Saturday, March 24, 2012

Smart Immigration Policy

Almost everyone is at least a little suspicious of out group members, so it should come as no surprise that most citizens view foreigners who want to live and work in their country with suspicion. Immigrants tend to be blamed for many negative things. They are accused of taking away jobs that citizens believe should be reserved for them and quite a few countries have laws saying a company can only employ a foreign national if they can show that a citizen could not be found to fill. The presence of foreign labor is frequently protested when labor markets are tight and in some countries this has reached the point of violence and mass displacement of immigrants. Immigrants are disproportionately blamed for crime. Some think immigrants come to live off welfare systems at the expense of citizens. Still others see immigrants as a threat to national culture e.g. Muslims are frequently seen as threat to countries with a Christian or secular history, and no doubt visa versa. Then there is outright racism or ethnocentrism.

To be fair suspicion and hostility aren’t the only reactions to immigrants. Some do view them positively. However on balance feelings are negative. So much so that between half and two thirds of the adult population of the USA wish to see immigration reduced from current levels, and only 5-10% wish to see it increased.

Before discussing empirical findings on the various purported pros and cons of immigration, and various intellectual arguments around it, I want to explore what intelligent opinion has to say about the issue.

The General Social Survey has a number of questions around the possible effects of immigrants. For each alternative on each question I tabled the percentage of public support and a Smart Vote score. The Smart Vote score is a measure of how much and in which direction IQ variations are related to an opinion. It is calculated as follows.

I calculate the ratio of the probability that the smartest and dullest IQ groups will support an alternative i.e. p(IQ>116)*(1-p(IQ<85))/((1-p(IQ>116))*p(IQ<85)) – call this the extreme ratio. Next I calculate the same for the intermediate IQ ranges i.e. p(IQ 100-115)*(1-p(IQ 85-99))/((1-p(IQ 100-115))*p(IQ 85-99)) – call this the intermediate ratio.

The Smart Vote score is 100*√((3*extreme ratio + intermediate ratio)/4)

I restricted the analysis to white opinion only because race is likely to be a strong confounding factor regarding immigration.

The table can be seen below.



Overall it seems more intelligent opinion thinks immigrants are good for America and that they contribute to improving America and making it more open. More intelligent opinion denies that immigrants make things bad. The Smart Vote is against immigrants increasing crime, taking away local jobs or undermining national unity. Finally more intelligent opinion is that there a small but non-zero chance that immigrants lead to economic growth. In short, the more intelligent the person the more likely they are to think that immigrants are not bad but good for America. The general public however tends to think unintelligently on immigration taking jobs away and undermining national unity.

In line with this more intelligent opinion is also in favor of treating immigrants better. The table below shows that more intelligent opinion is in favor of solid rights for immigrants, and that it doesn’t think immigrants are too demanding about it. More intelligent opinion is also in favor of helping immigrants overcome bias and extending government assistance if needed and doesn’t think the government spends too much on them.



On the other hand more intelligent opinion is against illegal immigrants getting work permits and access to public education. However, intelligent opinion seems neutral on whether the US should exclude illegal immigrants altogether. Finally, should the USA let in more or fewer immigrants? In spite of intelligent opinion regarding immigrants as a good thing generally this doesn’t translate into advocating letting in more of them. More intelligent opinion seems to think current immigration rates are close to ideal. Overall, more intelligent opinion is for assisting legal immigrants to overcome problems and bias, and perhaps granting them equal rights, but for keeping the rate of immigration close to the current rate. The majority of the general public, however, seem to lean toward the less intelligent choice of being unhelpful to immigrants and toward greater exclusion of them – both legal and illegal.

Before we accept this picture the issue of special interests associated with intelligence need to be addressed. The following table is a summary of the multiple regression results on all the questions dealt with above, controlling for education, income, gender, age and ideology. Race is already controlled for because all results apply to white opinion only. The table shows the significance level achieved and the direction of the relationship.
** Means a significance level > 5% but less than 10%.



Note that the more intelligent view i.e. the Smart Vote, that immigration is good rather than bad, is confirmed. On the other hand it seems the seemingly intelligent view that legal immigrants should be assisted and granted equal rights, or that illegal immigrants not be given access to work permits or public education, is probably special interests speaking rather than intelligent opinion per se. The intelligent opinion that current rates of legal immigration are about right is confirmed.

It seems that increased education in the US leads to a strong pro immigrant attitude across the board. The interests associated with gender or income differences don’t seem to matter much. A Conservative outlook is associated with believing immigrants lead to crime and unemployment, with the view that they shouldn’t be assisted or given more rights and the view that illegal immigrants should be totally excluded. Liberals tend to hold the opposite view. Surprisingly, at least to me, is that while older people tend to reject giving immigrants greater rights or helping them they are more inclined to think immigrants are good rather than bad for America than are younger people.

To summarize – the smartest view on immigrants is that they are good and not bad for America, and that the current rate of legal immigration is about right. Whether to help them or give them greater rights is unanswered. The general public’s view however is that immigrants do have a few bad effects and leans towards reducing the rate of immigration generally.

Why should we restrict immigration?

So much for the arrow of the Smart Vote in the absence of evidence and argument, but what does the evidence say? Here are some of the findings.
The labor force participation rate among immigrants is higher than that of the native born and higher still among illegal immigrants1.

Immigrants tend to self select states with lower social or welfare spending especially illegal immigrants who have no reason to favor welfare states since they aren’t eligible. Immigrants clearly aren’t moving in order to live off American welfare1.

The fiscal effects of illegal immigrants was very slightly negative – they consumed 24.4% more in services than they paid in taxes - but the economic effects are very strongly positive – over 35 times the fiscal loss!2

Since people don’t like paying for people different from themselves immigration will undermine welfare spending and not increase it.

Low skilled immigrant labor frees high skilled natives to do more productive work thereby increasing the growth rate.3

Low skilled immigrants e.g. those whose comparative advantage is manual labor, open up slightly higher level coordination and integration jobs for low skilled natives who speak English, and improves their pay.3

Immigration keeps America young and mostly working – good for growth and maintaining the social security system.4

Immigrants have lower per capita crime rates.

Border enforcement is costly – much more so than the fiscal costs incurred by illegal immigrants.

What we gleaned from intelligent opinion alone is correct – immigration is good and not bad for America.

Why should they be treated as criminals for wanting to do an honest day’s work? Why should a free transaction between a US citizen and a foreigner be banned? Free trade is almost an article of faith among economists of all ideologies so why not free trade in labor? The most convincing arguments I’ve seen for open immigration are those of Bryan Caplan – professor of economics at George Mason University. I lifted the following verbatim from his blog EconLog.

Many libertarians would condemn [the American government's treatment of immigrants] as "inexcusable." I rest my argument on a weaker premise: whether or not the facts are "inexcusable," they do require an excuse. On the surface, it seems wrong to prohibit voluntary exchange between natives and foreigners. Proponents of immigration restrictions have to show why, moral appearances notwithstanding, immigration restrictions are morally justified.

They fail to do so. Immigration restrictions are not necessary to protect American workers. Most Americans benefit from immigration, and the losers don't lose much. Immigration restrictions are not necessary to protect American taxpayers. Researchers disagree about whether the fiscal effects of immigration are positive or negative, but they agree that the fiscal effects are small. Immigration restrictions are not necessary to protect American culture. Immigrants make our culture better--and their children learn fluent English. Immigration restrictions are not necessary to protect American liberty. Immigrants have low voter turnout and accept our political status quo by default. By increasing diversity, they undermine native support for the welfare state. And on one important issue--immigration itself--immigrants are much more pro-liberty than natives.

Even if all these empirical claims are wrong, though, immigration restrictions would remain morally impermissible. Why? Because there are cheaper and more humane solutions for each and every complaint. If immigrants hurt American workers, we can charge immigrants higher taxes or admission fees, and use the revenue to compensate the losers. If immigrants burden American taxpayers, we can make immigrants ineligible for benefits. If immigrants hurt American culture, we can impose tests of English fluency and cultural literacy. If immigrants hurt American liberty, we can refuse to give them the right to vote. Whatever your complaint happens to be, immigration restrictions are a needlessly draconian remedy.

Elsewhere Caplan argues that immigration is fantastically beneficial to immigrants themselves. Unskilled labor from the developing world earn on average 10 times more in the developed world as they would in their country of origin, and that open immigration globally would double global GDP. Open immigration is by far the best anti-poverty measure in existence.

Mat Yglesias on Moneybox (part of Slate) – another superb commentator but from a different ideological camp to Caplan – argues that immigration should lead to improved labor conditions in the country of origin, because good workers would vote with their feet and employers would have to increase wages and improve working conditions to compete. He has also argued that immigrants (including illegal immigrants) will need houses, food, medicine, transport, clothing, entertainment, etc which means more business for suppliers of those things and therefore more jobs for locals.

Intelligent opinion is that a policy of increasingly restricting immigration is likely to be stupid and badly thought through. The arguments and evidence above strongly confirm that view. I don’t know why the Smart Vote is not more frankly for open immigration.

References

1. Immigration and the Welfare State by Daniel T Griswold
2. Immigration and Economic Growth by Gordon Hanson
3. Immigration, Labor Markets and Productivity by Giovanni Peri
4. America’s Demographic Future by Joel Kotkin & Erika Ozuna
5. Why Should We Restrict Immigration? by Bryan Caplan
6. Economics and Immigration: Trillion Dollar Bills on the Sidewalk? by Michael A Clemens

8 comments:

  1. Do you ever take into the consideration that the Smart Vote and Dumb Vote might more represent different interests rather than cognitive differences?

    Immigration seems like a pretty clear case where that might be the case. Immigrants disproportionately compete with dumb people for jobs. Which is good for smart citizens, since they get cheaper labor and bad for dumb citizens as their wages and employment opportunities are diminished.

    ReplyDelete
    Replies
    1. Yes of course. That's what the regression analysis is for - to control for those interests. One of the variables in the regression is the income you mention. Another is education. The Smart Vote is what survives that control.

      By the way, the evidence I included shows that immigration is good for the dumb too.

      Delete
  2. Garth,

    Have you done this for global warming? I like your method of analysis, and would like to see it applied to a case where I think I disagree with the smart-fraction consensus.

    Regardless, very nicely presented.

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    Replies
    1. I have but not in enough detail for a post. Part of the problem is that the GSS doesn't ask the right question. I also haven't done the control for interests exercise yet. That said I recall the SV suggesting that global warming is real and probably serious enough to need to do something about but that the economy is not less important.

      There will be some disagreement. I certainly have a few. I developed a test based on over 140 SV issues, and even the best scorers (within Mensa) got only 70% of the maximum i.e. about 1 in 3-4 of their opinions is daft.

      Delete
  3. Did the questions in the survey allow you control for how informed the respondents were on the issue? It seems like that is a big possible confound and that the actual relationship might be that the more informed one is about immigration and its effects, the more likely one is to be supportive of immigration.

    ReplyDelete
  4. This gave me an idea.

    If I assume that the smart vote are in fact gathering and weighing evidence better than the other votes, then it isn't surprising they could get the warming evaluation off.

    The available evidence is ambiguous. To go against Mann et al I have to figure out that modelling is too difficult or go off the beaten path entire and find that CO2's absorption band is already saturated.

    While most every scholar and thinker has a high IQ, far from every high IQ is a scholar.

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  5. I'm disappointed this post fails to address language issues. Growing up in a heavily immigrant area of a city, it was clear this is a huge practical issue, for schooling particularly. I won't go into detail, but supporting non-english speaking students is very expensive and inevitably drags down standardized testing scores and graduation rates. This is made harder to cope with because schools are funded by property taxes, (low in immigrant areas,) and there is not much appetite for funding low-achieving, "wasteful", "loser" schools.

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