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Heaven's Door After a Year
George J. Borjas*
June 10, 2001
It has been a year since
Heaven’s Door
was published. And it has been an interesting year, both in terms of the
reactions to my book and in terms of how the debate over immigration policy has
evolved.
I was not surprised that my book generated interest among participants in the
immigration debate and among political commentators.
After all, the book addresses topics that are highly contentious and
controversial —and these topics evoke a great deal of emotion among most
Americans.
I was surprised, however, at the nature of the reaction —as represented by the
reviews and comments published in major newspapers and magazines. To a large
extent, the reviews can be easily allocated to two extreme camps: the favorable
reviewers tended to like the book a lot, while the unfavorable reviewers
disliked the book intensely. As with immigration itself, there seemed to be no
middle ground, no subtleties over the type of book that I had written and the
type of policies I had proposed. It was often difficult to imagine that the
reviewers were referring to the same book. For example, Peter Skerry, who
reviewed the book for the
Washington Post, characterized Heaven’s Door as a “tour de
force in the economics of immigration,” while Sylvia Nassar, who reviewed it for
the
New York Times, concluded that it was “impressively researched.”
In contrast, Jagdish Bhagwati, who reviewed it for the
Wall Street Journal, declared that the “economics arguments...are
critically flawed.”
In retrospect, and given the fact that the immigrant experience forms an
important part of the American psyche, I should have expected those extremes. I
thought that Heaven’s Door made a nuanced argument that could not
be easily tagged as fitting into either extreme of the immigration debate. After
all, the book stresses that there are both benefits and costs
associated with immigration. The book also argued that if the
United States wished to increase the economic benefits from immigration, the
country should pursue a different type of immigration policy, a policy that
would favor the entry of skilled immigrants. To be sure, I left little doubt as
to whether I think the United States should consider economic considerations in
setting immigration policy (it should!). Nevertheless, the subtleties quickly
got lost in the mythological mist that enshrouds any discussion of U.S.
immigration.
In reflecting over the reaction to Heaven’s Door, it is clear
(at least to me) that the book elicited the most negative responses from
reviewers writing for conservative and libertarian publications, such as the
Wall Street Journal and Reason. These publications typically
support calls for unrestricted immigration to the United States. The editorial
page of the Wall Street Journal, for example, is famous (or,
depending on one’s point of view, infamous) for repeatedly proposing a new
constitutional amendment: “There Shall Be Open Borders.”
From my perspective, the reaction exhibited by these publications represented
a “circling of the wagons” mentality. Rather than evaluating the overall merits
of the idea that some restrictions on immigration are probably better than none,
and that it might be worth discussing which types of restrictions might be most
beneficial, the response was to attack almost every fact reported in the book,
to raise questions about the credibility of the findings, and to dismiss the
whole enterprise as my misguided attempt to reflect on immigration policy when I
failed to fully understand the (obvious?) implications of the fact that the
United States is “a nation of immigrants.”
Surprisingly, the reviews re-ignited the debate over an empirical observation
that I thought had been settled beyond dispute. In particular, some reviewers
doubted my claim that there has been a drop in the relative skills of immigrants
who entered the United States in recent decades. The empirical validity of this
finding, which I first published in the academic literature in 1985 and which
has been re-examined by many social scientists in the past decade, is well
established. In fact, a panel of scholars assembled by the National Academy of
Sciences in 1997 reviewed the evidence, conducted additional empirical research,
and concluded that the skills of new waves of immigrants “have been declining
relative to that of native-born Americans. This decline appears across a number
of measures, including education levels and wages.”
Some reviewers claimed that there might not have been a drop in the relative
skills of legal immigrants who entered the country in the past few
decades. They argued that the trends revealed by the Census data were
contaminated because the Census enumerates both legal and illegal immigrants (as
well as such nonimmigrants as foreign students and business executives
temporarily working in the United States). If the presence of illegal immigrants
in these data biases the direction of the trends in immigrant skills, the
evidence then provides little information about what happened to legal
immigration and what should be done about it.
I doubt that the detractors have a valid point. As I showed in
Heaven’s Door (see Figure 2-4), the downward trend in the relative skills of
immigrants remains even if one simply examines the trend among non-Mexican
immigrants, on the presumption that a large fraction of the illegal immigrants
are from Mexico and are relatively unskilled. Moreover, the panel assembled by
the National Academy of Sciences itself conducted an empirical analysis that
analyzed data collected by the Immigration and Naturalization Service (INS) and
concluded that “the decline in the relative skills of the foreign-born over the
last few decades is not due exclusively to illegal immigrants or nonimmigrants.
The data suggest that the relative skills of legal immigrants have also been
falling over the period.”
A recent study conducted by Guillermina Jasso, Mark Rosenzweig, and James
Smith (and published in a volume
that I edited for the National Bureau of Economic Research) reexamined the INS
data and seems to suggest that the absolute skill level of legal immigrants
exceeded that of natives for much of the 1972-95 period. It is worth pointing out, however, that the
INS data are particularly ill-suited for documenting trends in immigrant skills.
After all, the data do not report the immigrant’s actual earnings or educational
attainment; instead, one makes a guess about the person’s economic potential by
using information on the type of job the immigrant held before moving to the
United States.
For instance, if the immigrant was a medical doctor prior to migrating, one
assumes that the immigrant will earn the average salary of doctors in the United
States. Needless to say, there is a great deal of measurement error in this
measure of the immigrant’s potential skills. After all, the immigrant’s
pre-migration job may have little to do with what that person ends up doing in
the United States —particularly if the occupation requires re-licensing (as in
the case of medical doctors). Moreover, the Jasso-Rosenzweig-Smith study is
itself inconclusive. The relative economic status of the immigrant population
depends on the type of statistical fine-tuning that is made to adjust the data
for the fact that the Census Bureau changed the way it coded occupations between
1970 and 1980.
Some reviewers also claimed that it was “absurd” to conclude, as I do, that
the net economic benefits from immigration are small, probably less than $10
billion a year. This estimate comes from a simple application of the widely used
textbook model of a competitive labor market. This is the same model that is
typically used to analyze the economic consequences of such government policies
as minimum wages and payroll taxes. The market for ideas provides what is
perhaps the most convincing argument in favor of my estimate. The immigration
area, after all, is highly contentious. If it were that simple to show that the
gains from immigration are huge, there is an audience ready and willing to buy
such numbers. My estimates are so “absurd” that not a single academic study has
concluded that they are higher —and some studies have concluded that they are
lower.
The mischaracterization of the evidence was perhaps most apparent when it
came to the issue of whether immigrants had a negative effect on the wages of
workers already in the United States. The Wall Street Journal
review, written by Jagdish Bhagwati,
an economic theorist specializing in international trade issues, shows this
tendency in a very striking way. Mr. Bhagwati dismissed my evidence (“Mr.
Borjas's larger economic claim, that immigration drives down wages, does not
survive scrutiny”) by claiming that economists Gordon Hanson and Matthew
Slaughter showed that U.S. wages are not driven down by immigration. The Hanson-Slaughter work
actually demonstrates that immigration does not seem to create wage
differentials between states that receive many immigrants and states that do
not, a point addressed at length in Heaven’s Door (see pages
73-78). The concluding paragraph of the Hanson-Slaughter study explicitly
describes how their work relates to the question at hand: “The evidence that
state-specific endowments shocks do not trigger state-specific wage responses
does not imply that the United States overall had no wage response
to increased immigration” (the emphasis is theirs).
The arguments that Mr. Bhagwati and other reviewers used to quickly dismiss
the evidence on the adverse labor market impacts of immigration were further
undermined by the unexpected entry into this debate of the
authority on U.S. economic policy. In February 2000, Alan Greenspan, the
chairman of the Federal Reserve, made some remarks
linking immigration and inflation that are destined to change the nature of this
debate. In Mr. Greenspan’s words:
Imbalances in the labor market perhaps may have even more serious
implications for potential inflation pressures. While the pool of officially
unemployed and those otherwise willing to work may continue to shrink, as it
has persistently over the past seven years, there is an effective limit to new
hiring, unless immigration is uncapped. At some point in the continuous
reduction in the number of available workers willing to take jobs, short of
the repeal of the law of supply and demand, wage increases must rise above
even impressive gains in productivity…In short, unless we are able to
indefinitely increase the rate of capital flows into the United States to
finance rising net imports or continuously augment immigration quotas, overall
demand for goods and services cannot chronically exceed the underlying growth
rate of supply.
Mr. Greenspan’s pronouncement restates the obvious: the laws of supply and
demand inevitably imply that a large increase in the supply of workers lowers
wages and reduces inflationary pressures. Mr. Greenspan, in effect, partly
credits the large immigration flows of the 1990s’s for the U.S. economy’s low
inflation rate. Under Mr. Greenspan’s astute interpretation, the fact that
immigrants lowered wages need not be seen as an adverse impact of immigration;
instead, it is a favorable consequence for it holds inflation in check. Many of
those who, in the pre-Greenspan days, had argued strenuously that immigration
had little impact on the economic opportunities of native workers now began to
argue just as strenuously that immigration fueled economic growth by keeping
wages and prices down.
Many of the unfavorable reviewers were so busy questioning the credibility of
the facts reported in Heaven’s Door that they seemed to miss the
whole point of the book. The United States will inevitably attract many more
immigrants than the country is willing to admit. As a result, choices have to be
made. Current immigration policy benefits some Americans (the newly arrived
immigrants as well as those who employ and use the services the immigrants
provide) at the expense of others (those Americans who happen to have skills
that compete directly with those of immigrants). Before deciding how many and
which immigrants to admit, the country must determine which groups should be the
winners and which should be the losers. Few of the detractors were willing to
take on this question.
Finally, there is an amusing, if unintended, irony in some of the most
extreme reviews —particularly those written from a libertarian perspective.
Stuart Anderson wrote a
review for Reason magazine that is worth singling out.
Mr. Anderson dismissed my proposal for a skills-based point system by repeating
my book’s warning that the system would be difficult for bureaucrats to
administer, and then added sarcastically: “As if bureaucrats are well suited to
handle any labor market decisions” (his emphasis). I wonder if Mr.
Anderson saw the incongruity in his statement. At the time he wrote the review,
he was a high-ranking immigration apparatchik himself—the “director of
immigration policy” for the Senate Immigration Subcommittee. His boss, Senator Spencer
Abraham, led the charge —presumably with Mr. Anderson’s advice— to alter the
U.S. labor market for skilled workers by greatly expanding the number of H1-B
visas granted to temporary high-tech workers. Does Mr. Anderson truly believe
what he writes about bureaucratic incompetence?
In the year that followed the publication of Heaven’s Door, the
immigration debate was dominated by three unrelated events. The first was the
media obsession with the saga of
Elián Gonzalez, the six-year-old boy who was rescued from the Florida seas
on Thanksgiving Day in 1999. His mother died during her attempted escape from
Cuba, and Fidel Castro soon made the return of the boy a cause célèbre
that dominated the airwaves and the front pages of newspapers for months.
Regardless of how one feels about the merits of the case, the Elián Gonzalez
saga made an important contribution to the future debate over immigration
policy.
It illustrated the awesome and arbitrary power that the INS has
over the lives of many foreign-born persons residing in the United States. The
INS has a great deal of discretion in deciding whether particular aliens should
be allowed to remain in the country. And once the agency chooses to pursue a set
of clearly defined goals, it seems to be able to achieve those goals with
relatively little interference.
There is now, in fact, a healthy debate over the agency’s competence in
managing U.S. immigration policy. And Congress is seriously considering
proposals that would break up the INS into two separate agencies. One agency
would be responsible with border protection and enforcement of immigration
regulations, while the other would provide naturalization services to legal
immigrants already in the United States.
There is much to be said for the proposition that administrative incompetence
rules at the INS. Consider, for instance, the agency’s record during the Clinton
years. At the beginning of Doris Meissner’s tenure as head of the INS in 1993,
the agency reported that there were just over 3 million illegal aliens residing
in the United States. By the year 2000, there were 6 million. [VDARE
note: More recent estimates suggest 12 million. But hey, who’s counting?]
This huge increase in the illegal alien population occurred despite much
higher expenditures on border enforcement. The INS budget tripled from $1.5
billion to $4.8 billion during that time. One could easily argue that there has
been a tremendous waste of resources at the agency in recent years —billions of
dollars spent on enforcement with little to show for it.
The failure of the INS in enforcing existing immigration laws extends far
beyond the agency’s flawed stewardship of the U.S. borders. The INS has a huge
backlog of persons who are already living in the United States and
who are waiting to regularize their immigration status and get their green
cards. This backlog increased from an “equilibrium” of about 121,000 persons in
1994 to over 1 million by 2000. The agency, it seems, cannot even keep up with
the legal immigrant flow.
Finally, political events in Mexico will inevitably alter the nature of the
dialogue over immigration policy in the United States.
Over 7 million Mexican immigrants now live in the United States, and an
additional 130,000 Mexican legal immigrants and 150,000 illegal immigrants enter
the country annually. Soon after his election on July 2, 2000, President
Vincente Fox proposed that the two countries share an open border within 10
years. There would then be free movement of people and goods.
The Mexico-U.S. wage gap is among the largest wage gaps found between any two
contiguous countries in the world. The World Bank reports that an American
manufacturing worker earns 4 times the salary of a manufacturing worker in
Mexico and 30 times the salary of an agricultural worker. These income
differences ensure that an open border would increase the number of Mexicans
immigrants.
The new immigrants would probably resemble the Mexican immigrants already in
the United States, whose poverty rate exceeds 33 percent. Firms that employ less
skilled labor would gain from having access to an even larger pool of workers.
But, as Mr. Greenspan’s reiteration of the laws of supply and demand suggests,
Mr. Fox’s proposals would further erode the economic opportunities available to
the most disadvantaged Americans. An open border between Mexico and the United
States would surely benefit Mexico and Mexican immigrants. But would it be good
for the United States?
In the end, the answers to many of the concerns that drive the debate over
immigration policy hinge on the question that I pose at the beginning of
Heaven’s Door, a question that has yet to become a central issue in
the modern immigration debate: What do the American people want immigration to
do for the United States?
Dr. George J. Borjas is the Robert
W. Scrivner Professor of Economics
and Social Policy at the John F.
Kennedy School of Government,
Harvard University. He is also a
Research Associate at the National
Bureau of Economic Research.
Professor Borjas received his
Ph.D. in economics from Columbia
University in 1975. In 1998, Professor Borjas was
elected a Fellow of the
Econometric Society. He is an
editor of the Review of
Economics and Statistics. He
has also served as a member of the
Advisory Panel in Economics at the
National Science Foundation and
has testified frequently before
congressional committees and
government commissions.
Professor Borjas has written
extensively on labor market
issues. He is the author of
several books, including Wage
Policy in the Federal Bureaucracy
(American Enterprise
Institute, 1980), Friends or
Strangers: The Impact of
Immigrants on the U.S. Economy
(Basic Books, 1990), and
Heaven’s Door: Immigration Policy
and the American Economy
(Princeton University Press,
1999). Professor Borjas's most
recent book is Labor Economics,
third edition. McGraw-Hill.
ISBN: 0072871776. Copyright year:
2005. See at < http://highered.mcgrawhill.com/sites/0072871776/information_center_view0/
>. He has published over 100
articles in books and scholarly
journals, including the
American Economic Review, the
Journal of Political Economy,
and the Quarterly Journal of
Economics.
E-mail:
<gborjas@harvard.edu>.
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