Chapter 11: Lessons for US Immigration Policy
In Chapter 1 we stressed that immigrants’ pro-trade influences are welfareenhancing. The benefits of immigration include increased domestic output that results when immigrants fill labor market vacancies, increased overall employment as immigrants are more likely to start businesses, and enhanced competitiveness of domestic firms that results from the immigration of highly-skilled individuals. Aside from labor market-related benefits, immigrants add cultural diversity and, through connections to their home countries, act as an arm of US foreign policy. While viewed in a positive light by many, added cultural diversity is seen by some as a cost of immigration. Similarly, while immigrants offer benefits to the labor market they may also generate adverse earnings and employment effects for competing domestic workers. Other criticisms include the argument that immigrants constitute a net tax burden to the native-born and may even represent a national security threat; however, as mentioned earlier, the review of opinion poll data conducted by Scheve and Slaughter (2001) found that worries over the labor market effects of immigrants were the primary concern underlying opposition to immigration. Focusing on the related labor market consequences of immigration, the winners include the owners of factors of production other than domestic labor that is in competition with immigrant labor. These individuals gain to the extent that the arrival of immigrants makes other factors more productive. Also, if immigrants are unskilled or semi-skilled, the middle and upper classes of the host country gain if they consume the services of unskilled labor. The list of those who...
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