Most of the time, the immigration policy debate is set up as being between nativists and advocates of unrestricted migration. I use the two extremes to characterize each side, but I mean to include all those in the middle that more-or-less can be ascribed to one camp or the other. I believe that migration should be unrestricted, although my opinion does not heavily weight short-run frictions that unrestricted migration inevitable produce. But, there is another side that isn’t as represented in the media, which is strange since it offers an opportunity to nativists to further bolster their case against free immigration. The argument is that migration may cause negative externalities in sending states.

The example I know, which I was exposed to in a comparative public policy course, has to do with what is referred to as the “reproductive division of labor.” These are jobs related to the caring for children. In developed economies, female migrants are a large chunk of this sector’s workforce. Indeed, the availability of migrant labor allows receiving state women to join other sectors of the workforce. From the perspective of the receiving state, this is great since it increases the overall productivity of the economy. Less productive labor takes over labor intensive stay-at-home jobs, and more productive labor can be allocated elsewhere. For sending states, however, this kind of migration can be particularly damaging.

A mother is an important facet of a child’s upbringing. In countries where the father usually has to work long hours, or where there may be no father at all, being raised motherless can lead to psychological issues that will impair the productivity of the future adult. Women looking to earn a living abroad usually, out of necessity, leave their families behind. This produces a negative externality, in that the costs to the child are, unintentionally or purely out of necessity, overlooked by the mother. This brings into question the aggregate gain of labor mobility.

I don’t think this is an argument against immigration, but it could be used as one. Maybe this is evidence of the fact that many of those who advocate migration restrictions are not basing their case on sophisticated theory. Rather, their opinions are nearsighted and non-academic. This doesn’t mean that the case against free immigration ought to be ignored. Most of the time those who oppose free entry of foreigners have a lot to lose. These are the short run frictions that I, as a neoclassical economist, tend to hold in less regard than the overall benefits of an increased labor supply. But, it is interesting just how little theory actually matters in this policy debate.

A second point, related to the first, stems from a response to these externality concerns that I wrote for the class. One of the papers I was responding to was actually written by my professor, and I wanted to bring an economist’s perspective to the topic. I think my objection is relevant to the immigration debate as a whole. I argued that there are costs and benefits to everything, but we can’t judge a policy on its costs or the costs of not implementing it. We also have to judge it on its benefits. It may be that sending states suffer a negative externality, but at the same time they benefit through remittances. They also benefit from improving terms of trade, as the markets they import from become more productive. In the case of psychological problems that motherless children may suffer from, it could be that a more productive global order will allow the sending state to develop institutions and firms to solve these issues in different, more efficient, ways.

The same holds true for nativist concerns. A good opinion on immigration will always consider the “big picture.” We don’t always have to agree on the implication of a broad cost benefit analysis, even if I think theory unequivocally supports the advocates of free migration.

As long as the immigrants pay for what they use, they do not make the rest of the society poorer. If increased population makes the country more crowded, it does so only because the immigrants produce wealth which is worth more to the owners of land than the land is worth, and the immigrants are able to use that wealth to buy the land. The same applies to whatever the immigrants get on the free market; in order to appropriate existing resources for their own uses, the immigrants must buy them with new goods of at least equal value.

— David Friedman, The Machinery of Freedom (New Rochelle: Arlington House, 1973), pp. 95–96.

It’s hard to put it any better. Many people, although probably less than in 1973, are concerned that a large immigrant population will require the pie to be cut into smaller pieces. The fact is, however, that in order to have a piece of the pie the migrant first has to produce a piece of his own that he can use to exchange. As such, if migrants are to find living in a foreign land successful they’ll have to add to national income, otherwise they can’t join in on the network of exchanges that makes up our economy.

Alvaro Vargas Llosa, at the Beacon, blogs on falling immigration rates during crisis years and border enforcement.  His main point is to deny border enforcement policy any credit for this phenomenon, instead allocating it to “supply and demand.”  I am not sure if Llosa is responding to some type of increase in frequency of commentary dealing with this topic, but academically I think few scholars attribute much success to border enforcement — in fact, U.S. immigration policy is known to be notoriously bad.  The crisis years evidence, for me, shows something different, although a bit more academic (and, I use “academic” loosely, since my experience with immigration theory is relatively short compared to the experts that have supplied me with any knowledge I might have): the “Neoclassical” model of immigration holds more weight than some people like to admit.

The “economistic”, or “Neoclassical,” model of immigration is basically a supply and demand one: immigrants are essentially arbitrageurs, taking advantage of wage discrepancies between countries.  This model has been lambasted for being simplistic and unable to explain the actual causes of migration.  It has been supplemented by a wide variety of alternatives: structural, linkages, networking , market segmentation and bifurcation, et cetera.  All these are more complicated, more in-depth theories that provide more specific causality to migration.  For instance, a Mexican might decide to immigrate because he has been displace from his agricultural employment by increased mechanization (structural) and he has family in the United States (linkages).  To show the advantages of these models imagine an obvious point of contention for the Neoclassical model: why do Mexicans immigrate to the United States in high volumes, but not Kenyans?  Or, why did the rate of immigration from Southeast Asian into the states suddenly rise after the 1950s?

The proponents of these theories, though, tend to be highly protective of their academic fiefdoms.  What occurs is outright rejection of rival models and theories, and the adoption of uni-causal reasoning that is insufficient to explain the wide-range of possible reasons that an individual might choose to migrate from one place to another.  For instance, most of the literature that I have been exposed to has rejected the Neoclassical model.

What the recent crisis shows is that while a single explanation might be inadequate, this inadequacy does not suggest irrelevance.  The Neoclassical model is quite applicable: a fall in incomes has led to a fall in the availability of jobs for Mexican immigrants, in turn causing immigration rates to fall.  Of course, the labor market is not one homogenous blob of employment opportunities, and so the Neoclassical theory has to be complimented with more advanced ideas: labor market bifurcation, segmentation, et cetera.  In fact, while it may be that in general Mexican labor has much lesser demand, certain industries (or sectors) have maintained their demand or even increased it.  Also, the Neoclassical theory does not explain why Mexicans emigrate back to their home countries, but many Asians do not.  What does explain it is something akin to the linkages or networking theories, or even a model that incorporates the costs of migration (related to distance, for example).  Nevertheless, wage discrepancies and the availability of employment is still an important causal factor behind migration movements.

More than the failure of border enforcement and immigration policy, what the recent crisis suggests to me is a failure of the academic community to put forward a synthesize and comprehensive theory of theories of migration.  Another manifestation of this is the the relative ignorance that most of the population suffers from regarding this topic: Neoclassical models are known more than the alternatives, even though academically it is the Neoclassical one which has been mostly abandoned.

Daniel Kuehn, Noah Smith, and others, are discussing immigration policy.  I have not read all the relevant posts, but from what I understand Smith is looking for immigration reform in favor of higher skill migrants and Daniel is not in favor of “subsidizing” one for the other.  For Daniel, low skill labor is just as useful and needed.  I think I agree more with Daniel.

Moreover, what does the data about high skill immigration really say?  There are foreigners who receive high levels of education in the United States and return to their home countries.  Current immigration policy also makes it much easier for high skill immigrants to gain permanent legal residency (maybe not as prioritized as family reunification, but far easier than other low-skill immigration — they have essentially no recourse for legal permanent residency and existing work permits are horribly designed).  But, some highly skilled foreigners make enough in their home countries to induce them to stay.  It is not all about income; there are other considerations people make before deciding to migrate (or before even deciding to think about migration).

I am sure that there are many highly skilled immigrants who cannot gain permanent legal residency (mostly because they cannot find sponsors).  But, is it bad enough to prioritize reforming immigration policy that affects only these types of migrants?  I am not so sure.