April 13, 2006
What (Some) Economists Have To Say About The Economic Effects Of Immigration
The "some economists" refers to those interviewed in the latest survey by the Wall Street Journal:
Nearly 80% of economists who responded to questions about immigration in the latest WSJ.com forecasting survey said they believe undocumented workers have an impact on the bottom rung of the wage ladder. Twenty percent believe the impact is significant, while 59% characterize the effect as slight. The remaining 22% said there is no impact...
About half of the economists said the presence of illegal immigrant workers has slightly reduced the overall rate of inflation in the economy, while 8% said the inflation rate has been reduced significantly. But 41% said they believe undocumented workers have had no impact at all on inflation.
Okay, let me try this again. To the extent that wage costs exert pressure on the pace of consumer- or output-price increases, it is wage growth in excess of productivity growth that matters. If the wages of any particular subset of workers are lower because their productivity is lower, there are absolutely no consequences at all on prices or their growth rates.
In fact, the low productivity explanation for low wages seem to be exactly what most of the survey respondents have in mind:
On balance, nearly all of the economists – 44 of the 46 who answered the question – believe that illegal immigration has been beneficial to the economy. Most believe the benefits to business of being able to fill jobs at wages many American workers won't accept outweigh the costs.
I could be wrong, but I'm guessing that the opinions of most of those surveyed are based more on gut feeling than research. If it's research you are looking for, try out Alan Krueger's suggestions (and tip your along the way in the direction of Brad DeLong).
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» US immigration debate: "Card is well ahead of Borjas on points" from New Economist
Like many other econobloggers, I have been following US political debates over immigration with some interest. But what about the underlying economics? Has immigration been a net gain or loss for the US economy? Brad DeLong has posted a useful review o... [Read More]
Tracked on Apr 17, 2006 4:45:00 PM