THE ECONOMICS OF U.S. IMMIGRATION POLICY

Abstract

The economic gains from immigration are much like those from international trade: The economy benefits overall from immigration, but there are distributional effects that create both winners and losers. Immigration is different from trade, however, in that the physical presence of the people who provide the goods and services that drive the economic gains also raises other issues, such as whether immigrants are a fiscal drain. It may be no surprise then that Americans’ views on immigration are mixed. Polls show that the majority of Americans think immigration is “a good thing” for the United States (Gallup, 2011). Nonetheless, most Americans want immigration to decrease or remain at its present level; less than 20 percent of Americans support an increase in immigration (Gallup, 2011). We discuss below potential reasons why Americans are concerned about immigration. Many of the concerns stem from the belief that immigration has adverse labor market and fiscal impacts, although the economic evidence on these issues is mixed. Public concerns about immigration, particularly unauthorized immigration, have led to a number of state-level immigration laws but little action at the federal level in recent years. As we argue below, the federal government’s failure to enact a major change in immigration policy since the Immigration Act of 1990 has resulted in an increasingly strained, inefficient immigration system in dire need of overhaul. One clarification on terminology: We use the terms “immigrant” and “foreign-born” interchangeably throughout this article.