Krugman on immigration: small gain for natives, giant leap for immigrants
In an article titled North of the Border (New York Times, March 27, 2006), Paul Krugman writes:
“Give me your tired, your poor, your huddled masses yearning to breathe free,” wrote Emma Lazarus, in a poem that still puts a lump in my throat. I’m proud of America’s immigrant history, and grateful that the door was open when my grandparents fled Russia.
In other words, I’m instinctively, emotionally pro-immigration. But a review of serious, nonpartisan research reveals some uncomfortable facts about the economics of modern immigration, and immigration from Mexico in particular. If people like me are going to respond effectively to anti-immigrant demagogues, we have to acknowledge those facts.
First, the net benefits to the U.S. economy from immigration, aside from the large gains to the immigrants themselves, are small. Realistic estimates suggest that immigration since 1980 has raised the total income of native-born Americans by no more than a fraction of 1 percent.
Second, while immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration — especially immigration from Mexico. Because Mexican immigrants have much less education than the average U.S. worker, they increase the supply of less-skilled labor, driving down the wages of the worst-paid Americans. The most authoritative recent study of this effect, by George Borjas and Lawrence Katz of Harvard, estimates that U.S. high school dropouts would earn as much as 8 percent more if it weren’t for Mexican immigration.
Krugman’s piece evoked responses from many people, both supporters and opponents of immigration.
- In a blog post titled North of the Border, Bradford DeLong critiques Krugman for being dismissive of the gains to immigrants themselves. DeLong writes:
I think that we should focus on: “the net benefits… from immigration, aside from the large gains to the immigrants themselves, are small.” Particularly, we should focus on the “large gains to the immigrants themselves.” The net benefits from immigration including the large gains to the immigrants themselves are enormous. We shouldn’t forget that.
- Dan Klein to Paul Krugman: You Can Do Better, a blog post by Bryan Caplan references an article by Dan Klein and Harika Barlett that takes issue with Krugman’s stand on immigration. A relevant passage from the article quoted by Caplan:
Krugman’s illiberalism flows from the social-democratic ethos. He now minimizes the spontaneous benefits of liberal immigration: “First, the net benefits to the US economy from immigration, aside from the large gains to the immigrants themselves, are small” (3/27/06). In that column devoted to immigration, the only recognition of the benefits to the immigrants is that “aside.”…
But labor competition is not Krugman’s main concern. “[M]odern America is a welfare state, even if our social safety net has more holes in it than it should — and low-skilled immigrants threaten to unravel that safety net” (3/27/06). … “[T]he political threat that low-skill immigration poses to the welfare state is more serious than the fiscal threat” (3/27/06). Polities “with high immigration tend, other things equal, to have less generous welfare states than those with low immigration” (3/31/06).
- With Critics of Immigration Like This, Who Needs Advocates? br Bryan Caplan.
- Thinking Clearly About Economic Inequality, a policy analysis by Will Wilkinson, where he critiques (Page 15) Krugman’s analytical nationalism and his dismissal of the gains for immigrants. Related parts of Wilkinson’s paper are quoted at the compositional effects page.
- Economists on Immigration: What’s The Matter? by restrictionist Steve Sailer for VDARE.com mentions Krugman’s column, critiquing Krugman’s sentimentalism but also praising him for not succumbing to the economist blind spot.