More From Borjas on Immigration in 1996

More from the 1996 Borjas article on Immigration I cited yesterday. All of this should be familiar to anyone who has been reading my posts. It’s also the same findings for which I keep getting attacked in comments. The funny thing is, numbers are numbers and the results are the same whether I do the analysis or a Harvard professor does it:

Consider the received wisdom of the early 1980s. The studies available suggested that even though immigrants arrived at an economic disadvantage, their opportunities improved rapidly over time. Within a decade or two of immigrants’ arrival their earnings would overtake the earnings of natives of comparable socioeconomic background. The evidence also suggested that immigrants did no harm to native employment opportunities, and were less likely to receive welfare assistance than natives. Finally, the children of immigrants were even more successful than their parents. The empirical evidence, therefore, painted a very optimistic picture of the contribution that immigrants made to the American economy.

In the past ten years this picture has altered radically. New research has established a number of points.

• The relative skills of successive immigrant waves have declined over much of the postwar period. In 1970, for example, the latest immigrant arrivals on average had 0.4 fewer years of schooling and earned 17 percent less than natives. By 1990 the most recently arrived immigrants had 1.3 fewer years of schooling and earned 32 percent less than natives.
• Because the newest immigrant waves start out at such an economic disadvantage, and because the rate of economic assimilation is not very rapid, the earnings of the newest arrivals may never reach parity with the earnings of natives. Recent arrivals will probably earn 20 percent less than natives throughout much of their working lives.
• The large-scale migration of less-skilled workers has done harm to the economic opportunities of less-skilled natives. Immigration may account for perhaps a third of the recent decline in the relative wages of less-educated native workers.
• The new immigrants are more likely to receive welfare assistance than earlier immigrants, and also more likely to do so than natives: 21 percent of immigrant households participate in some means-tested social-assistance program (such as cash benefits, Medicaid, or food stamps), as compared with 14 percent of native households.
• The increasing welfare dependency in the immigrant population suggests that immigration may create a substantial fiscal burden on the most-affected localities and states.
• There are economic benefits to be gained from immigration. These arise because certain skills that immigrants bring into the country complement those of the native population. However, these economic benefits are small — perhaps on the order of $7 billion annually.
• There exists a strong correlation between the skills of immigrants and the skills of their American-born children, so that the huge skill differentials observed among today’s foreign-born groups will almost certainly become tomorrow’s differences among American-born ethnic groups. In effect, immigration has set the stage for sizable ethnic differences in skills and socioeconomic outcomes, which are sure to be the focus of intense attention in the next century.

The United States is only beginning to observe the economic consequences of the historic changes in the numbers, national origins, and skills of immigrants admitted over the past three decades. Regardless of how immigration policy changes in the near future, we have already set in motion circumstances that will surely alter the economic prospects of native workers and the costs of social-insurance programs not only in our generation but for our children and grandchildren as well.

But let us be realistic. You don’t need to be a numbers person to reason any of this out. In the age of Google, all this is fairly obvious to anyone who cares to think about the issue.

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