U.S. Immigration Policy Analysis

Description

There are more than 40 million foreign-born people living in the United States, and roughly half of them are not citizens (Congressional Budget Office [CBO], 2015). The report states that 11 to 12 million immigrants are living in the United States without legal status and are ineligible for public benefits. Abramitzky and Boustan (2016) note that immigration was a primary issue of the 2016 presidential election and that comprehensive immigration reform legislation has befuddled the U.S. Congress for decades. The cost, positive or negative, of a new immigrant arriving to the United States is thus critical to both the public debate and the formation of policy.

Abramtizky and Boustan (2016) note that the most recent attempt at a large immigration bill paired a program that provided a means to obtain citizenship for those living in the country illegally with stronger enforcement tools to stem future illegal immigration; the bill died in Congress in 2013. President Obama issued multiple executive actions protecting some undocumented immigrants, and President Trump would later use his executive authority to seal the border to residents of seven Muslim-majority nations (Almasy and Simon, 2017). In 2020, Vice President Pence ordered the CDC to use its emergency powers to authorize the immediate expulsion of all illegal entrants, a practice continued by President Biden at the time of this writing (Hansen, 2021).

Historical Trends and Current Characteristics

Blau and Mackie (2017) found that the number of foreign-born individuals living in the United States rose from approximately 9% of the total population in 1995 to 13% of the population in 2014, an increase of 70 percent, compared to an increase in the native-born population of 20% during the same time frame. They found that this increase was attributed to an increase in both illegal and legal immigration: illegal immigration increased annually until 2007, after which inflows rapidly declined, briefly shrinking the number of people living in the United States without legal status by about a million, before stabilizing to around 11.1 million in 2014, a 95% increase from the 5.7 million unauthorized immigrants present in the United States in 1995. Legal immigration, measured by the number of so-called “green cards” issued, increased from roughly 785,000 per year in 1995 to just over one million in 2014. At the same time, the H-1B visa program issued 65,000 documents granting temporary legal status; in 2014, 85,000 such visas were issued, as the cap, originally authorized in 1990, was increased in 2006 to accommodate foreign professionals graduating with post-graduate degrees at U.S. institutions (Blau and Mackie, 2017).

In 1970, native-born males worked 88.8% of the weeks of the year while immigrants worked 86.1% of weeks (Blau and Mackie, 2017). In 1990 and 2000, the gap was wider at 3.8 and 3.9 percentage points respectively. By 2012, foreign-born males worked, on average, 81.1% of weeks while native-born males worked 75.9% of weeks. The relationship between native-born and immigrant women is the opposite, with the native-born working 1.6 percentage points more than their foreign-born counterparts in 1970. This gap increased to 8.8 percentage points in 1990, 12.6 percentage points in 2000, and only slightly narrowed by 2012, to 8.2 percentage points. Women born outside of the United States experienced a 44% increase in employment during this period compared to a 57% increase for women born in the country. Blau and Mackie found that differences in employment between immigrants and native-born citizens were most pronounced immediately after the immigrants’ arrival and that for both men and women, increased duration of residence correlated with increased employment. They found that women experienced an assimilation effect after exposure to American culture and the U.S. labor market that increased their likelihood to join the labor force. While male immigrants do not experience the same culture shock regarding gender norms around work that their female counterparts do, the initial discrepancy in employment between recently arrived immigrant men and native-born men is also due to lower labor force participation among recent immigrants rather than due to an increase in unemployment (Duncan and Trejo, 2012, as cited in Blau and Mackie, 2017).

Blau and Mackie (2017) also analyzed wage data decennially from 1970 to 2000 and 2012, finding that male immigrant workers made $1.13 an hour more than native-born male workers, in 2012 dollars, in the year 1970. This gap reversed quickly: by 1980, native-born male workers made 98 cents an hour more than immigrant men; in 1990, the difference was $1.15. In 2000, the difference was $2.78 in favor of native-born male workers, increasing to $3.38 in 2012. They find that much of the difference in wages is attributable to educational differences, with just the two most recent five-year immigrant cohorts earning less than their native-born peers of similar educational attainment. As with employment, Blau and Mackie found that the wage gap between the native- and foreign-born narrowed with duration of residence. Chiswick (1978), as cited in Blau and Mackie, estimated that immigrants were able to close the wage gap in 10–15 years and that immigrants experience faster wage growth than native-born workers of the same generational cohort, in part because the jobs immigrants take when first arriving may pay below their earning potential.

Similar to trends in employment and wages, Blau and Mackie (2017) find that proficiency in the English language increases with duration of residence, with earlier cohorts of immigrants experiencing a more rapid acquisition of English than those who immigrated more recently, possibly due to a surge in migration from Latin America, whose immigrants have less proficiency in English than their non-Hispanic counterparts.

Blau and Mackie (2017) found that the age of foreign-born workers trended downward in recent decades and that by 2012, those aged 25–34 represented a plurality of new arrivals.1 The proportion of immigrants arriving from different geographic regions has also changed, with Europeans composing more than 90% of arrivals prior to 1930, and immigrants from North, Central and South America forming a 45.6% plurality in the most recent period from 1970 to 2013. The ethnic composition of immigrants has similarly changed, with 87.3% identifying as non-Hispanic white in 1900, decreasing to 62.3% in 2014 as immigration from Latin America and Asia surged. Immigrants have lower levels of educational attainment compared to native-born citizens, with 28% of the former lacking a high school diploma, compared with 8% of the latter in 2012. The discrepancy largely disappears at the post-graduate level, with roughly 11% of both immigrant and native-born individuals continuing beyond undergraduate. Recent immigrants have been overrepresented in both very high and very low educational attainment, and work in corresponding jobs, resulting in a clear increase in occupational segregation between immigrant and native-born workers (Blau and Mackie, 2017).

Fiscal Impact

Blau and Mackie (2017) found that immigrants, and particularly immigrant youth, experience higher levels of poverty than native-born citizens. Between 1970 and 2000, poverty decreased for native-born residents while immigrants experienced an increase in poverty (Card and Raphael, 2013, as cited in Blau and Mackie, 2017). In 2011, almost 20% of immigrants and close to a third of immigrant youth lived in poverty, compared to 13.5% and 19.2% of native-born persons and youth, respectively. When including U.S.-born children, Mexican immigrants have the highest poverty level of any immigrant nationality at 34.8%, closely followed by immigrants from Central America and Caribbean island nations (Camarota, 2011, as cited in Blau and Mackie, 2017).

Higher poverty levels correspond with higher utilization of public benefit programs, but laws prevent some immigrants from accessing public benefits that other U.S. residents have access to (Blau and Mackie, 2017). People who entered the United States illegally are not eligible for the Supplemental Nutrition Assistance Program (SNAP), Medicaid, Supplemental Security Income or the Temporary Assistance for Needy Families (TANF) program. Immigrants residing legally in the United States are ineligible for these programs for at least the first 5 years of their legal residence. Refugees, asylum seekers, U.S.-born children of immigrants and some immigrant children are eligible for these means-tested programs.

Irrespective of laws, 58.2% of immigrants receive some type of public assistance program, compared to 41.8% of the native-born population, with higher utilization of food assistance and Medicaid programs by foreign-born residents than their native counterparts (Current Population Survey, 2011–2013, as cited in Blau and Mackie, 2017).

Blau and Mackie (2017) stratified the foreign-born population into first, second and third generation-plus (third-plus), finding that adults in the second generation had higher incomes and, consequently, higher taxes paid per capita than in the first or third-plus generations. Until age 60, first generation immigrants have a more deleterious fiscal impact than those considered second or third-plus generation due to lower tax contributions. Immigrants in the third-plus generation utilize Social Security more than those in the first or second generations and thus have higher per capita costs to government than immigrants in earlier generations.

In total, the fiscal ratio, or proportion of government outlays to receipts, for all generations of immigrants is below one as immigrants receive more in benefits than they pay in taxes (Blau and Mackie, 2017). The researchers estimated the total fiscal burden of foreign-born residents to exceed $1.2 trillion in 2013 alone.

To evaluate lifetime fiscal effects of immigration, Blau and Mackie (2017), considered factors including fertility rates and the educational attainment of future offspring to estimate the present value of the fiscal impact of an individual immigrant. Using the 2014 CBO Long-Term Budget Outlook and the broadest definition of public goods, they estimated that each new immigrant is expected to generate at $173,000 in net fiscal impact, compared to -$5,000 for immigrants overall. Under an alternative CBO projection that assumes Congress enacts deficit-reduction measures, Blau and Mackie estimate each immigrant to generate an average positive net fiscal impact of $11,000, compared to a greater $195,000 net fiscal impact for new arrivals specifically.

Justification for Policy Interventions

Economic theory predicts that a sudden rise in the number of immigrant workers in the labor market will lower wages for all participants and will increase the return to capital for hiring firms, benefitting capital owners (Blau and Mackie, 2017). While this basic extrapolation of supply and demand only partially explains the immediate effects of a surge in new immigration, it mirrors policy arguments contending that immigration restrictions benefit low-wage workers. Camarota (2007) states that the United States should reduce immigration for workers with few skills. Reducing competition for low-wage work is one possible justification for enacting stricter limits on immigration overall, while normative justifications, such as immigrants needing to “wait their turn,” influence more specific distinctions on harsher treatment of people entering the country illegally.

Economic theory predicts that reducing illegal immigration and removing those currently present in the United States unlawfully would increase wages for native-born farmworkers while decreasing profit for the owners of capital. Supply would contract, increasing competition among employers for workers. As farm work is often seasonal, it is possible that enforcement of identification screenings like e-Verify and tougher border enforcement would increase wages without a need for simultaneous deportations, and this would likely induce a labor shock in the labor market for agricultural work.

Similar to reducing illegal immigration, reducing the issuance of H-1B visas would increase wages for highly-skilled native-born workers, while reducing the labor supply and decreasing the productivity of the remaining workers, consequently decreasing profit for capital owners. Moreover, the economic multiplier effect on innovation allows for a theoretically infinite loss of economic capital and domestic technological progress by reducing the presence of highly-skilled workers in the country. However, increasing domestic demand for such jobs would increase demand for degrees preparing individuals for such careers, and the labor force would likely expand to accommodate the reduction in H-1B visas. This would, however, take some time and would not make up for the potentially large and immediate consequences of reducing the issuance of visas to highly skilled foreign workers.

Card (1990) found that the arrival of Mariel immigrants increased the Miami labor force by 7% but had essentially zero effect on either the wages or employment status on either other Cuban or non-Cuban workers in the same market. Card similarly fails to link any change in unemployment or overall wage rates of earlier immigrants to the arrival of the Boatlift.

Borjas (2015) updates Card’s 1990 research by adding data showing a dramatic reduction in the wages of high school dropouts, the educational cohort of greater than 60% of the Marielitos. Borjas’ conclusion contradicts Card’s repeated contentions of “negligible effect[s],” “essentially no effect” and “virtually no effect” from the rapid expansion of Miami’s unskilled labor force after the introduction of the Mariel immigrants (pp. 255–256).

It is evident that the effects of an increase in the labor supply, which economic theory predicts will have a negative effect on wages, are dependent on the skills of both the immigrants and the employees currently in the market. While the introduction of new immigrants likely makes current workers more productive, those in the industries the immigrants work in will face lower wages than they would otherwise experience with fewer participants in the labor force. Whether the presence of undocumented agricultural workers and foreign-born individuals on H-1B visas is detrimental to the wages and employment prospects of native-born workers is dependent on domestic labor demand for jobs in these industries.

Policy Recommendations

I share many mainstream sympathies toward reforming the American immigration system: I believe it should be fair, just and humane. Immigration policy is an art, not a science, and it is clear from the research of Blau and Mackie (2017) that quantifying the cost, negative or positive, of immigration is based on widely varying assumptions that produce similarly varied results. While much of the past five years has been spent discussing the merits of a “wall” along the U.S.-Mexico border, the political nuance obscures the reality of those of us who live along it. While I currently reside in San Diego, my brother lives in McAllen, Texas, where hundreds of square miles of the United States lie north of the U.S.-Mexico border, and south of the wall. I say this not to oppose physical barriers, but to point out that both proponents and opponents are dishonest about the purpose of a wall: it does not actually prevent anyone from accessing the United States. It is porous and located on American soil; those who reach the barrier in all but the most guarded regions — where Mexican authorities also patrol — typically have the right to claim asylum and remain in the United States until an immigration judge can hear their case; prior to the CDC issuing the Title 42 rule authorizing immediate expulsion, political controversy arose over whether recent arrivals should be “caught and released” into the United States or held in crowded border facilities. This was a vexing issue for the Trump administration as a 1990s-era agreement known as Flores prevented families from being held for longer than a few weeks, ultimately providing a rationale for President Trump’s now-rescinded policy of detaining migrant children separately from the adults they arrived with.

This context leads me to my first immigration proposal, which is that the United States needs to live up to the promise of its legal immigration system by dramatically increasing the number of immigration judges available to adjudicate asylum claims. The controversy over “catch and release” should be ended by ensuring all immigration cases are heard within the time limitations provided for in Flores. While partisans provide drastically different statistics on the number of released aliens who ultimately attend their immigration hearings, it’s likely closer to 50% than 0% or 100%. Increasing the number of asylum judges while ending what I believe is the ethically questionable Title 42 expulsion policy would reduce illegal immigration over pre-pandemic levels by increasing the number of migrants screened, denied asylum, and returned to their home countries — individuals who under the policies of presidents until Trump were often allowed into the United States. Increasing the percentage of immigrants who enter the country screened by authorities serves the security interests of individuals in the communities immigrants eventually reside in and the nation’s national security interests more broadly as the Southern Border is a possible entry point for terrorists.

In addition to increasing the number of immigration judges and ending Title 42 expulsions, the administration should reimplement the “Remain in Mexico” policy, where non-Mexican asylum seekers crossing from Mexico would be returned to Mexico to await a hearing in the United States. This eased strain on crowded border facilities and, unlike Title 42 expulsions, still provided migrants with access to the U.S. asylum system.

The administration should immediately reauthorize ongoing projects related to construction and maintenance of physical barriers along the U.S.-Mexico border, as the barriers allow Border Patrol a control of the flow of people and goods around American ports of entry. Additionally, Congress should fund a “virtual wall” along the entire southern border, allowing all unlawful entrants to be tracked and placed into the custody of Immigration and Customs Enforcement (I.C.E.). The deterrent effect of a much more effective border patrol would reduce competition in some low-skilled industries, particularly agriculture, which could force a short-term labor shock. The government should remedy this by providing more farmworker visas to affected businesses. While I am proposing a much more secure border than currently exists, I do believe I.C.E. should be liberalized, allowing many of those apprehended for entering illegally to remain in the United States if they participate in a path to citizenship, which brings me to my final two points: The United States should provide a path to citizenship for all of the undocumented immigrants currently in the country. While public benefit spending would increase, so would tax revenue, particularly for subsequent generations of immigrants. Second, the United States should adopt a merit-based immigration system to prioritize immigrants from industries with labor shortages and those who are unlikely to rely on public benefits. This is what many other relatively progressive Western nations like Australia and Canada already do. A merit-based immigration system is simply in the best economic and national security interest of the United States. This does not preclude the importation of some low-skilled workers, particularly in professions with low domestic labor demand, such as agriculture, and does not deny the hard work of many immigrants, legal and illegal.

In summation, the administration should take unilateral action to fund additional immigration judges, end Title 42, reinstate “Remain in Mexico” and reauthorize construction of physical barriers along the Southern Border. As part of a comprehensive immigration plan, Congress should provide a path to citizenship for those in the country illegally, “virtually” seal the border to ensure 100% apprehension of all unlawful entrants, and adopt a merit-based immigration system that prioritizes the interests of American workers.

Footnote

1Blau and Mackie (2017) state that, “in 2012, the peak was in their 40s,” referring to the age of the foreign-born population (p.3). Blau and Mackie later state that, “a peak concentration of persons ages 25–34 in 2012” represent the foreign-born population changing from “a relatively old population… to being a relatively young population” (p. 132).