Immigration, integration and fiscal sustainability

Economic theory points out that immigration of even low-skilled immigrants may improve public finances in Western welfare states, and it is sometimes suggested that fiscal sustainability problems in Western countries caused by ageing populations could be solved by increasing immigration. We examine consequences of various immigration scenarios using the large-scale computable general equilibrium model Danish rational economic agents model describing the Danish economy. It turns out that increased immigration will generally worsen the Danish fiscal sustainability problem. Improved economic integration of immigrants and their descendants, however, may alleviate the problems of the public sector considerably. Responsible editor: Klaus F. Zimmermann     

The US National Intelligence Council on Growing Global Migration

The National Intelligence Council, a body reporting to the Director of Central Intelligence, brings together expertise from inside and outside the US government to engage in strategic thinking on national security issues. Some of its reports, known as National Intelligence Estimates, are now issued in unclassified versions. One of these published in December2000, was entitled Global Trends 2015: A Dialogue about the Future with Nongovernment Experts. It discussed what it termed the key drivers of global change and presented a generally bleak set of scenarios of the medium‐term future. (See the short review in PDR 27, no. 2, pp. 385–386.) Demographic factors—in particular, mass migration—were seen as one of the drivers. This topic is investigated further in a subsequent NIC report, Growing Global Migration and Its Implications for the United States, issued this year. The initial section of the report, headed Key Judgments, is reprinted below. The report emphasizes the economic advantages of liberal immigration policies to the advanced economies, “despite some initially higher welfare costs and some downward pressure on wages.” Resistance to liberalization in European countries and Japan is seen as putting them at a competitive disadvantage to the United States. Their levels of illegal immigration, however, will inevitably increase in scale. Expectations for the US are for rises in both legal and illegal immigration. Mentioned as one of the “difficult issues” that are minor offsets to the broad gains offered by immigration is its use as a vehicle for “transnational terrorist, narcotrafficking, and organized crime groups.” The full report is available online at http://www.cia.gov/nic/pubs/index.htm .     

Frank Fetter on Population Versus Prosperity

How population change affects human welfare was a central concern of economists during the decades that followed publication of Malthus's Essay. But from the middle of the nineteenth century, continuing for some one hundred years, population issues played a marginal role in economics, with leading figures of that discipline, particularly in the New World, turning their attention to the topic only episodically. The presidential address delivered by Frank Fetter to the American Economic Association in 1913 is a notable example of such attention. Frank Albert Fetter (1863–1949), much of whose career was spent as professor on the faculty of Princeton University, was a prominent economic theorist of the early decades of the twentieth century and author, among numerous other works, of the influential texts Principles of Economics (1904) and its two-volume successors, Economic Principles (1915) and Modern Economic Problems (1916 and 1922). Population was an early interest of Fetter's, as is shown by the topic of his doctoral dissertation, which he wrote, after studies at Indiana University, Cornell, and the Sorbonne, at the University of Halle (Versuch einer Bevölkerungslehre ausgehend von einer Kritik des Malthus'schen Bevölkerungsprincips, Jena: G. Fischer, 1894). His address to the AEA recalls that interest, looking back on the decade ending in 1910, a period of rapid population increase in the United States, fueled by heavy immigration. In the first part of the address, Fetter offers insightful comments on Malthus's novel humanitarian and democratic formulation of the population problem and on the contrasting demographic situation between Europe and the United States. But with the closing of the land frontier he sees American exceptionalism coming to an end, as the economic forces—abundant natural resources and progress in science and the “technical arts”—that heretofore counteracted the depressing effect of population growth on wages “have spent themselves.” At a time when the US population was about one-third of its present size, he argued that “we have passed the point of diminishing returns in the relation of our population to our resources.” Therefore “it is high time to revise the optimistic American doctrine of population.” To control “the fate and fortunes of the children of this and future generations,” the US would need a policy of conserving natural resources and retarding the increase of population. Of the two components of population growth—natural increase and immigration—only the latter is “controllable in large measure by legislative action.” Fetter thus devotes the second part of his address to a discussion of the effects of immigration on the American economy. His line of argument closely parallels an influential strand in the contemporary US debate on that issue. In the first decade of the century, the population of the United States grew by some 16 million and the number of immigrants was nearly 9 million. Fetter sees the potential for further immigration as nearly limitless, given an open-door policy. The motive to migrate to the United States would not cease “until real wages in America are leveled down to those of the most impoverished populations permitted to enter our ports.” Yet reducing American prosperity would afford “no permanent relief to the overcrowded lands,” as “natural increase quickly fills the ranks of an impoverished peasantry.” While unrestricted immigration is against the interest of the mass of the people, conflicting interests, ideas, and sentiments paralyze remedial action: individual or class advantage comes before consideration of the “larger national welfare.” Unless immigration is restricted, Americans may find “that they have bartered the peace and security of their children for the pleasures of a brief season.” The text of Fetter's address is reproduced below in full from American Economic Review, vol. 3, no. 1: Papers and Proceedings of the Twenty-fifth Annual Meeting of the American Economic Association, March 1913.     

Interior Immigration Enforcement and Political Participation of U.S. Citizens in Mixed-Status Households

The 2000s have witnessed an expansion of interior immigration enforcement in the United States. At the same time, the country has experienced a major demographic transformation, with the number of U.S. citizens living in mixed-status households—that is, households where at least one family member is an unauthorized migrant—reaching 16 million. U.S. citizens living in mixed-status households are personally connected to the struggles experienced by their unauthorized family members. For them, immigration policy is likely to shape their current and future voting behavior. Using data from the 2002–2014 Current Population Survey Voting and Registration Supplements, we examine whether intensified immigration enforcement has affected the political engagement of U.S. citizens living in mixed-status households. We find that immigration enforcement has chilled their electoral participation by lowering their propensity to register by 5 %; however, it has not visibly affected their voting propensity among those registered. Importantly, their lower voting registration likelihood does not seem to reflect indifference for community and public matters, given that it has been accompanied by greater involvement in civic forms of political participation, such as volunteering. Understanding how immigration policy affects the political participation of a fast-growing segment of the electorate is imperative because they will inevitably constitute a rapidly rising political force in future elections.     

Brain drain or brain gain: A revisit

Recent literature has turned to the brain gain effect, instead of the brain drain effect, that emigration may bring to a source country. This paper, however, suggests brain drain remains a likely outcome. Suppose that foreign language skill affects an individual productivity when working abroad. A brain drain may occur when the (exogenously or endogenously determined) probability of immigration is large. We also consider the case that the probability of immigration is determined by a signal, and provide a condition under which the individual will under-invest in education, which results in a brain drain for the source country.All correspondence to Donald Lien. The authors acknowledge three anonymous referees for helpful comments and suggestions. Responsible editor: Klaus F. Zimmermann     

Dynamics of immigration control

This paper examines the dynamic implications of border control policies and internal enforcement measures for the pattern of illegal immigration and the sectoral allocation of clandestine foreign workers. It is argued that efforts to control illegal immigration in sectors where they traditionally find employment may trigger the formation of networks supporting clandestine foreign workers in new locations and occupations where the probability of detection is relatively lower. The end result may be an increase in the overall stock of illegal immigrants residing in the economy. Received: 5 May 1997/Accepted: 4 December 1997     

Francis A. Walker on Restriction of Immigration into the United States

The desirable size and characteristics of current immigrant inflows into the United States, numerically larger than those experienced by any other country in history, are the subject of vigorous debate. This debate has striking antecedents, not only in its passionate intensity but also in the specifics of the arguments enlisted. Reprinted below in full is an especially articulate expression of anti-immigration sentiments and reasoning written by the eminent late-nineteenth-century economist and statistician Francis Amasa Walker. It appeared, under the title “Restriction of Immigration,” in the June 1896 issue of Atlantic Monthly (Volume 77, no. 464, pp. 822–829). In the 1880s, as Walker notes in this article, more than 5 million foreigners entered US ports. Immigration was accelerating. The 1890 census recorded a total US population of 62.2 million; 9.2 million of these were foreign born. More than 97 percent of this immigrant population came from Europe and Canada. But the composition of immigrants by country of origin, hence by ethnic background, was changing, with southern and eastern Europe taking an increasingly larger share of the total. Regulations on the admissibility of immigrants did bar entry to some persons with personal characteristics deemed undesirable. Walker notes “gross and scandalous neglect” in enforcing even these rules, but his concern is not with the numerically small effect their strict application would entail. He argues for restricting immigration at large—for “protecting the American rate of wages, the American standard of living, and the quality of American citizenship from degradation.” He recognizes that “the prevailing sentiment of our people [is] to tolerate, to welcome, and to encourage immigration, without qualification and without discrimination,” but seeks to refute the rationale underpinning those sentiments. To counter the notion that immigration represents “a net reinforcement of our population,” he sets out the thesis, perhaps most memorably associated with his name, that sees immigration as “a replacement of native by foreign elements”—because it is a cause of the diminishing fertility of the receiving population. He also rejects a second pro-immigration argument, that immigration is necessary “in order to supply the country with a laboring class…able and willing to perform the lowest kind of work,” which native-born Americans now refuse to perform. Such refusal, Walker argues, is the consequence rather than the cause of large-scale immigration. Walker's positive argument for restricting immigration emphasizes four factors. With the closing of the frontier, land is no longer free for new occupants; mechanization of agriculture now requires less labor for farm production; immigration creates a general labor problem, including unrest and unemployment, formerly unknown in America; and the character of new immigrants is inferior to that of the native population. Walker's main concern is with this last factor. In earlier times, “the average immigrant…was among the most enterprising, thrifty, alert, adventurous, and courageous of the community from which he came,” and immigration was “almost exclusively from western and northern Europe.” With cheap railroad fares and ocean transport, this is no longer so. The new immigrants, increasingly from southern and eastern Europe, “have none of the inherited instincts and tendencies which made it comparatively easy to deal with the immigration of the olden time….They have none of the ideas and aptitudes which fit men to take up readily and easily the problem of self-care and self-government.” Immigration, thus, is menacing to America's “peace and political safety.” Communities are formed “in which only foreign tongues are spoken, and into which can steal no influence from our free institutions and from popular discussion.” On immigration, Walker concludes, “we should take a rest, and give our social, political, and industrial system some chance to recuperate.” Walker's advice was not heeded until the 1920s. Immigration to the US in the first decade of the twentieth century amounted to nearly 9 million. In recent decades there has been a resurgence in numbers, and in the decade of the 1990s immigration exceeded 9 million. With that influx came a reinvigorated immigration debate. In the arguments for restriction, immigration from Asia and especially Latin America now substitutes for that from southern and eastern Europe. Francis A. Walker (1840–97) had a distinguished career as a Union officer in the Civil War, reaching the rank of brigadier-general, as a civil servant in the federal government, and, most notably, as an economist and educator. He was superintendent of the 1870 and 1880 US censuses and served as professor of political economy at Yale (1872–80), president of the American Statistical Association (1882–96), first president of the American Economic Association (1885–92), and president of the Massachusetts Institute of Technology (1881–96).     

A special section for correspondence and controversy

Summary The programs described above cost the state about $1 billion. Other state costs (which are not my responsibility) are incarceration costs for illegals, $400 million. Education cost for children of illegals has been estimated to be $1.7 billion this year. These two alone equal $2.1 billion.Please accept my assurances, and those of Governor Wilson, that we in the administration are not xenophobic or nativistic.I do not know if 8.6 million persons is a reasonable number for our nation of 250 million plus to accept and assimilate. I am convinced that 4.3 million is too many for a single state of 30 million to assimilate effectively. Certainly the costs of doing so are beyond our capacity to absorb without help.I am convinced that our existing assimilation ability is hamstrung by federal practice that ignores our immigration laws by permitting an unchecked flow of illegal immigrants into our country. Over half of this population enters and resides in California.The problem is exacerbated by the almost total failure of the federal government to support itslegal immigration decisions with federal funds to offset the costs of the resultant influx of immigrants.Presented at the Pacific Research Institute Conference on immigration, San Francisco, CA, April 25, 1994.     

The European Union Constitution on Border Checks,Asylum, and Immigration

The Treaty Establishing a Constitution for Europe was signed by the heads of government of the 25 European Union member states and three candidate states on 29 October 2004. The Treaty in effect is the proposed constitution, a long and elaborate document comprising 448 Articles (grouped into four Parts, with additional divisions into Titles, Chapters, and Sections, but numbered consecutively throughout) and 29 Protocols—annexes to the Treaty. Five articles and four protocols are concerned with issues of border control, immigration, and asylum policy. The articles are found in the chapter titled Area of Freedom, Security and Justice in Part III of the Treaty (The Policies and Functioning of the Union). These are reproduced below, along with one of the protocols (number 21). (Of the other protocols concerned with migration, one adds to the Treaty the provisions of the Schengen Acquis, the agreement among all EU members except the United Kingdom and Ireland, plus the non-EU states Norway and Iceland, to eliminate border controls at their common frontiers, and requires acceptance of the Acquis by any new member. Two other protocols set out reservations on the part of the UK and Ireland on border control and asylum matters—basically, an “opt-in” stance, allowing their participation in Treaty provisions on a case-by-case basis.) The constitution is highly detailed in scope but often vague in content, merely specifying topics on which policies will be developed or laws enacted. Thus the “common immigration policy” that is signaled in Article III-267 is yet to be shaped, and the Treaty offers few hints of what it may look like. A reluctance on the part of member states to cede sovereignty in the area of immigration is not limited to the British Isles. It is seen also in the retained right of all members to restrict non-EU labor migrants (Article III-267, Para. 5) and to conclude bilateral agreements on border crossing with non-EU states (Protocol 21). It is notable that the Treaty, while stressing that all nationals of member states are citizens of the Union with the right “to move and reside freely” within its territory, does not attempt to harmonize conditions or procedures under which migrants can acquire citizenship: indeed, it says nothing at all on the matter. (A “framework law,” mentioned at various points in the text, is a law that prescribes the result to be achieved but leaves to each member state “the choice of form and methods.”) Actual adoption of the constitution requires ratification by the governments of all EU members. If this demanding hurdle is passed (requiring parliamentary approval or, in some cases, a referendum), the constitution would come into force on 1 November 2006—or after the final ratification, if later. Under Article IV-443, if the treaty is ratified by four-fifths of members within the two years but is rejected by one or more states, “the matter shall be referred to the European Council”—the quarterly summit meeting of heads of government.     

Immigrants assimilate as communities, not just as individuals

The literature on the economic assimilation of immigrants generally treats them as atomistic individuals assimilating in a largely anonymous labour market. Here, we argue that immigrants assimilate as communities, not only as individuals. The longer the immigrant community has been established, the better adjusted it becomes, and the more the host society comes to accept that ethnic group. Using data from a 5% sample of the 1980, 1990 and 2000 US censuses, we find that the stronger is the tradition of immigration from a given source region, the better are the economic outcomes for subsequent immigrants from that source.     

Mass immigration and population dynamics in israel

Israel, in her 25 years of existence, received an unprecedented volume of immigration, which was the major source of her high population growth. This immigration was heavily concentrated in the first five years, 1948-1952; mass immigration of 711,000 supplemented an initial population of 630;000. Subsequently, since 1952, a very peculiar age-sex structure has developed: namely, instead of a pyramid, a wide rectangle for the younger age groups "topped" with a narrow pyramid for the older age groups. The peculiar age-sex dynamics is analyzed in relation to the volume of immigration with its uneven time distribution, the age selectivity of migrants and fertility-mortality patterns of migrants. It is concluded that the uneven time distribution of immigration and the higher fertility of migrants are jointly responsible for the development of Israel's peculiar age dynamics, and that the absence of either of these two factors alone would eliminate it. The peculiar dynamics has societal implications in the short and the long run, some of which are discussed.     

The migration challenge for PAYG

Immigration has been popularised in the economics literature as a tool that could be used to balance troubled PAYG pension systems. Pivotal research by Razin and Sadka shows that unskilled immigration can overcome the pension problem and, further, boost the general welfare in the host economy. However, a large strand of current economics research is engaged in identifying mechanisms through which unskilled immigration, while solving the pension problem, is causing undesired shifts in general welfare. This work shows that recurring unskilled immigration will not only reduce the general welfare but may also be challenging the pension system by reducing the pension benefits themselves. Further interpreting the actual data, it is suggested that immigration policies are designed either based on public finances only or in a political environment of gerontocracy.     

How responsive is U.S. population growth to immigration? A situational sensitivity analysis

There has been public concern about the effect of immigration on population growth in the U.S. But how responsive is population growth to immigration? This paper examines the sensitivity of intrinsic population growth to immigration and situates such sensitivity in fertility and survival changes. The application of second derivatives on a modified Leslie matrix facilitates the analysis of situational sensitivity of U.S. population growth to immigration. The results show that the sensitivity to immigration is not as influential as the sensitivity to fertility, and that the sensitivity to immigration further depends on changes in fertility and survival.     

Population studies ofCavelerius saccharivorus Okajima (Heteroptera: Lygaeidae): A few findings on population interchange

Summary The change in population density ofCavelerius saccharivorus was studied in the sugar cane field and theMiscanthus habitats around it. This species spent 2 (or partly 3) generations a year. It was suggested that the density rose in the sugar cane field where the density had been low enough, when the population density increased in the nearby sugar cane fields. Likely, the density in theMiscanthus habitat increased with the density in the nearby sugar cane field. It seems that these are mainly due to flying movement of adults, and that the movement takes place in every season. It was found through the investigation in the sugar cane field that the percentage of long-winged adults increased with the population density. These adults seemed to emmigrate to the nearby sugar cane fields andMiscanthus habitats. The remarkable increase in the percentage of long-winged adults in the sugar cane field was probably due to the immigration into there. In theMiscanthus habitat the adult population was consisted mainly of long-winged ones. Through all the observations, it was suggested that the adult movement was associated with the population regulation and performed chiefly by long-winged adults.     

Canada's population: growth and dualism

In Canada the current 1.3% population growth rate is causing some concern. Those concerned argue that such a rate of growth in combination with high levels of consumption could jeopardize the country's resource base and its comfortable style of living. Many Canadians are questioning high levels of immigration, for now that the fertility level is below replacement level, net immigration contributes substantially to population growth (over 1/3 in 1976). The growing proportion of non-Europeans among recent immigrants is causing resentment, and, in a tight job market, immigrants are regarded as threats to the World War 2 baby boom cohort who are now at working ages. The baby boom generation also puts stress on housing and health services, and it will increase the need for pension checks as it ages. Although French fertility is no longer high and immigration is no longer dominated by the British, the French group's 200-year struggle to preserve its identity continues on in the current effort of the Quebec government to enforce the use of French language by law within that province. Geography and climate dictate another demographic fact that divides the country and pervades its history. In addition to intense regionalism, uneven population distribution is responsible for 2 other concerns: the rapid growth of several already large cities and depopulation of many small communities. Focus in this discussion is on Canada's population growth in the past and as projected for the future, historical and current fertility, mortality and immigration trends, the search for a new immigration policy, the impact of the baby boom generation on the population's age structure and the problems this creates, and recent shifts in population distribution and in the country's ethnic and linguistic makeup. The population policy proposals evolved thus far involve to a great extent the use of immigration as a lever for achieving given population objectives.     

The Impact of Social Expenditure on Attitudes Towards Immigration in Europe

There is a growing body of literature dealing with the causes behind anti-immigrant sentiment and xenophobia. Based on the literature on the fiscal burden model, this paper contends that the differences in attitudes toward immigration, between low and high statuses, can be explained by the size of the welfare state. We argue that the impact of socio-economic status on attitudes toward immigration is larger in countries where social expenditure is high. Since a potential increase in the number of welfare recipients due to new immigrants might lead to a reduction in per capita transfers, low-income individuals in these countries are expected to be more concerned about the effect of immigration on social benefits. Using multilevel models and data from the European Social Survey we have found that while the effect of socio-economic status on attitudes toward immigration is positive there is a great deal of variation between countries. The difference in attitudes between high and low socio-economic statuses increases as social expenditure increases. Moreover, increases of social expenditure in the short run increases anti-immigrant sentiment as it raises concerns about the impact of immigration on welfare services.     

Immigration and product diversity

We study the effects of immigration on the diversity of consumption choices. Data from California in the 1990s indicate that immigration is associated with fewer stand-alone retail stores and a greater number of large and in particular big-box retailers—evidence that likely contradicts a diversity-enhancing effect of immigration. In contrast, focusing on the restaurant sector for which we can better identify the types of products consumed by customers, we find that immigration is associated with increased ethnic diversity of restaurants. This latter effect appears to come in part from the comparative advantage of immigrants in the production of ethnic goods.     

Immigration data and national population estimates for the United States

The immigration component in national population estimates is comparatively small, but it is not insignificant and may indeed be an important source of error. Therefore, it warrants the considera-tion of those concerned with population estimates. The paper considers alternative methods for deriving estimates of immigration from the raw data and presents estimates of net immigration from 1950 to 1965. They are developed from estimates previously published by the Bureau of the Census, but they differ at some points where new data have become available or where a review of the data has led to a change in judgment on how best to use them. The paper also presents suggestions on how immigration statistics might be altered for purposes of improving the estimates.Census data may be used to estimate net immigration by three different methods, but upon analysis each method proves to be inadequate. Hence, data based on visas surrendered at the port of entry must be the principal source of immigration estimates. These data have their limitations because (1) they do not cover net arrivals of citizens from abroad and from Puerto Rico, (2) they do not report departures of aliens, and (3) they do not allocate all immigrants to year of entry. Alien registration and passenger data offer possible alternative estimates.The paper attempts to measure unrecorded immigration, discusses how net arrivals of citizens from abroad and from Puerto Rico may be estimated, and how the age, sex, and race of immigrants may be treated.     

Immigration,assimilation and growth

This paper analyzes the welfare effects of immigration and its subsequent effect on ethnic diversity in a model featuring human capital spillovers which depend on the degree of ethnic heterogeneity, variation rates of time preference across individuals and endogenous levels of immigration and assimilation. In the model, an increase in ethnic diversity reduces the spillovers effect for the majority. Nonetheless, immigration can be welfare improving for the majority ethnic group even if it increases the degree of diversity as long as it raises the average human capital level and/or growth rate by increasing the proportion of people with low rates of time preference. However, if an economy is too homogenous, it will not be able to attract immigrants. Finally, if the level of immigration is not too high, then immigration also raises the net benefits to assimilation which leads to a more homogenous economy. Received: 18 February 1997 / Accepted: 16 July 1997     

An Italian Statement on International Migration

Increasing realization of the implications of persisting below‐replacement fertility in Europe—shrinking absolute numbers combined with a rising proportion of the elderly—is giving new salience to policy considerations regarding immigration in the countries most affected by low fertility. The recent United Nations report on “replacement migration” (see the Documents section in the June 2000 PDR) highlighted the issue through illustrative calculations showing the size of immigrant streams that would be needed for achieving specified demographic targets in selected lowfertility countries, given continuation of present fertility and mortality trends. For example, the UN report suggested that in Italy—which has one of the lowest fertility rates in the world—maintaining a constant population over time would require a net influx of some 12.6 million immigrants during the next 50 years, and maintaining a constant labor forceage population (ages 15–64) would require a net inflow of 18.6 million. Yet immigration policy in Western Europe has become increasingly restrictive during the last quartercentury, and the official policy stance that regulating immigration is strictly within the domain of a country's sovereign right has been assiduously maintained. (International treaty obligations qualify that right in the case of bona fide asylum seekers; however, the definition of that category is also subject to the discretion of the receiving countries.) Thus, although within the European Union national borders are open to EU citizens, the power of regulating immigration from outside the EU is retained by the individual countries rather than subject to EU‐wide decisions. Suggestions coming from the developing countries to follow up the 1994 International Conference on Population and Development with an intergovernmental conference on international migration and development were set aside by the potential immigrant‐receiving countries as overly contentious. A statement by the Minister of Foreign Affairs of Italy, Lamberto Dini, delivered at the 55th General Assembly of the United Nations, 13 September 2000, may be a sign of a notable shift in official approaches to immigration policy by at least one EU member state. The statement, in a departure from the practice of touching lightly upon a wide range of issues in international affairs, typical in high‐level ministerial speeches given at that UN forum, is devoted essentially to a single topic: international migration. It characterizes migration “between or within continents” as an international problem and advocates “coordinated and integrated” instruments in seeking a solution. It suggests that “today, with a declining birth rate and an aging population, Europe needs a strategy that embraces the complex process of integrating people from different regions of the world.” The rules for international migration, the statement claims, should be set in a global framework, such as provided by the United Nations. In the “age of globalization,”“a solidarity pact is needed to find the best and most effective way of balancing the supply and demand of labor.” With the omission of opening and closing ceremonial passages and a brief comment on the problem of debt relief, the statement is reproduced below.