Chapter 22: Immigration

ImmigrationMcGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.Number of ImmigrantsEconomic immigrantsLegal immigrantsAveraging 1 million per yearQuotas, refugees, and H1-B provisionOne-third of population growthOne-half of labor force growthLO122-*Number of ImmigrantsLO122-*Number of ImmigrantsIllegal immigrantsEstimated from Census data350,000 per year on averageHigh proportion from Mexico and Central AmericaTotal of 11 million residing in the U.S. in 2009; 62% from MexicoLO122-*Number of ImmigrantsTotal1,130,8181. Mexico164,9202. China64,2383. Philippines60,0294. India57,3045. Dominican Republic49,4146. Cuba38,9547. Vietnam29,2348. Colombia27,8499. South Korea25,85910. Haiti24,280LO122-*Decision to MigrateLO2 Take advantage of superior economic opportunities Escape political or religious persecution Reunite with family members Earnings opportunities Increase value of human capital Moving costs Distance Follow beaten path Age Other factors22-*Decision to MigrateEarnings opportunitiesIncrease value of human capitalMoving costsDistanceFollow beaten path Age Other factorsLO222-*Economic EffectsPersonal gainsEconomic benefits exceed costsOther issuesUncertainty and imperfect informationBackflowsSkill transferabilitySelf-selectionLO322-*Impacts on Wages, Efficiency, OutputUnderstand economic outcomesAssumptionsU.S. and MexicoLabor demand greater in U.S.No long-term unemploymentLabor quality the sameMigration is legal and has no costWage differentials key factorLO422-*Impacts on Wages, Efficiency, OutputWage RateUnited StatesMexicoQuantity of Labor(Millions)Quantity of Labor(Millions)DuDmaAbdDBWeWage RateWecfFCWu00WmImmigration impacts wages, employment, and outputgGLO422-*Impacts on Wages, Efficiency, OutputWage rates will equalizeIn the U.S.Wage rate fallsEmployment and output riseIn MexicoWage rate risesEmployment and output fallLO422-*Impacts on Wages, Efficiency, OutputOverall effectsWorld output risesEfficiency gainsOther effectsBrain drainsU.S. natives lose wage incomeU.S. businesses gain incomeLO422-*Fiscal ImpactsFiscal burden > taxes paidWages will not equalizeResearch findings are mixedLO422-*Illegal ImmigrationEmployment effectsTwo extreme viewsFixed number of jobs in economyImmigrant employment decreases domestic employment 1-for-1Immigrant work undesirableNo domestic workers displacedLO522-*