Immigration Policy

InternationalEconomics

Immigration Policy

By long established custom whoever speaks of immigration must refer to it as a “problem.” It was a problem to the first English pioneers in the New World scattered up and down the Atlantic coast. Whenever a vessel anchored in the James River and a few score weary and emaciated gentlemen, worn out by three months upon the Atlantic, stumbled up the bank, the veterans who had survived nature’s rigorous “seasoning” looked at one another in despair and asked: “Who is to feed them? Who is to teach them to fight Indians, or grow tobacco, or clear the marshy lands and build a home in the malaria-infested swamps? These immigrants certainly are a problem.”

(Marcus Lee Hansen, 1938)

Chapter 16


The Goals of This Chapter

• Summarize the various push, pull, stay, and stay-away factors that determine immigration, and introduce the role of immigration policy.

• Use the history of U.S. policies toward immigrants as a case study of immigration policy.

• Describe immigration policy in other countries and compare it to that of the U.S.

• Analyze illegal immigration, its likely causes, and its consequences.

• Introduce students to the bureaucratic world of immigration regulation by examining how people go about getting immigrant visas in the U.S. and other countries.


Push, Pull, Stay, and Stay Away Factors

The incentives that influence immigration fall into four categories:

1. Negative incentives that push people to leave a country;

2. Positive incentives that pull people to immigrate to another country;

3. Positive incentives that cause people to stay at home;

4. Negative incentives that cause people to stay away from a foreign country.


Figure 16.1: The Immigration Decision

Costs of Moving

Source Country Destination Country

Formal Exit Barriers Formal Entry Barriers

Exit Visa Entry Visa Exit Tax Quota Prohibition Prohibition Imprisonment ImprisonmentPenalties on Family Fines

“Push” Factors

faminepovertylow wagesunemploymentcrowdinghigh taxesdiscriminationreligious persecutioncivil warviolence and crimeforced military servicesocial immobility

“Stay” factors

family tiesfriendshipssocial statuscultural familiarityemploymentpropertyfamiliaritycertaintypolitical privileges

“Pull” factors

higher wagesemploymentproperty rightspersonal freedomeconomic freedomcivil rightslaw and orderpeacereligious freedomeducational opportunitysocial mobilitylower taxes

“Stay away” factors

language barrierscultural barriersdiscriminationlow social statusunemploymentlow wageslack of political rightsunfamiliarityuncertaintywarcrime

transport costsdangers of the voyagetime of travellost income during move

Immigrants


“Push” Factors

Famine Discrimination

Poverty High taxes

Low wages Religious persecution

Unemployment Civil war

Crowding Forced military service

violence and crime Social immobility


“Stay” factors

Family ties Property

Friendships Employment

Social status Familiarity

Cultural familiarity Certainty

Political privileges


“Pull” factors

Higher wages Law and order

Employment Peace

Property rights Religious freedom

Personal freedom Educational opportunity

Economic freedom Social mobility

Civil rights Lower taxes


“Stay away” factors

Language barriers Low wages

Cultural barriers Lack of political rights

Discrimination Uncertainty

Low social status War

Unemployment Crime

Unfamiliarity


Figure 16.2Immigrant Departures as a Percent of Arrivals

Source: Susan B. Carter and Richard Sutch (1997), “Historical Perspective on the Economic Consequences of Immigration into theUnited States,” NBER Working Paper H0106, December, Table 11.


A nation’s immigration policy consists of the laws, regulations, and bureaucratic procedures that address the following questions:

1. Is immigration to be restricted?2. If immigration is to be restricted, how many immigrants

will be allowed to enter the country?3. If the number of foreigners seeking to immigrate exceeds

the number of immigrants to be allowed into the country, what criteria will be used to ration the scarce entry permits?

4. How many resources will be devoted to enforcing the immigration restrictions?

5. What methods will be used to enforce immigration restrictions?

6. How are immigrants to be treated compared to citizens of the country?


U.S. Immigration Policy

The Six Questions: 1776-1875

1. Restrict: No restriction

2. How much: n.a.

3. Selection Criteria: n.a.

4. Control Effort: n.a.

5. Control Methods: n.a.

6. Foreigners’ Rights: Same as nationals



The Six Questions: 1900

1. Restrict: Restrict Chinese, criminals, and people in poor health

2. How much: No restrictions on others3. Selection Criteria: Racial criteria, interview

and inspection at entry4. Control Effort: Few resources applied5. Control Methods: Border inspections, permanent

agency to enforce immigration laws

6. Foreigners’ Rights: Reduced rights until citizenship was acquired




1. Restrictions: Country-by-country quotas 2. How much: Overall limit of 150,0003. Selection Criteria: Country quotas not to exceed 2%

of total number of that national origin already in U.S.

4. Control Effort: Stricter control of borders5. Control Methods: Ellis Island, Angel Island, other

border controls6. Foreigners’ Rights: Reduced rights until citizenship

was acquired




1. Restrictions: Restrict but increase the total number of immigrant visas

2. How much: Total visas issued approached 1 million per year by 2000

3. Selection Criteria: Variety of criteria, including family reunification, special skills,

lottery, refugees, and investment.

4. Control Effort: Greatly increased expenditures for border control, monitoring of

aliens, and processing of visas.5. Control Methods: Border checks, required

documentation, employer checks6. Foreigners’ Rights: Limited rights until citizenship


Illegal Immigration

• Illegal Immigration is immigration that involves disregarding a country’s immigration laws, regulations, and procedures.

• Illegal immigration a result of the clash between policies and economic incentives.

• U.S. census data for 2000 suggests there may be close to 9 million illegal immigrants in the U.S.

• There may be about 5 million illegal immigrants living in Western European countries.

• Illegal immigration does not only occur in developed economies; it occurs between all countries where there are substantial differences in economic opportunities.


Illegal Immigration

• An interesting question is why authorities in destination countries often accept illegal immigration despite formal laws that call for strict punishment of illegal immigrants.

• Some economists have suggested that illegal immigration constitutes a form of market segmentation that lets employers capture the gains from increased labor while minimizing the negative consequences on native labor.

• Illegal immigrants are often concentrated in labor intensive industries that offer working conditions that native workers shun and wages far below what native workers earn in other sectors of the economy.

• Thus, illegal immigrants end up in certain low-paying segments of the labor market where they do not compete directly with native workers.


Illegal Immigration

• Illegal immigration equal to the difference ab gives employers surplus gains of area G in the part of the illegal labor market where the wage is w2.

• Native workers continue to earn income equal to areas E+F in the rest of the economy where the wage is w1.

• The economy thus gains G while native workers are unaffected.

S1 S2

VMPL

Wage

w2

w1

D

H

Figure 16.9A Labor Market Segmented between

Native Workers and Illegal Immigrants

F

E

H

G


Illegal Immigration

• The demand-side effects of immigration may even cause illegal immigration to raise the welfare of native workers.

• If the labor demand curve shifts out, then native workers’ wage rises to w3 and employers and other factors earn the areas D and a larger G.

• Native labor income increases by the area J.

• These conclusions are very dependent on rigid market segmentation.

S1 S2

VMPL

Wage

w2

w1

D

H

Figure 16.10A Segmented Labor Market withDemand-Side Effects from Illegal

Immigratiojn

F

E

H

G

w3

VMPL

JG


Studies of public opinion on immigration suggest that:

• Low-skilled workers were more likely to support curbs on immigration than high-skilled workers.

• Opposition to immigration among low-skilled workers was weaker in high-immigrant regions of the U.S.

• The authors of the studyattribute the weak opposition to immigration in the U.S. in the late twentieth century to the fact that most immigrants settled in states where there were already a lot of immigrants and the native population was increasingly high-skilled.

• That is, those likely to suffer most from the downward wage pressure from immigration are other immigrants, who are less inclined to demand curbs on immigration.


Key U.S. Legislation on Immigration

• The Chinese Exclusion Act of 1882 - The first legislation explicitly limiting immigration, this law was blatantly racist since it specifically banned only Chinese immigrants.

• In 1891 legislation was passed creating the Office of Immigration, an agency that is today known as the Immigration and Naturalization Service (INS).

• An immigrant processing center was established on Ellis Island in New York harbor in 1892 to enforce new health and moral criteria established by law.

• In 1913 Congress reacted to the alleged “deteriorating quality” of immigrants and passed a law requiring that all immigrants be literate, which President Wilson vetoed.

• A literacy law was again passed in 1917, and Wilson’s veto was overridden.


Key U.S. Legislation on Immigration• The 1921 Emergency Quota Act set strict limits on

immigration for the first time.• It was followed by the Japanese Exclusion Act of 1924,

which placed an outright ban on immigration from Japan.• The Immigration Act of 1924 limited immigration from

any particular country to 2 percent of the number of descendants of immigrants of that nationality residing in the United States back in 1890.

• Supporters of this latter law felt that by going back to the 1890 census the “traditional” ethnic makeup of the United States would be preserved.

• In 1929, immigration law was amended to set an overall limit of 150,000 immigrants per year, divided among nationalities according to the ethnic makeup of the U.S. population as given by the 1920 census.



• In 1965, when civil rights were a popular political issue, Congress passed the Immigration and Nationality Act Amendments of 1965.

• This Act abolished the national quota system in favor of a new set of criteria for the granting of permanent resident visas.

• The 1965 Act prescribed that 80 percent of the numerical limits were to be allocated to relatives of persons already living in the United States.

• The remaining were to be allocated to those with desirable skills and their family members.

• Spouses and children of U.S. citizens were no longer subject to numerical limits at all.



• By the 1980s, illegal immigration in the U.S. was growing rapidly, which led to the Immigration Reform and Control Act of 1986 (IRCA).

• This Act strengthened the Border Patrol and, for the first time, established penalties on employers who knowingly employ illegal aliens.

• Employers were required to check the identification of their employees to verify their legal status in the United States.

• IRCA also provided for a one-time amnesty for illegal immigrants by giving about 2.7 million illegal aliens living in the United States legal residence status.



• Illegal immigration continued to grow despite the new measures.

• Increased border patrols have had little effect on the number of people entering the U.S. illegally.

• The requirement that employers verify citizenship may have done little more than induce a new industry producing all varieties of forged documents.

• Even though the amnesty was advertised as a one-time event, prospective immigrants could also have interpreted it as a signal that the status of illegal immigrants may again be legalized in the future.



• The Immigration Act of 1990 addressed the concerns about the decline in the skill levels of U.S. immigrants by reducing residence visas for unskilled labor and increasing visas for “priority workers.”

• The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 set up a telephone clearing house for employers to verify the immigrant status of employees and expanded the Border Patrol.

• the Personal Responsibility and Work Opportunity Reconciliation Act barred non-citizens from some types public assistance.

• In 2000 Congress authorized an increase in H-1B visas, which are temporary work visas for foreigners with talents and skills that are in short supply in the U.S.


Web Sites of Immigration Authorities

Most immigrant destination countries now have web sites with information on the rules and regulations pertaining to immigration.

The Canadian and U.S. sites are:

• www.cic.gc.ca

• www.ins.gov

The Canadian site is especially interesting because the country actively recruits immigrants.

Documents

Immigration Policy