George J. Borjas: Immigration economics

Abstract

In the introduction to Immigration Economics, George Borjas identifies two themes for his book. One, that immigration has economically significant costs and benefits; two, that neither theory nor empirics have proven to be very robust to changes in assumptions and methods. He states the book’s premise as: ‘‘What does economics have to say about immigration, and what do we have to assume to get it to say what we think it says’’ (p. 4)? While he does effectively summarize much of a particular subset of both the theoretical and empirical economics literature on immigration, the book is woefully limited in the scope of questions it even considers, steering well clear of political economy issues in order to focus on labor market effects. Unfortunately, the book fails to do more than present a subset of the literature. Borjas makes no claims about the balance of the evidence other than to say more research in the field is needed. Each chapter tackles a major element of the labor economics of immigration. After an introduction defining the book’s scope, Chapter 1 deals with the selection of immigrants. Who immigrates and why? Borjas relies on the classic Roy (1951) model of immigrant selection and subsequent extensions. After explaining the model in depth, he attempts to reconcile some empirical literature with the model and make the case that the typical worker who emigrates from a country differs dramatically from the type of worker moving in. Chapter 2, a particularly strong chapter, covers much of the work on immigrant assimilation into the work force. The papers that Borjas chose to discuss all point toward a very high degree of assimilation for foreign born workers in the U.S. He closes the chapter by warning that U.S. census microdata have some drawbacks and therefore we should show caution when interpreting these findings. Chapter 3 is a full theory chapter concerning the effect of immigration on wages. It explains many important concepts, chiefly that immigrant and native labor are not perfect