A fresh vegetable imported from Mexico cannot protest, demand social services, or vote. But a migrant worker from Mexico who tends vegetables on a U.S. farm might someday do all three. Is this a legitimate cause for concern? Many Americans worry that immigrants from poorer countries, like Mexico, might eventually undermine the very freedoms that created the prosperity that has attracted them to the United States. But new evidence casts doubt on these fears.
Louisiana Governor Bobby Jindal (R) echoed the sentiments of many when he recently said of immigrants, "in many ways you're looking at folks that want to come and, in some ways, they want to overturn our culture--they want to come in and almost colonize our countries." George Borjas, a Harvard economist and an immigrant from Cuba, shares this fear.
In a recent paper, he worries that large-scale migration could undermine institutional quality in the United States such that it starts to resemble that of the poorer countries that many immigrants have left behind. In turn, this predicted transformation could "easily turn a receiving country's expected (static) windfall from unrestricted migration into an economic debacle."
One truth, however, shows the fallacy of that idea: The economics of international trade in labor (immigration) is not fundamentally different than that of trade in goods. Exchange in each type of market allows for greater specialization that boosts productivity and creates economic windfalls for both trading partners. The fear is that immigrants might also bring non-economic baggage that undermines the economic freedoms that make us productive and prosperous.
There is some merit to these fears. The U.S.-based General Social Survey reveals that immigrants tend to hold more anti-market views than the native-born population. However, the magnitude of the difference is small.
Immigrants also influence the policy views of the native-born population. Many academic studies have found that increased immigration tends to make the native-born population less receptive to having a large welfare state.
The question of how immigrants might influence institutions is ultimately an empirical one. Two recent studies shed light on the question.
In the first study, economists Zach Gochenour and Alex Nowrasteh looked at how immigration to the various U.S. states from 1970 to 2010 influenced government spending on welfare, K-12 education, Medicaid, and unemployment insurance. They found that immigration did not influence total expenditures or per-capita expenditures in any of these categories. In short, immigration had no net effect on the size of the welfare state.
In the second study, I, along with four co-authors, ask the question: Does immigration impact institutions? Our approach involved analyzing data from more than 100 countries, including some that varied widely with respect to immigrant populations. Some had virtually no immigrants, whereas others had immigrants comprising as much as 77 percent of their population.
We measured institutional quality using the Economic Freedom of the World Annual Report, which employs a much broader measure of institutional quality than just the size of the welfare state. It includes private-property protections, regulation, sound money, and freedom to trade internationally, in addition to the size of the government.
We analyzed how the beginning stock of immigrants in 1990, accumulated over prior decades, influenced the change in economic freedom between 1990 and 2011. We also examined how the flow of immigrants impacted freedom over that same timespan.
No matter what other variables we included in our statistical analysis, we never found that greater immigration decreased economic freedom. To the contrary, we frequently found that a larger stock or flow of immigrants increased a country's economic freedom. This finding held up even when we focused only on immigrants from poorer countries.
The consensus view of social scientists who study immigration is that immigration creates net gains for the world economy, the immigrants themselves, and native-born persons in destination countries. Much less is known about how immigrants might impact a destination country's economic institutions. But early evidence indicates that immigrants are more likely to enhance our economic institutions than they are to destroy them.