under plausible assumptions about the rate at which marginal utility is diminishing, one would have to consider the welfare of the native worker to count 20 times or more as much as that of the potential migrant. The main driver of this result is that the gains to the migrant are huge (in view of the wage differential here and abroad) relative to the estimated wage loss for natives.

It is possible to quibble with some of the background assumptions behind this calculation, but I believe the basic message is correct: given how restrictive our current regime is, some relaxation in these restrictions provides huge benefits to migrants relative to distributional effects at home.

UPDATE: Borjas elaborates further on his thoughts on guest workers.

Comments

[Luke Lea]

I am glad to see an economist explicitly admit that he is thinking about the welfare of the citizens of other countries rather than his own when he advocates immigration. However, this still leaves unanswered a couple of questions: does immigration from poor countries help the people who are left behind? And is it right to hurt the least well off in a rich country with a "charitable" policy that actually benefits the most well-off. It smells of self-serving hypocracy and short-sightedness, especially when you consider that the gains of trade are sufficient (with income redistribution) to make everyone in the rich country better off. If protectionism returns to the U.S. economists may have only themselves to blame.

[Kristian Koerselman]

It is very hard to be against immigration when you think rationally about it (unless, of course, you are the kind of European who believes that a homogeneous society is necessary to maintain the high tax levels needed for a welfare state). Sadly enough, immigration policies are often based on gut feelings, not rational thought.

[alex]

Taking into account the diminishing marginal utility of income makes sense, but why should we calculate it only for immigration policy? Surely we should be consistent and use it when evaluating other policies as well.

For example, it's a good argument for far more progressive taxes than we have now, and even a Milton Friedman style negative income tax (perhaps implemented as a greatly expanded EITC).

So let's pick a reasonable value for theta, and suggest an omnibus bill that increases immigration and makes our tax rates vastly more progressive and greatly expands the EITC.

Any bets on how likely that is to pass Congress?

[Nat]

Sneaky is interesting. May I make a few comments:

He is evidently making no distinction between illegal and legal immigration. Interestingly, legal immigration negatively affects me (Computer programmer) but illegal immigration benefits me. Should I be happy that the union carpenter hasn't had a raise in over 20 years but my cheap lawn mower makes far more than he did in Monterrey?

To cite Dean Baker's point, lawyers and doctors (yada yada) are never at risk. I have no doubt Sneaky agrees. But if it is your ox that is gored it is a bit easier to be an asshole. Without some form of redistribution there is no viable political solution. So, I will buy Sneaky if we can double the number of physicians in this county over night. That would help a bunch us all.

The CEO of Walmart will like his graph. Interesting bedfellows with this argument.

I always find the taxation without benefit argument interesting. The last group got eligible. The overwhelming percentage of current undocumented workers are not even close to an age to be eligible. They are young. In fact, most would not yet be eligible even if on the books because it takes 40 quarters of payment into the system to qualify. So, you can actually make the case that whatever monies are taken in via FICA are reducing Paris Hilton's/Bill Gates'/The Walton's current income tax burden. If you are of a mind (and I am definitely not) that the SSTF is just a pile of empty IOUs then the undocumenteds and future SS retirees are in the same boat.

(And I am curious: what percentage of undocumenteds are in the system falsely vs. off the books in a cash economy?)

One can be for some legal immigration and against the current legislation and hopefully not be an asshole.

The argument leaves unstated the limits to immigration. Is the position that anyone who want to come should be allowed in? At some point the asshole is on the other side of the graph.

Also, as I have been saying for years: there is no solution without real workforce law enforcement. Nor is there a solution without addressing our healthcare problems.

[Torben]

Yes, probably the craziest idea. Let's assign 20 times more value produced by our nation and firms and stop trading with the rest of the world.Let's tax foreign firms and use the money to subsidize our firms. Let's, ....

[jonm]

The policy choices of wealthy countries suggest that the typical (or is that marginal?) value placed on the well being of an arbitrary foreigner is *much* less than 5% of the value placed on the well-being of a native. Furthermore, I don't see significant evidence that political institutions are distorting the preferences of the general public(s).

[Jeremy McKibben]

Borjas's position may have more to do with psychology than economics (see ingroup/outgroup bias)

[dissent]

The social welfare of black men has plummeted over the last 40 years, but "we" all get to have cheap household help, so that's a trade off any reasonable person would support. It is so much more emotionally rewarding to employ grateful Mexicans than blacks with their political activism and sense of grievance. Anyway the groups that are hurt by immigration are are disproportionately locked up in prison or housing projects, so one might say any problems are 'well contained'.

[Steve Sailer]

I'm fascinated by how economists claim to be social scientists, but when the topic turns to immigration, their interest in understanding reality dries up and most of what they want to do is preach morality.

And it's a morality that they clearly haven't spent much time thinking about.

One obvious question is: why Mexicans? Why should they be the primary beneficiaries of immigration to America, illegal and legal, when there are 5,043,000,000 people in the world (according to the CIA World Factbook) who live in countries with lower average per capita incomes?

[Steve Sailer]

Now, let's think a little harder. How many of those 5 billion people would want to move to America? Well, about 20% of all people of Mexican descent now live in America, a large fraction coming illegally. About 35% of all Puerto Ricans, all coming legally, now live in the 50 states, and the federal government had to institute vast tax breaks (estimated at $22k per year per family of four on the island) to stop the flow.

So, that would suggest 1 to 2 billion would move to America. Of course, that would never completely happen, because long before they all got here, the quality of life in America would be as bad as back home in the Third World, so why not stay home?

[jonfernquest]

Is this really any higher than in other countries?

Full immigration, as in getting a green card, is almost unheard of in many countries, for instance, most of Asia.

IMHO there should be more dual citizenships (full immigrations) in both directions.

[Ktwdawg]

Methinks you highly underestimate the cold-hearted selfishness of the Anonymous American Worker. When wealth distribution is at its most disparate in generations here at home, everyone I know is looking out for them and theirs, and not a care for anyone else-- much less even for foreigners.
I do, however, agree with your basic points, and of course a morally educated society could easily understand and acquiesce. Unfortunately that ain't the America we've got these days.

[dunk shoes]

In my opinion, one can not be quantified, but it is important, trade, free or otherwise. Thanks!

[rolex watches]

People usually say :"Seeing is believing." http://www.tt88times.com
Each attempt has a corresponding gain, in part or obvious, or vague. At least we have the kind of satisfaction After I bought this watch ,in a sense,it means a great deal to me. http://www.fashionhairfu.com

[pizza]

I don't see significant evidence that political institutions are distorting the preferences of the general public

[mbt shoes]

I am a senior student too, I Love this post as i love study english, This article is to my feelings, thanks for your sharing, hoping to see more useful content.

[jordans for sale]

Very interesting issue that after a very successful. Nicely written article good work ! Thanks for the great piece of sharing.

[jordan shoes]

It's good to see this information in your post, i was looking the same but there was not any proper resource, than now i have the link which i was looking for my research.

[Moncler]

I like these articles , democratic countries formulate policies are both team and the interests of the people of power, but the undemocratic countries rarely for the interests of the people

[Drilling additives]

Local Line deals with various drilling chemicals, drilling weighing chemicals, emulsifiers, corrosion inhibitors, drilling mud deformers, Polymers, Bulk products etc.

[gucci outlet]

to some extent, it is a difficult choice.

[Dubai promotions]

Many places and centers offer business and trade promotions to both buyers and suppliers. These promotions are fine as far as low pricing structure is concerned but when it comes to quality, only Dubai promotions are idea and best-suited as per your actual business needs and trading requirements.

[Account Deleted]

raf

Thanks so much.

[Account Deleted]

Nice information provided here which is very useful to everyone...
laptops in lahore

[Account Deleted]

Raf
raf

Thanks to you ...

[Account Deleted]

Raf
raf

Good Job ...

[Account Deleted]

Many places and centers offer business and trade promotions to both buyers and supplier
sexshop

[Account Deleted]

Thanks for sharing your article. I really enjoyed it. I put a link to my site to here so other people can read it
sexyshop

[Account Deleted]

What about the differences in skill intensities across industries? The job losses in the relatively unskilled-labor intensive battery industry should have little effect on the relatively skilled-labor intensive machinery
sexshop online