I'm not sure why I did this, but something from last night got me curious about the effect of immigration on the economy in the broadest terms. That is, can we tease out any effect at the highest levels of economic activity? Here are naturalizations compared to GDP:
Naturalizations rose steadily through the mid-90s and then flattened. GDP just bounced around. There's nothing there. Now here are illegal border crossings vs income growth:
Oddly enough, there's a glimmer of something there. In the '60s border crossings rose and income growth went down. Over the next 30 years both were flattish. Then, in the teens, border crossings were down and income grew. But in 2021 it all falls apart, with border crossings skyrocketing and income growing strongly anyway.
Note that I'm measuring the income of the poorest quintile since it seems likely that low-income work is most affected by illegal immigration.
In any case, there's probably nothing much here. The economy putters along without taking much notice of immigration in any way. But it's possible that illegal crossings do have an effect on income growth at the bottom. Maybe.
Naturalizations is not really a measure of the number of immigrants coming into the country. There are two measures of the number of immigrants coming into the country -- the number of legal admission (i.e., "green cards") and arrivals of unlawful immigrants. The latter is very hard to measure but border crossings is a crude poxy for that.
The problem with naturalizations is that it doesn't measure arrivals at all. The people naturalizing have to have been legal immigrants for at least 5 years (with some exceptions) and most have been in the US for 7-10 years. The big spike in the mid-1990s was largely an artifact of the legalization programs of the Reagan era that resulted in many people becoming legal immigrants in 1989-91 even though they had mostly been in the US since the 1980s. Also there are spikes in presidential years and whenever there's a projected increase in fees.
Legal arrivals are pretty flat. The immigration system functions like a dam or a gate. People are queued up waiting for their green cards. When they're approved, they come regardless of the state of the economy. There have been gradual increases in legal immigration due to changes in the law. The 1990 Act led to more annual arrivals in the 1990s than had been usual since the mid-1960s. Further changes around 2000 increased the numbers to where they are today -- about 1.0-1.2 million new green cards per year. (The only deviations from this were due to security changes after 9/11 and the COVID disruptions.)
To the extent that in-migration flows vary, it's due to fluctuations in unauthorized immigration. There's fairly strong evidence that during the 1990s through about 2010-2011 that inflows RESPONDED TO THE ECONOMY and not the other way around. During recessions (when there are fewer jobs and labor force growth slows), fewer unauthorized immigrants came; during expansions (when unemployment is low and the labor force is growing) the number of arrivals increased. The relationship was "broken" during the Obama years as increased security and changes in Mexico disrupted the economy-immigration linkage.
Since about 2018, it appears to have been reestablished. The economic expansion post-COVID is correlated with increased arrivals. It's not clear that there's a linkage but there is a correlation.
+1
Not sure how there can be no impact on jobs when the supply of labor shifts due to undocumented workers. Without the additional labor, you'd expect pay to increase to attract more workers. Otherwise it would seem the correlation between labor supply and pay have no linkage.
What censustaker1 said.
Each instance of naturalization happens years/decades after each immigrant arrives, and varies dramatically between immigrants: some qualify for naturalization faster than others. Since most people start working (legally or not) and spending money immediately after arrival, the economic effects of immigrants being in the country are felt well before they get naturalized.
I wonder if Kevin might have the cause and effect relationship backwards. During US recessions, or periods of economic turbulence, migrants (really economic migrants versus true political migrants) have less incentive to come to the US.
Thus, migrants don't cause US cycles as much as they respond to US economic cycles.
Hello, reality. That actually makes sense.
CBO projects that net immigration in a couple of years will settle down to a level that's half or a third of the recent spike. Not sure what that projection is based on, but assuming it's right I wonder if it will coincide with a little more sanity in discussions about immigration policy. Because as it is, I find almost all talk about immigration these days sheer madness.
One party wants not only to stop new immigrants coming in, but its (apparently popular) proposal is to kick out 10 to 20 million current immigrants, many who arrived long ago. If that happens, will anyone care about a small, maybe even measurable effect on real GDP and income growth? I doubt it. The bigger question will be how did we get into our Second Civil War? Or how do we get out of it? Easier questions we may learn the answers to: How long does it take for food to rot in the fields because there's no one around to pick it up? How long before bacon really does double in price?
Does anyone care why immigrants are coming? You'd think in a nation of immigrants someone might. Does anyone care about the skyrocketing number of deaths among migrants after recent crackdowns? You'd think in a nation of immigrant someone might. Does anyone care about the role that climate change and political instability (both of which the US contributed to) is having on immigration today? You'd think in a nation of immigrants someone might.
I'd like to think some sanity may come after the election, but I won't hold my breath.
How do you define sanity?
My only comment would be that even for an intellectual like Kevin, on a board like this, it seems one answer would be to simply compare other first world countries.
There would not have to be many, and it would not have to be perfect, but take, say Japan? We all know Japan has interesting issues on age of population, but Japan has first world factories, and it does not have a border with, say, Mexico.
Does that mean there are less lower wage immigrants in Japan? Does that mean that factory workers in Japan are paid higher wages because of the lack of immigration? Or does it mean that without a constant supply of inexpensive labor, there is a limit on economic expansion? Has this inured to the benefit of the Japanese citizens who do not have to compete against immigrants for jobs?
My point being not to ask Kevin for research, but some of these questions are tough enough but are really tough when you try to draw some conclusions from data within one country alone, even a big ass country like the US.
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The filing was submitted by special counsel Jack Smith’s team following a Supreme Court opinion that conferred broad immunity on former presidents for official acts they take in office, narrowing the scope of the prosecution charging Trump with conspiring to overturn the results of the election he lost to Democrat Joe Biden.
full filing (pdf)
I think we can all accept that, regardless of immigration rates, what counts is the growth of a population. If the population shrinks, there are fewer consumers and less work is proportionally required. The GDP would be constrained and almost all gains would be from shifting labor up the income scale and from productivity gains, right?
Inherently, CBO's numbers reflect these assumptions in their projections of what a surge in immigration will do to the economy: a net $8.9T GDP increase over the next 10 years.
Since the Mayflower arrived, this continent has seen nothing but growth in the population, even through the Civil War period. In the early period following the Mayflower, almost all of the growth came from immigration. Why didn't the economy collapse before the nation could get started?
Because how a population increases is irrelevant.
People don't see the surge for what it really is: A retroactively-applied baby boom that (a) instantly revised the population pyramid and (b) will boost the US birthrate for a generation.
Check your implicit bias at the door when conceptualizing Econ 101.
There are so many factors that have an impact on economic growth that attributing anything in particular to variations in immigrant labor is not good methodology. I mean at the same time as the variations in immigrant labor, there are variations on interest rates, technology, crime, regulation, investment, energy prices, government spending, education, and so many more factors that are also always shifting around. And what's the cause and effect is hard to discern
Economists since time immemorial have been trying to figure out what causes economic growth and despite massive regression models and rather sophisticated modeling, I am not sure that they are very close to anything particularly conclusive.
If there's a connection, it's probably the other way around: As pressure to seek the same or higher wages rises, immigration increases.
It's not like they suddenly offer lower wages because there are immigrants. The immigrants have already left somewhere else for a reason.
This sounds like a question bigger than can be addressed by a guy who blogs as a hobby between cancer treatments, and whose primary expertise in economics is making graphs.
Probably, but bringing together data that already exists is definitely in his skill set.
Republicans hate immigration so democrats have to like it. Therefore, democrats make up reasons to like it. I suppose that is the argument. I have no idea if it’s right, but I suspect that the backlash is costing us in ways that aren’t showing up in economic statistics. Well, not yet anyway. How much is democracy, women’s reproductive rights, and civil rights etc. worth? I hope seeing the various newcomers are worth losing these other things.
Oh well. If it wasn’t immigration, trump would find 100 other reasons to blow it all up.
It may be worth pointing out that, in a previous world -- circa 1980-1985 -- there were splits in both parties on immigration. Among the Rs, the Wall Street/business interests favored immigration (cheaper labor, etc.) while the nativists disliked immigration, especially of people of color. On the D side, the more ethnic side favored immigration, especially POC while the unions disliked immigration. The union viewed immigrants as competitive for jobs and folks who drove down wages. The unions, in general, have changed their mind because they figured out that immigrants were potential members (and, in fact, have become major drivers of unionization, especiall of the SEIU).
I'm an old-fashioned center-leftist. I firmly believe in ZPG, and consequently oppose any amount of immigration that will increase the population.
Immigration into the US makes zero immediate difference in world population. It does increase consumption as people move from substinence to something well above that, which should have happened in their native country anyway if the country wasn't a mess.
OTOH, for most after they move to a more advanced country their birth rate goes down and certainly does for the next generation. This cultural shift also might have and in many cases already was happening in their native country mainly because of availability of birth control (which right wingers always oppose us helping with) and higher status of women.
Oh FFS, what an idiotic comment. I don't do any damn thing because I'm living in opposition to Republicans.
All I want is for the lackluster GOP to wake up and get over whatever ails them and for them to return to governing.
But I lived through the Golden Age of Congress, where bipartisanship made Ronald Regan look like a saint instead of a doddering old man with dementia.
Why does Kevin think that measured border crossings has anything to do with actual net illegal immigration?