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Immigrants Are Attracted to Jobs, Not Welfare

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This post was originally published on the Cato-at-Liberty blog here and is republished with the permission of the author.

Unauthorized and low skilled immigrants are attracted to America’s labor markets, not the size of welfare benefits.  From 2003 through 2012, many unauthorized immigrants were attracted to work in the housing market.  Housing starts demanded a large number of workers fill those jobs.  As many as 27 percent of them were unauthorized immigrants in some states.  Additionally, jobs that indirectly supported the construction of new houses also attracted many lower skilled immigrant workers.

Apprehensions of illegal crossers on the Southwest border (SWB) is a good indication of the size of the unauthorized immigrant flow into the United States.  The chart below shows apprehensions on the SWB and housing starts in each quarter:

 

Fewer housing starts create fewer construction jobs that attract fewer crossings and, therefore, fewer SWB apprehensions.  The correlation holds before and after the mid-2006 housing collapse. 

What about welfare? 

Here is a chart of the national real average TANF benefit level per family of three from 2003 to 2011 (2012 data is unavailable) and SWB apprehensions:

 

Prior to mid-2006, TANF benefit levels fell while unauthorized immigration rose.  During the housing construction boom, unauthorized immigrants were attracted by jobs and not declining TANF benefits.  After mid-2006, when housing starts began falling dramatically, real TANF benefit levels and unauthorized immigration both fell at the same time.  If unauthorized immigration was primarily incentivized by the real value of welfare benefits, it would have fallen continuously since 2003.   

The above chart does not capture the full size of welfare benefits or how rapidly other welfare programs increased beginning in 2008.  As economist Casey Mulligan explained in his book The Redistribution Recession, unemployment insurance, food stamps (SNAP), and Medicaid benefits increased in value and duration beginning in mid-2008.  Including those would skew welfare benefits upward in 2008 and beyond, but unauthorized immigration inflows still fell during that time.

In conclusion, housing starts incentivize unauthorized immigration while TANF does not. 

The progress of freedom

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This will be a bold claim, but I think that much of the history of the progress of freedom is summarized in three general patterns:

  1. Accountability vs. sovereignty.
  2. Separation of solidarity from violence.
  3. Rights flow from insiders to outsiders.

Clearly these need some explication.

  1. Accountability vs. sovereignty. By sovereignty, I mean the separation of rulers from the ruled, the claim of certain persons or organizations to be above the law, not answerable for following the moral rules that most people expect one another to abide by. Sovereignty appears to be primordial: at the dawn of history, we see the absolutist phaorohs elevating themselves to divine status and commandeering the labor of Egypt to build them spectacular tombs. The opposite principle, accountability, means people having to render an account, and the hearers of the account being placed, in some way and degree, in a position to judge the adequacy of the account. Accountability is subjection to the moral law. The slogan “a government of laws not men” is one way of putting the struggle of sovereignty vs. accountability. Under sovereignty, accountability consists in the subject being accountable to the sovereign, not the other way around. To make the sovereign accountable creates logical difficulties and a danger of an infinite regress, which is why thinkers like Thomas Hobbes are contemptuous of it, but in fact roundabout, tangled-up, ambiguous, confusing systems of accountability make the framework of freedom in which civilization flourishes. Senate, House of Representatives, Supreme Court, states, Federal Reserve, common law… Who’s in charge here?! There’s no answer, and that’s the point. Nowadays, democracy is taken to be the touchstone of legitimacy, and perhaps the dimly understood yet potent reason for this is that democratic accountability gives the regress somewhere to stop. “Who’s in charge here? The people,” says the democrat. But in truth, elections can’t and shouldn’t be the whole story of accountability: can’t, because of all the logical problems with democratic decision-making noted by (among many others) Buchanan and Tullock (1962) and Arrow (1951/1970); and shouldn’t, because when “the people” do agree, they might agree on doing something very bad, like segregation or slavery or electing Hitler. It’s good if the power of the people to get what they want is hedged about and constrained by courts that protect individual rights and economic technocrats to manage the money supply and international treaties that protect foreigners from the whims of domestic majorities and churches and civil disobedience movements that appeal to higher laws and stand ready to defy the democratic state when it is in the wrong.
  2. Separation of solidarity from violence. The word “solidarity” is not part of an economist’s usual vocabulary, and I don’t find it easy to define, but I think it’s historically important. Solidarity is people working together in pursuit of a common goal. Solidarity is people bonding, forming a group, a shared identity. Solidarity is fans rooting for the local sports team, friends helping one another move house, wearing the school colors or waving the flag or singing the family’s favorite song. An economist, habituated to methodological individualism, or a libertarian, adhering to an individualistic ideology, might want to dispense with it, with the practice, with the concept. It’s a part of human nature and human history. It’s also necessary to achieve all sorts of good ends– even including the cohesion of profit-seeking firms. Miller (1993) painstakingly shows how it’s impossible to arrange incentives within a firm so that the interests of all the individuals who comprise the firm coincide with those of the firm as a whole (in whatever sense). Doubtless, firms are shot through with misaligned incentives and conflicts of interest and operate inefficiently for that reason, but surely there is also a good deal of genuine team spirit and corporate loyalty and forgetfulness of self-interest, in short, solidarity, in firms, that makes them run better than they otherwise could. Of course, this applies more obviously to ideological groupings in civil society– Cato Institute fundraisers doubtless appeal to solidarity when asking donors for cash– as well as churches, nations, and so on. Of course, solidarity is not at all an unmitigated good. It is often a great evil, or at least a means to great, evil ends: the solidarity of white southerners against black civil rights; or the solidarity of the Germans under Hitler against the Jews. Now, at the dawn of history, it seems that solidarity was usually bound up with violence, in two senses: (a) it was in the crucible of war that solidarity was chiefly formed, and (b) the maintenance of solidarity was typically backed up by threats of violence. Of course, this is true even today: the solidarity of the Anglo-American alliance, a crucial historical force in the 20th century, owes much to their fighting two world wars together; the solidarity of the United States itself owes much to various wars going starting with the Revolution, and was also sealed in the Civil War, which set a precedent that perhaps deters would-be secessionists even today by a threat of violence. But as civilization advances more and more forms of solidarity arise that are independent of violence: the Christian church (perhaps ultimately the fountainhead of them all); the monastic orders of the Middle Ages; the “associations” whose abundance Tocqueville celebrated when he visited America in the 1830s; the teeming NGOs of today. Most striking of all, perhaps, are the great civil disobedience movements: Gandhi’s satyagraha campaigns; Martin Luther King’s marchers; and Polish Solidarity, which brought about the fall of communism. But also schools and political parties and sports clubs and, as I said, firms. As freedom progresses, more and more of the groups with which we identify ourselves are consensual. Some institutions, like families, largely retain their form but become more consensual in character, while others, like feudal suzerain-vassal hierarchies or ethnic tribes, vanish, and new, more consensual institutions appear.
  3. Rights flow from insiders to outsiders. Societies entirely lacking in justice and rights seem rare in history, though perhaps that’s only because they don’t produce much that’s worth remembering. Stalin’s Soviet Union, where even, or especially, top Communist leaders were routinely liquidated, might be an example of a society from which every vestige or simulacrum of justice had been utterly erased. Perhaps phaoronic Egypt was like that, I don’t know. But more often, some clique or set around the centers of power enjoys rights and conduct within it is shared by some norms or standards of justice, only no one thinks these norms apply to outsiders. In The Iliad, the Greek heroes appear to have no scruples about seizing women as sexual prizes and raping the wives of the Trojans, yet they do have some sense of justice among themselves, and Agamemnon, when he seizes a girl whom the army had allotted to Achilles, is definitely thought to be in the wrong. The progress of freedom often consists in the extension of rights established among themselves by some clique or inner circle to more and more of those outside the circle. The impressive freedom of speech which existed among the Greek heroes in The Iliad, but which did not extend to the ranks of common soldiers, was later, in the democratic revolution in Athens, extended to the whole people. Early 19th-century Americans prided themselves on their freedom, but did not grant the same freedom to black slaves or Indians. Later on, these freedoms were extended to all Americans. Constitutional government in England began with the Magna Carta, when the barons demanded and won recognition of their rights from the king, but as time passed, the liberties of the English, from habeas corpus to (much later) the vote, were extended to all Englishmen.

In view of these patterns, open borders can be seen as a natural next step in the progress of freedom.

  1. My co-blogger John Lee, in posts like this and this, highlights the arbitrariness and lack of accountability in immigration enforcement. Discretionary exercise of consular authority to exclude and deport people is an anomalous bastion of unaccountable sovereignty, a bewildering and often shocking exception to “government by laws, not men.” But to abolish discretion would be to recognize some sort of right to migrate, which virtually implies open borders, at least in an attenuated form.
  2. In immigration restrictions, solidarity continues to express itself in the form of violence against outsiders. We are we, therefore they must go. The maintenance of our collective identity somehow depends on the expulsion by force of foreign-born persons, the separation of families, the splitting up of communities, etc. The long transition from violent to peaceful forms of solidarity suggests that history will tend to move away from this.
  3. Open borders consists of extending some of rights of citizens, won in part through political struggle but demanded ex ante and recognized ex post as the requirements of justice quite apart from historical contingencies, to the foreign-born.

I don’t mean to say that open borders are inevitable. Logically, I don’t see why the progress of freedom should be inevitable, and while history gives considerable reason for optimism, it also shows that vast backsliding is possible. The early modern period in most of Europe seems to have seen a major reversal of the progress of freedom that had been attained in the High Middle Ages. Slavery, which had largely disappeared in medieval Europe, began again in the New World. Absolutist sovereignty gained ground at the expense of medieval accountability, with its patchwork of customary and feudal rights, including the parliaments and Cortes and Estates-General and zemskiy sobor and so on, which were eviscerated or ceased to be summoned. This was true even in England to some extent before 1640. Again, a major reversal in the progress of freedom occurred in the early 20th century, from which in some respects we have yet to recover. But open borders is the sort of advance that the progress of freedom, when it happens, has historically tended to realize.    Continue reading The progress of freedom →

It Can’t All Be About (the) U.S.

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In February, National Public Radio aired a segment, part of its Planet Money series, in which it asked three immigration experts what sort of immigration system they would have if they “controlled the borders.” To NPR’s credit, one of the experts was the Cato Institute’s Alex Nowrasteh (a contributor to the Open Borders site). He proposed letting all immigrants in, except for suspected terrorists, criminals, and those with serious communicable diseases. He noted that this policy would benefit the economy and would mean that people wouldn’t have to put themselves at risk crossing the border.

Not surprisingly, the other two experts chosen by NPR did not propose open borders. One expert was the economist Giovanni Peri, a professor of economics at the University of California, Davis, who has researched the economic impact of immigration on the U.S. and found it to be mostly positive. His ideal immigration system would be one in which employers would bid for permits allowing them to employ individual foreign workers, including low-skilled workers. The other expert was Dean Baker, co-director of the Center for Economic and Policy Research (we’ve critiqued Baker before). He would admit immigrants with families in the U.S. and would provide visas to highly skilled individuals who, in the words of NPR’s host, “would benefit our economy the most.” Mr. Baker said he “would like to make sure that you had a lot of immigrants at the high end” but is “less concerned about farm workers.”

The proposals from Mr. Peri and Mr. Baker seem designed to maximally benefit the U.S. and apparently make the interests of immigrants who are excluded from their systems irrelevant. Formulating such an immigration policy probably makes sense to many Americans. After all, some may think, the government should look out first and foremost for the interests of its citizens. Joseph Carens of the University of Toronto articulates this view: “The power to admit or exclude aliens is inherent in sovereignty and essential for any political community. Every state has the legal and moral right to exercise that power in pursuit of its own national interest…”

Mr. Carens suggests, however, that this nationalist position doesn’t justify immigration restrictions. He explains that “When the stakes are high (e.g., legal proceedings) we normally create institutional rules to try to prevent people from being able to favor their friends and relatives. In other words, our notion of justice constrain the extent and ways in which we think it is acceptable for us to favor family members… even if we are morally entitled to favor compatriots in some ways, it is not self evident that we are entitled to favor them by excluding potential immigrants. Perhaps that form of preferential treatment goes too far.” Restricting immigration in effect would be nepotism writ large, an attempt to favor those identified as being more closely connected to us by giving them access to the U.S. labor market and denying access to those deemed less connected.

Bryan Caplan of George Mason University (who has also guest blogged for Open Borders) echoes Mr. Carens in his critique of the analogy between the nation and a family: “…almost everyone recognizes moral strictures against familial favoritism.  Almost everyone knows that ‘It would help my son’ is not a good reason to commit murder, break someone’s arm, or steal.  Indeed, almost everyone knows that ‘It would help my son’ is not a good reason for even petty offenses – like judging a Tae Kwon Do tournament unfairly because your son’s a contestant.” Despite this, Mr. Caplan points out that at the national level citizens tend to lose this sense of morality and use nationalism “as an acceptable excuse for horrific crimes against outgroups.” Nationalism leads to immoral treatment, such as interfering with the right to immigrate.  The logic of Mr. Carens and Mr. Caplan discredits nationalist arguments around the world supporting immigration restrictions, not just those in the American context.

Given Planet Money’s focus on economics, the underlying question posed to the three experts about their preferred immigration regime may really have been: “From a purely economic standpoint, which immigration policy do you believe would most benefit current American citizens?” (Even within these parameters, the proposals of Mr. Peri and Mr. Baker are questionable; open borders, as Mr. Nowrasteh suggests, may have the most beneficial economic impact on the U.S.) Actual policymaking, however, should not exclude moral concerns. NPR should air another segment asking guests, “What would be a moral immigration policy?” That would help Americans think more profoundly about immigration policy.

Cato’s March 21, 2013 immigration event

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The video is embedded below.

  • For the first twenty minutes, Shikha Dalmia argues for more “low-skilled” immigration, citing some of the studies discussed at the suppression of wages of natives and US-specific suppression of wages of natives pages.
  • For the next twenty minutes or so, Stuart Anderson makes the case for “high-skilled” immigration and discusses some of the politics and real-world constraints related to green cards and H-1Bs.
  • For the next ten minutes, John Tyler of the Kauffman Foundation argues that immigrants are entrepreneurial based on some studies. The studies and related stuff are discussed here.
  • For the last ten minutes, Alex Nowrasteh discusses the impact of immigration on native wages, repeating some of the material covered by Shikha Dalmia from a somewhat different perspective. His discussion here builds upon his blog post on the subject. On the subject of the welfare state/fiscal burden objection, Nowrasteh discusses a Cato bulletin (and working paper) that I blogged about here.

You can also view the event on the Cato page here.

The Iraq War and open borders

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As the ten-year anniversary has made the Iraq War topical again, I thought it might be interesting to draw a few parallels between the Iraq War and open borders. For me, one of the most striking features of the Iraq War is the generosity of the war aims, at least as publicly declared. I find many of the critical suggestions made about the Bush administration’s motives, e.g. war for oil, as implausible as they are uncharitable, but if we put to one side the question of the “real” motives, the generosity of the motives that the Bush administration claimed to have make the Iraq War, as far as I know, a unique episode, and Bush a unique figure, in modern history. On the eve of the invasion, Bush said to the Iraqi people:

Many Iraqis can hear me tonight in a translated radio broadcast, and I have a message for them: If we must begin a military campaign, it will be directed against the lawless men who rule your country and not against you.

As our coalition takes away their power, we will deliver the food and medicine you need.

We will tear down the apparatus of terror, and we will help you to build a new Iraq that is prosperous and free.

In free Iraq there will be no more wars of aggression against your neighbors, no more poison factories, no more executions of dissidents, no more torture chambers and rape rooms.

The tyrant will soon be gone. The day of your liberation is near.

It is too late for Saddam Hussein to remain in power. It is not too late for the Iraq military to act with honor and protect your country, by permitting the peaceful entry of coalition forces to eliminate weapons of mass destruction. Our forces will give Iraqi military units clear instructions on actions they can take to avoid being attacked and destroyed.

I urge every member of the Iraqi military and intelligence services: If war comes, do not fight for a dying regime that is not worth your own life.

Here the stress is on liberation. The war aim is to deliver freedom to the Iraqi people, freedom from poison factories, execution of dissidents, torture chambers. Of course, just because this was a motive of the war doesn’t mean it was the motive. Maybe you could deny that Bush was even claiming that liberation was even a motive. That is, you could say that (Bush thought) the war was in the US national interest, but we happened to intend to conduct it in a way that would benefit the Iraqi people too, and by publicizing this intention beforehand we would reduce resistance and make the military’s job easier. But then consider Bush’s Second Inaugural.

We have seen our vulnerability – and we have seen its deepest source. For as long as whole regions of the world simmer in resentment and tyranny – prone to ideologies that feed hatred and excuse murder – violence will gather, and multiply in destructive power, and cross the most defended borders, and raise a mortal threat. There is only one force of history that can break the reign of hatred and resentment, and expose the pretensions of tyrants, and reward the hopes of the decent and tolerant, and that is the force of human freedom.

We are led, by events and common sense, to one conclusion: The survival of liberty in our land increasingly depends on the success of liberty in other lands. The best hope for peace in our world is the expansion of freedom in all the world.

America’s vital interests and our deepest beliefs are now one. From the day of our Founding, we have proclaimed that every man and woman on this earth has rights, and dignity, and matchless value, because they bear the image of the Maker of Heaven and earth. Across the generations we have proclaimed the imperative of self-government, because no one is fit to be a master, and no one deserves to be a slave. Advancing these ideals is the mission that created our Nation. It is the honorable achievement of our fathers. Now it is the urgent requirement of our nation’s security, and the calling of our time.

So it is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.

This is not primarily the task of arms, though we will defend ourselves and our friends by force of arms when necessary. Freedom, by its nature, must be chosen, and defended by citizens, and sustained by the rule of law and the protection of minorities. And when the soul of a nation finally speaks, the institutions that arise may reflect customs and traditions very different from our own. America will not impose our own style of government on the unwilling. Our goal instead is to help others find their own voice, attain their own freedom, and make their own way.

The great objective of ending tyranny is the concentrated work of generations. The difficulty of the task is no excuse for avoiding it. America’s influence is not unlimited, but fortunately for the oppressed, America’s influence is considerable, and we will use it confidently in freedom’s cause.

Note the universalism of Bush’s speech. Bush wants to “end tyranny in our world.” While he does represent this as being in the national interest, it is difficult to read this speech and think that Bush regards “ending tyranny in our world” as merely a means to an end (US national security). What other major public figure alive today has even paid lip service to such a lofty objective?

To critics of the Bush administration and the Iraq War, I would pose the question: Were Bush’s ideals too high? Was he wrong to (at least claim to) aspire to end tyranny in our world?

If so, why? Is it because he overestimated the value of freedom? Maybe freedom isn’t suitable for everyone? Maybe some peoples are “not ready for democracy,” or have different cultural values that make them prefer what a Westerner like Bush calls tyranny? Or is it that Bush was unrealistic, over-reaching, over-estimating America’s power to effect change? Is tyranny too entrenched, too grounded in human nature, to be overcome?

If not, what’s your alternative? How should we pursue the goal of ending tyranny in the world, if not by the means that Bush championed? It seems to me that the great disillusioned masses at both the popular and the elite levels have largely shirked this question. The general response seems to be to sneer, to dismiss Bush as dumb or whatever, to spin conspiracy theories or impute– possibly with justice, but that’s not the point– ulterior motives, and to try to forget the whole episode. The disillusioned have not tried to answer Bush’s high ideals with better high ideals. Rather, high ideals in general seem to have gone out of fashion. This is unfortunate.

Certainly, it seems unlikely that tyranny in our world will be ended in the fashion that America ended it in Iraq since 2003. The war was costly– perhaps $2.4 trillion— and neither the US nor other developed countries can afford to do that routinely. The regime in North Korea is still standing, possibly a worse tyranny than Saddam’s Iraq, and while there may be no other really totalitarian regimes left, Belarus, Vietnam, China, most of Central Asia, Saudi Arabia, and many other countries are unfree to an extent that a charge of “tyranny” might be appropriate. And while the war in Iraq has created a messy quasi-democracy in place of totalitarianism, in Afghanistan, where conditions were less favorable for democracy, a full Taliban restoration seems likely enough. Exporting institutions directly, via liberation, is too expensive and unreliable to be applied globally.

If we really want to end tyranny in our world, open borders will surely have to be a big part of the strategy. By realizing the right to emigrate on a global scale, we would free people to free themselves from tyranny. Emigres might then be a potent force for liberating their homelands, as I argued in “American Hajj: Towards an Open Society.” Unfortunately, the reaction against Bush has dispelled any consensus one might have hoped for in 2004 that we should be trying to end tyranny in our world. So this argument might have limited force just now. Incidentally, compare Bryan Caplan’s recent post “The Rights of the World’s Poor.” I like Caplan partly (let me mischievously suggest) for the same reason I liked Bush. High ideals.