Tag Archives: high versus low skill

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.

Positive Political Externalities

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As fellow blogger Nathan Smith has argued before, the basic problem of political externalities is an essentially solved problem. To summarize, giving immigrants the vote is not a necessary addition to giving them the right to immigrate here. But can immigrants actually be a beneficial political externality? I’m going to try to examine the argument in favor of that. I should note that I will be working on the assumption that an increase in support for capitalism is a positive externality, so this argument is primarily for those with more conservative or libertarian views given that  they tend to show more support for increased immigration restrictions.

One can point to certain anecdotal examples. David Henderson for instance has fairly recently blogged about his efforts in blocking local tax increases in his community. Here is an example of a Canadian immigrant helping to improve (at least from a perspective of economics) political outcomes in the place he has chosen to move to. However, Dr. Henderson is also a very particular kind of high-skill immigrant, namely an economist. So are high skill immigrants more generally likely to improve the political situation of the country they move to? Some examples, both current and historical might be useful in this case.

To start, let’s examine Southeast Asia. Southeast Asia has a long history of Chinese immigrants, often including many high skill emigrants such as merchants and businessmen. Today though, three countries stand out as having a large proportion of ethnic Chinese in their populations (in order from most to least): Singapore, Malaysia, and Thailand (with nearly 77%, nearly 24%, and 14% of their populations being Chinese respectively). Singapore may be an unfair example due to its small size and location as a convenient port-of-call going through the Straits of Malacca, so in the interest of looking at a more “apples-to-apples” type comparison, let’s forget about Singapore. Even discarding Singapore however, the institutions and economic success of Thailand and Malaysia stand out compared to the rest of South East Asia. Of all the countries in Southeast Asia (for this discussion that area including Myanmar, Laos, Vietnam, Cambodia, Thailand, and Malaysia) only Malaysia and Thailand manage to qualify for the label “moderately free” on the Heritage Foundation’s index of economic freedom, the rest of the region being labeled “mostly unfree.” Turning then to economic performance, the results are also significant.

On the general Human Development Index, Thailand and Malaysia both easily beat the rest of their region. This is also reflected in their GDP per capita numbers, with less wealthy Thailand having three times the GDP per capita as the richest country of the rest of the region, Vietnam. This result does not come from a sending country with superior institutions thereby simply bringing Malaysia and Thailand up to China’s level. Malaysia and Thailand both currently outperform China on GDP per capita, are far higher ranked on the economic freedom index, and while Thailand and China have similar HDI rankings, Malaysia clearly surpasses China.

This “immigration leading to better institutional outcomes than was the case in either the sending or receiving country” outcome makes sense once one remembers that immigrants are self-selecting. This is especially the case with high-skill immigrants whose education will tend to be correlated with more pro-capitalism conclusions (full text should be freely available, worked for me anyways). While it should be emphasized that education is not necessarily the cause of pro-capitalist conclusions, the correlation can be used to the advantage of immigrant-receiving countries. Large numbers of educated immigrants with the ability to impact politics would tend to lead to outcomes that libertarians would tend to prefer.

So the upshot for those worried about killing the goose that lays the golden egg, allow me to offer a different keyhole solution. Maintain open borders for the economic benefits, and then require immigrants to attain a certain level of education before being allowed voting rights. The result can then be that countries receiving immigrants can not only improve their economies, but their political structures as well.

Why are academia and Silicon Valley pro-immigration?

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Restrictionists often argue that immigration suppresses native wages. How, then, do they explain the significant economist consensus in support of more expanded immigration? They rely on a mix of arguments such as the economist blind spot, elite conscience salve, and other attacks on advocates. The subtext of these, particularly the elite conscience salve, is that most open borders advocates don’t have to live the adverse effects of immigration. In this telling, open borders advocates, safe in their ivory towers from the unwashed masses, can declare open borders and shrug their indifference to the annihilation of their less fortunate fellow nationals.

As a factual matter, George Borjas (the man most quoted by restrictionists on economic matters) found that in the short run in the US, college graduates lose more from immigration compared to ordinary Americans, and lose less only compared to high school dropouts. I’m personally unconvinced by Borjas’s pessimistic estimates, and find the more optimistic estimates of the impact of immigration more convincing. However, that’s not a topic I want to get into in this blog post. Rather, in this blog post, I want to consider two stereotypically high-skilled profession types where people within the profession (including many who aren’t open borders advocates) actively advocate for more immigration of people who would specifically compete with them for jobs. I’m talking about academia and Silicon Valley, both in the United States context.

The case of academia

In the United States, academia is one realm where the current immigration regime is closest to free migration. Student visas are not always granted, but it’s easier to get a student visa than a H1B visa, and it’s definitely way way easier than getting an unskilled work visa (the H2A visa category). For post-doctoral and tenure track positions, academia has successfully been able to exploit a loophole in the H1B regime. The H1B regime states that a H1B work visa can be granted only if it’s convincingly demonstrated that no qualified American could be found for the job. In academia, it is usually pretty easy to set forth a collection of job requirements (such as papers on a specific subset of topics) that are satisfied by only one person on earth. It’s much harder to use this trick to hire people in other high-skilled jobs, and nearly impossible to use the trick for “low-skilled” jobs like restaurant worker or farm worker. The point is not just that the law has a practical loophole, it’s that immigration officials generally let people get away with it. Bryan Caplan explains this between 22:30 and 25:00 of his immigration restrictions video. And Caplan also notes in this blog post that academia already has de facto free immigration. Continue reading Why are academia and Silicon Valley pro-immigration? →

Has the era of mass migration come to a close?

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Thomas Sowell’s Migrations and Cultures is an excellent book. Whether talking about Indian immigrants in Uganda or Jews or overseas Chinese, Sowell demonstrates page after page how anti-foreign bias combined with standard restrictionist arguments lead to harrassment and intimidation of market-dominant minorities, mostly immigrants and their descendants. And he shows, with one example after another, how these actions ultimately hurt the natives themselves once the market-dominant minorities pack up and leave, or are forcibly expelled.

Given the contents of the book, I furrowed my brow that the most salient review blurb was from US restrictionist (and himself an immigrant from Canada) Peter Brimelow (author of Alien Nation and founder-cum-editor of VDARE). Here’s what the blurb says (emphasis mine):

Thomas Sowell is one of the wonders of the American intellectual world…Not only is the book crammed with detailed research that even experts will find instructive, but it is willing to look unflinchingly at evidence that suggests migration can be bad as well a good — and even that the era of mass migration may be coming to a close.

So I thumbed back to the conclusion of the book. The last few pages of the conclusion seem to be informed speculation about the future on Sowell’s part, rather than a summary of the book’s contents. So, agreement or disagreement with these could be quite independent of agreeing or disagreeing with the historical analysis presented by Sowell. Continue reading Has the era of mass migration come to a close? →

Why put people behind doors?

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The high versus low skill distinction in the immigration debates is back in the news. A recent bill that would reallocate US visas from a diversity lottery to people with STEM degrees failed to pass in the US House of Representatives on Thursday (September 20). In response, pro-immigration economist Alex Tabarrok wrote a blog post Still the No Brainer Issue of the Year linking back to his earlier piece The No Brainer Issue of the Year. Tabarrok quoted his own earlier piece:

Behind Door #1 are people of extraordinary ability: scientists, artists, educators, business people and athletes. Behind Door #2 stand a random assortment of people. Which door should the United States open?

Tabarrok is considering a hypothetical: suppose there were a limited number of people that the United States could offer admission. What people should it pick?

I think that, from the viewpoint of global benefits, particularly the innovation case for open borders, Door #1 is the right choice. However …

The dilemma posed by Tabarrok is fundamentally artificial. Alex Nowrasteh has pointed out in many blog posts (here and here) that the fundamental problem with immigration systems is not who gets to immigrate, but how many. In other words, there are artificial quantity restrictions on immigration that should be lifted or relaxed. Nowrasteh makes this point in the context of comparing auctions and tariffs as means to regulate immigration, and his argument is that auctions don’t make sense because the quantity restriction is artificial. Donald Boudreaux makes an important point in favor of low-skilled immigration here and Bryan Caplan makes another interesting observation here (more at the high versus low skill page).

Tabarrok’s dilemma reminds me of the many problems of lifeboat ethics. Lifeboat ethics dilemmas usually go as follows: you have a single lifeboat, and can only rescue a subset of people who are in danger of dying. What subset should you choose? How much value should you place on the lives of different people? Lifeboat ethics questions are fascinating and yield important moral insights, but they are hard precisely because they do not describe the ordinary real world. The equivalent to the Tabarrok context would be that there are enough lifeboats to rescue everybody but somebody for some reason decided to deploy only one of the dozens of lifeboats, and forbade other people from deploying the other lifeboats. (see also the killing versus letting die distinction).

Stepping back from the lifeboat analogy to the closed doors analogy, it strikes me as questionable that people should be getting put behind closed doors in the first place. Why build two doors, and then ask a third party to pick? This, after all, is not a reality show game of picking between cars and goats. The people behind the doors are real people with aspirations, dreams, and rights. If there were a genuine lifeboat-type situation where only a certain number of people could be allowed to immigrate, then Tabarrok’s arguments are valid and important. But the first point of order should be to question the premise of quantity restrictions, not to solve a constrained optimization problem.

I should close by saying that it isn’t Tabarrok himself who advocates the quantity restrictions. Tabarrok is in favor of expanded immigration of all sorts — see here and a more complete list here. So, when he chooses the lesser of two evils, it would not be appropriate to blame him. He may also be right that shifting existing visas to high-skilled workers may be the only politically realistic goal in the United States at present (though it seems that that, too, isn’t quite working out). But it’s also important to question the premise of quantity restrictions.

PS: A bunch of links with speculation on what would happen if the United States lifted all quantity restrictions on immigration is available at the swamped page of this website.

UPDATE: Alex Tabarrok responds with a tweet here saying “Yeah, I tend to agree. My pt. is that high-skill imm. is a no-brainer for people in US and if we can’t agree on that… “