Economic Underdevelopment and the Population Explosion: Implications for U.S. Immigration Policy

Abstract

US immigration policy should focus on the problem of economic underdevelopment rather than exclusively considering the movement of people. This discussion compares the costs and benefits of labor and capital mobility concluding that Americas interests are better served by the latter. US immigration policy needs to foster the mobility of capital while restricting the mobility of labor. Capital investment in those countries sending large numbers of immigrants to this nations borders may be greatly accelerated by reducing the opportunity cost of such investment. At the same time more restrictions need to be placed on immigration. Human population is currently growing more rapidly than at any previous time in world history. The population of the world will increase by nearly 3 billion in the last quarter of this century the growth being largely confined to the less developed regions of the world. Demographic growth results from and contributes to economic underdevelopment. Population will continue to grow in the underdeveloped areas of the world until it is checked by economic development coerced fertility limitations war or Malthusian consequences. The US is now receiving more immigrants than ever before in its history. These new immigrants are arriving primarily from Latin America Asia and the Caribbean. Demographic increase is behind this immigration. If labor is mobile it will migrate from areas of relative surplus to areas of relative shortage i.e. it will move from areas which are economically underdeveloped to areas which are economically developed in the process of seeking higher wages. The US will increasingly be the recipient of the worlds growing poor population unless it effectively restricts the mobility of labor. The number of immigrants the US is absorbing already exceeds the optimum number of the countrys economic prosperity. The economic and social effects of capital and labor mobility are asymmetrical. From the perspective of both developed and developing countries capital mobility is preferred to labor mobility (although developing countries would prefer the mobility of both factors). Private foreign investment may produce dramatic economic benefits for both donor and recipient countries. The same is not the case for labor migration. The US should foster capital mobility while restricting labor mobility as a comprehensive immigration policy. The greatest hope for accelerating the flow of capital to developing countries is through the creation of new international divisions of labor supplying appropriate services to labor intensive businesses which could benefit from low cost labor. By pursuing a highly restrictive immigration policy while promoting overseas private investment the US government acts in the national interest and remains responsive to the core problem of economic underdevelopment.