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Jul 6 / Jonathan

The Debate over Immigration

Mark Thoma, The Debate over Immigration:

From a policymaker’s perspective, what should U.S. policy address, the welfare of poor anywhere in the world which may represent the preferences of constituents, or should U.S. economic policy attempt only to maximize the welfare of U.S. citizens?

Scroll down to the extensive excerpt from Roger Lowenstein’s otherwise paywalled NY Times article.

This would be a good time to finally link to an earlier post of Thoma’s on this subject, Martin Wolf: Unskilled Immigration.

Martin Wolf has a pretty good summary of the economic and equity issues involved with the immigration of unskilled workers. A thought that strikes me is that this debate is partly about how one values costs and benefits to non U.S. citizens. Suppose you can make people better off with a particular policy, but a subset will be worse off worse off, but the subset does not contain any U.S. citizens. It is a Pareto improvement to enact the policy?

Some people will value the costs and benefits to non U.S. citizens highly – those that care deeply about the positive impact of immigration on the lives of the immigrants fall into this category. Some will place very little weight on those outside the country – policymakers such as the Fed do not recognize costs and benefits except as they relate to the U.S. economy and the welfare of its citizens. The Fed has made it clear it is not its job to worry about the unemployment rate in Mexico in the conduct of policy unless it somehow affects the U.S. In making welfare assessments, how those costs and benefits are evaluated can have a big affect on the recommended course of action. And I don’t think there’s a right answer as to what someone should consider in making such evaluations. A person isn’t more or less liberal or progrssive (or conservative) for considering their family or community first and placing domestic low skill wage earners at the forefront, or for caring deeply about immigrants.

If I thought politicians would actually follow through on the proposal, my own view is that those who benefit most from both legal and illegal immigration, those at the higher end of the income scale, would have part of those benefits taxed away to compensate those who are hurt by the policy, low-skilled wage earners in particular. In such a case, a liberal immigration policy would be my preference.

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