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Review of the Immig= ration Literature

Immigration Lit Rev= iew

Immigration & Assimilation

Immigration & Business

George Borjas
Economics of Immigration

Outline of Borjas R= eview

History of Immigrat= ion

Basic Historical Po= ints

Slide 9

Relative Importance= of Immigration

Most Recent Changes=

Rise of Non-European Immigrants

Slide 13

Waves of Change=

States Ranked by Hi= ghest Percentage of Foreign Born

Immigration Is Spre= ading Out

Slide 17

Borjas: Relative Performance

Aging & Cohort Effects

Explanation=

Implications

Borjas Criticism

Aging & Cohort Effects

Data Problems & Synthetic Cohorts

Slide 25

Paper Suggestions

A Brief Effort to Replicate Chiswick

Slide 28

Slide 29

Slide 30

Slide 31

Slide 32

Slide 33

Slide 34

Slide 35

Slide 36

Economic Assimilati= on of 1970s Not Replicated

National Origin &am= p; Self Selection

Slide 39

Slide 40

Self Selection<= /b>

Immigrant Policy

Impact on Native Wa= ges

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Review of the Immig= ration Literature
George Borjas’ 1994= Journal of Economic Literature Article
(with suggestions f= or term papers)

Immigration Lit Rev= iew
Literature emerges = out of and is focused by politics of immigration
How do immigrants a= ffect “us”?
How do immigrants p= erform is relative to natives
More than relative = to their parents or non-immigrating folk or the community they left, etc.
How do immigrants a= ffect “our” wages, employment, business opportunities
How do immigrants a= ffect our welfare access/costs
Should “we” restrict immigration?

Immigration & Assimilation
Melting pot mytholo= gy
Multiculturalism
Analyzing immigrant= wage performance is the economic dimension of assimilation

Immigration & Business
Capital benefits fr= om expanded labor pools
Locally tied busine= sses cannot go overseas for cheaper labor
Restaurants, constr= uction, agriculture, hospital and old age home services, etc.
If some access immi= grants, most must
Costco vs. Walmart<= /font>

George Borjas
Economics of Immigration
History
Performance<= /td>
Primarily relative = wage growth
National origin of = immigrants: country selection & selection within countries
International Diffe= rences in Performance
Primarily Canada
Impact on Native Wo= rkers
Wages and jobs
Welfare usage
Second generation i= mmigrants

Outline of Borjas R= eview
Intro
History
Performance<= /td>
Age & cohorts
Compare within grou= ps
Language
National origin &am= p; self-selection
Decline in skills
Self selection
Host demand<= /td>
International compa= risons
Impact on natives
Immigrants & we= lfare
Immigrant welfare p= articipation
Do immigrants pay t= heir way re: welfare?
Second generation p= erformance

History of Immigrat= ion
Host Country Demand=
Policies:
1924 ethnic quotas<= /font>
1965 family ties; r= efugees
1986 Immigration Re= form and Control Act (amnesty + controls)
Macroeconomics
1930s Depression; P= ost WWII Boom; Post 1970s Globalization
Source Country Supp= ly
Uneven development = of capitalism
Migrant streams

Basic Historical Po= ints
Percent foreign bor= n fell but is now rising back to historical highs
15% in 1890; 5% in = 1970; 12.4% in 2005
Immigrants accounte= d for 54% of increased population growth in 1910; 5% in 1950 and 33% or more today.
Immigrants used to = come from Europe but now come from Latin America (lesser extent Asia)
Immigrants are spre= ading out from traditional states (e.g. California) to new states (e.g. Utah)

Slide 9

Relative Importance= of Immigration

Most Recent Changes=

Rise of Non-European Immigrants

Slide 13

Waves of Change=

States Ranked by Hi= ghest Percentage of Foreign Born

Immigration Is Spre= ading Out

Slide 17

Borjas: Relative Performance
Aging and cohort ef= fects
Wage convergence be= tween ethnically similar immigrants and natives
Language human capi= tal

Aging & Cohort Effects

Explanation=
Immigrants pick up = US specific skills over time
English, job search= ing skills and information, formal education unique to US (medical and other licensi= ng, etc.)
Immigrants more abl= e and/or more highly motivated than natives

Implications
Immigrants do very = well over time
Melting pot melts (= i.e. economic assimilation)
Immigrants are high= quality labor raising US labor productivity and not straining welfare system
Immigrants do not d= rive down wages (i.e. they are high wage labor eventually)

Borjas Criticism
Hides cohort effect= s
Recent immigrants m= ay be less able than previous cohorts driving down younger end of age-earnings profi= le
Changing immigratio= n policies; changing source countries
Less successful imm= igrants my return to source country raising the older end of the age-earnings profil= e

Aging & Cohort Effects

Data Problems & Synthetic Cohorts
Longitudinal data t= oo small to measure immigrants
SIPP, NLS-youth
Census, CPS and Ame= rican Communities Survey are large but cross sectional
Synthetic cohorts p= referable to cross sectional analysis

Slide 25

Paper Suggestions
Replicate Borjas Ta= ble 6 for 2000 Census and 2001-2004 American Communities Survey
Can you replicate h= is results for 1990?
Is it still getting= more divergent?
Replicate Borjas Ta= ble 7 (same as 6 but by ethnic group)
With Eastern Europe= an immigration since 1990 are European immigrants still doing well?

A Brief Effort to Replicate Chiswick
Using small sample = from 2004 ACS
Will I get age-earn= ings profiles that cross?

Slide 28

Slide 29

Slide 30

Slide 31

Slide 32

Slide 33

Slide 34

Slide 35

Slide 36

Economic Assimilati= on of 1970s Not Replicated

National Origin &am= p; Self Selection

Slide 39

Slide 40

Self Selection<= /b>
Borjas’ theory:
Skilled workers in = countries that do not reward skills sharply will immigrate to higher income countri= es: skilled workers in countries with even income distribution will stay.
In countries with u= neven income distributions, unskilled workers will leave.
As immigration shif= ts from rich to poor countries, immigrants shift from skilled to unskilled.
Return immigrants w= ill be the “worst of the best” and the “best of the worst” exacerbating initial selection bias

Immigrant Policy
Employment of nativ= es
Relative skill comp= osition of immigrants and natives (e.g. Marshall’s 3rd and 4th points: elasticity of supply of substitutes and complements)
Generosity of socia= l welfare
Advantages to emplo= yers
Social fabric

Impact on Native Wa= ges
More later
Basic strategy is t= o treat urban labor markets as isolated and compare relative supplies of immigran= ts on native wages
But if markets adju= st instantaneously, immigrant effect will be dissipated across the entire economy

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= =
Review of the Immigration
= Literature
<= /td> <= /td> = <= /td>
George Borjas’ 1994 Journal of
= Economic Literature Article
(with suggestions for term papers)
------=_NextPart_01C6E0AD.27026430 Content-Location: file:///C:/4524858D/Week_2_Borjas_Econ_of_Im_files/v3_master03_image001.gif Content-Transfer-Encoding: base64 Content-Type: image/gif R0lGODlhBgALAHcAMSH+GlNvZnR3YXJlOiBNaWNyb3NvZnQgT2ZmaWNlACH5BAEAAAAALAEAAgAC AAcAgAAAAAAAAAIERG4ZWgA7 ------=_NextPart_01C6E0AD.27026430 Content-Location: file:///C:/4524858D/Week_2_Borjas_Econ_of_Im_files/v3_slide0014.htm Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="windows-1252" Slide 1
= Immigration Lit Review
<= /td> <= /td> <= /td> <= /td> <= /td> = <= /td> <= /td> <= /td> <= /td> <= /td> <= /td>
•<= /font> Li= terature emerges out of and is focused
by= politics of immigration
–<= /font> Ho= w do immigrants affect “us”?
•<= /font> Ho= w do immigrants perform is relative to natives
–<= /font> Mo= re than relative to their parents or non-immigrating folk
or = the community they left, etc.
•<= /font> Ho= w do immigrants affect “our” wages,
emp= loyment, business opportunities
•<= /font> Ho= w do immigrants affect our welfare access/costs
–<= /font> Sh= ould “we” restrict immigration?
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= Immigration & Assimilation
<= /td> = <= /td> =
•<= /font> Mel= ting pot mythology
•<= /font> Mul= ticulturalism
•<= /font> Ana= lyzing immigrant wage performance is
the= economic dimension of assimilation
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= Immigration & Business
<= /td> <= /td> <= /td> <= /td> = <= /td> <= /td> <= /td> <= /td> <= /td>
•<= /font> Ca= pital benefits from expanded labor
pool= s
–<= /font> Lo= cally tied businesses cannot go overseas
for= cheaper labor
•<= /font> Res= taurants, construction, agriculture, hospital and
old= age home services, etc.
•<= /font> If = some access immigrants, most must
•<= /font> Cos= tco vs. Walmart
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<= /td> =
= George Borjas
Economics of Immigration
<= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td>
•<= /font> Hist= ory
•<= /font> Per= formance
–<= /font> Pri= marily relative wage growth
•<= /font> Na= tional origin of immigrants: country selection
&a= mp; selection within countries
•<= /font> In= ternational Differences in Performance
–<= /font> Pri= marily Canada
•<= /font> Im= pact on Native Workers
–<= /font> Wag= es and jobs
•<= /font> Wel= fare usage
•<= /font> Se= cond generation immigrants
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= Outline of Borjas Review
<= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td>
1. Intr= o
2. Hist= ory
3. Perf= ormance
1. Age = & cohorts
2. Co= mpare within groups
3. Lang= uage
4. Na= tional origin & self-
sele= ction
1. Decl= ine in skills
2. Self= selection
3. Host= demand
<= /td> <= /td> <= /td> <= /td> <= /td> <= /td>
1.= Inte= rnational
comp= arisons
2.= Imp= act on natives
3.= Im= migrants & welfare
1. Imm= igrant welfare
part= icipation
2. Do= immigrants pay their
way= re: welfare?
4.= Se= cond generation
perf= ormance
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= History of Immigration
<= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td> <= /td>
•<= /font> Ho= st Country Demand
–<= /font> Poli= cies:
•<= /font> 192= 4 ethnic quotas
•<= /font> 196= 5 family ties; refugees
•<= /font> 19= 86 Immigration Reform and Control Act (amnesty +
cont= rols)
–<= /font> Mac= roeconomics
•<= /font> 19= 30s Depression; Post WWII Boom; Post 1970s
Glob= alization
•<= /font> So= urce Country Supply
–<= /font> Un= even development of capitalism
–<= /font> Mig= rant streams
------=_NextPart_01C6E0AD.27026430 Content-Location: file:///C:/4524858D/Week_2_Borjas_Econ_of_Im_files/v3_master03_image007.gif Content-Transfer-Encoding: base64 Content-Type: image/gif R0lGODlhBgALAHcAMSH+GlNvZnR3YXJlOiBNaWNyb3NvZnQgT2ZmaWNlACH5BAEAAAAALAAAAgAE AAcAgAAAAAAAAAIIjAOJsKzpHigAOy== ------=_NextPart_01C6E0AD.27026430 Content-Location: file:///C:/4524858D/Week_2_Borjas_Econ_of_Im_files/v3_slide0017.htm Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="windows-1252" Slide 1
= Basic Historical Points
<= /td> <= /td> = = <= /td> <= /td> <= /td>
•<= /font> Pe= rcent foreign born fell but is now rising back to
his= torical highs
–<= /font> 15%= in 1890; 5% in 1970; 12.4% in 2005
•<= /font> Imm= igrants accounted for 54% of increased
po= pulation growth in 1910; 5% in 1950 and 33%