Chapter 10

1. Chapter 10 Worker Mobility: Migration, Immigration, and Turnover

2. Table 10.1: Immigrants as a Percentage of the Labor Force, Selected Countries, 2002

3. Introduction • Determinants of worker mobility • U.S. immigration history • Characteristics of Mexican immigrants to the U.S. • The impact of immigrants on the U.S. economy • The immigration controversy

4. Characteristics of Movers • Age is the most important determinant of who migrates • Within age groups, the more education, the more likely one is to migrate

5. Table 10.2: U.S. Migration Rates for People Age 30-34, by Educational Level, 2005 (in percentages)

6. Determinants of Worker Mobility • A worker will migrate if the PV of the net • benefit is greater than the cost of the move. • Costs and benefits will depend on: • Push and pull factors: Employment conditions in sending and receiving place • Distance of move - moving, information, and psychic costs • For international migration, the distribution of earnings in sending and receiving countries. Positive vs. negative selection.

7. International Migration and Earnings • Immigrants Earn Less Than Natives On Arrival • The Earnings of Immigrants Rise Quickly • Recent Immigrants Are Unlikely to Achieve Wage Parity With Natives • Migration Investment Yields a Large Monetary Pay-Off for Most Immigrants

8. Figure 10.1: Male Immigrant Earnings Relative to Those of the Native-Born with Similar Labor-Market Experience, by Immigrant Cohort

9. U.S. Immigration History • Immigration was relatively unrestricted until Congress passed the Immigration Act in • 1924, which stipulated quotas based on national origin • In 1965, the Immigration and Nationality Act abolished quotas and made family unification the major criteria for immigration • Currently, U.S. policy toward illegal • immigrants is embodied in IRCA of 1986 and border enforcement initiatives

10. Table 10.3: Officially Recorded Immigration: 1901 to 2006

11. A Profile of U.S. Immigration • Almost 80 % of immigrants come from Latin America or Asia • In 2005, there were an estimated 41.9 million hispanics in the U.S, of which 16.8 million were foreign-born • Almost 1/3 of all foreign-born and 2/3s, or 10.9 million, of the foreign-born hispanics were of Mexican origin

12. A Profile of U.S. Immigration • Immigrants tend to settle in “gateway” states • Immigrants are more likely than natives to have low levels of education • Immigrants are more likely than natives to • be in low wage occupations, but the immigrants’ wages grow more rapidly • Immigrants are more likely than natives to receive welfare benefits

13. Mexican Immigration • The Bracero Program brought 5 million Mexicans to the U.S. between 1942 and 1964 • The intent of the program was to alleviate U.S. agricultural labor shortages during • WW11 • Illegal immigration to the U.S. accelerated after the end of the Bracero Program

14. Mexican Immigration • Estimatedannual illegal Mexican immigration has risen from 200k in the 1980s to 300k today • There are an estimated 11-12 million illegal immigrants in the U.S., half or more who are thought to be from Mexico

15. Mexican Immigration • Differences in human capital account for most of the large wage gap between native workers and Mexican-born workers • Annual wage comparsion • Native workers - $45,400 • Non Mexican Immigrants - 37,000 • Mexican Immigrants - 22,300 • Mexican-born workers are concentrated in a few low skill, low wage occupations

16. What are the positive effects of immigration? • Effect on consumer prices • Effect on business profits • Effect on demand for goods and services

17. What are the negative effects of immigration? • Wage effects - Negative impact is largest on low-skill natives and previous immigrants. • Income distribution effects - Immigration • may be a factor in the increase in income inequality in the U.S. • Fiscal effects - Immigration may increase the fiscal burden of state and local governments

18. Figure 10.2: Demand and Supply of Rough Laborers

19. Are Gains from Immigration Greater than Losses? Most economists conclude that the overall impact of immigration on the U.S. economy is small, but positive

20. What Is The Impact On Mexico? • Benefits • Absorbs surplus labor • Remittances are an important source of income for families and foreign exchange for the nation • Immigration provides a political safety valve

21. What Is The Impact On Mexico? • Costs • Loss of millions of young and ambitious workers • Tensions with the U.S.

22. If The Net Economic Effects Are Positive For The U.S.,What’s The Problem? • Illegal immigrants and employers are • breaking the law • National security - Porous border increases • the terrorist threat • Impact on native workers wages and jobs • Problems with assimilation of poorly-educated • and low-income hispanics

23. Alternative Solutions - Enforcement Only • Build a border fence and strengthen human • and non human border surveillance • Tighten employer hiring practices and • sanctions • No legalization (amnesty) • Guest worker program (maybe)

24. Alternative Solutions - Legalization and Guest Worker Programs • Path to citizenship for some illegals • Guest worker program • Tighten employer hiring practices and • sanctions