Bryan Caplan on Immigration

by Reihan Salam

Bryan Caplan has published a characteristically provocative and insightful essay on the case for restricting immigration. Caplan argues that there should be a strong moral presumption in favor of free migration, and he offers a framework through which to understand arguments against:

[A]ssuming the worst about immigration, are immigration restrictions the only viable remedy? If cheaper, more humane alternatives exist, then immigration restrictions remain unjustified even if my summary of the social science is hopelessly biased.

My views on immigration are quite different from Caplan’s, yet I found his discussion clarifying and I actually think it helps sharpen the case for moderate restrictionism.

Immigration makes low-skilled natives worse off, especially if they rent. But most Americans gain. Even if you reject these conclusions, though, immigration restrictions remain unjustified. You do not have to restrict migration to protect native workers from the consequences of immigration. There is a cheaper and more humane alternative: Charge immigrants surtaxes and/or admission fees, then use the extra revenue to compensate low-skilled Americans. For example, you could issue green cards to Haitians who agree to perpetually pay a 50 percent surtax on top of their ordinary U.S. tax liability. Haitians used to earning a dollar a day would jump at the opportunity, and the extra revenue could fund, say, tax cuts for low-income natives. Critics can tailor the details to fit the magnitude of the harm they believe immigrants inflict on native workers. Whatever the magnitude of this harm might be, extracting compensation is cheaper and more humane than forcing foreigners to languish in the Third World.

There is another way of looking at the challenges facing less-skilled natives, however. This is not a homogeneous group. A disproportionately large share of less-skilled natives have foreign-born parents, and live in neighborhoods that are culturally and economically isolated from the American mainstream. Heather Mac Donald’s article on “California’s Demographic Revolution” (not yet online, unfortunately) in the new issue of City Journal offers a detailed and sobering look at the challenges facing this population.

Many, including Caplan, might object to the premise that cultural and economic isolation is necessarily a problem. If migrants achieve upward absolute mobility in intragenerational terms, perhaps it is foolish to worry about the creation of a large population of less-skilled natives who lag far behind other natives in terms of economic outcomes, political inclusion, etc. This view is premised on the related view that things like Gini coefficients shouldn’t concern us, and that extreme inequality doesn’t engender political economy challenges, e.g., it doesn’t create pressure for populist measures that tend to undermine wealth creation, etc. 

It is possible that cash transfers are the most appropriate vehicle for addressing problems that stem from cultural and economic isolation and family breakdown, but my sense is that integration into the broader society will prove the more fruitful strategy. This might be somewhat easier to achieve if the flow of new less-skilled migrants from the same source communities is reduced. The Mexican influx has already slowed considerably, an artifact of the business cycle, Mexico’s rapidly aging population, and Mexico’s growing affluence; we won’t know for some time if this facilitates integration, as the culturally distinctive enclaves Mac Donald describes may well have achieved a sustainable scale. Integration might be better served by the availability of opportunities in the mainstream (i.e., above-ground) labor force. Insofar as less-skilled natives are competing with culturally similar less-skilled migrants, a shift towards more skilled migrants could prove beneficial by increasing the number of complementary workers and decreasing the number of competing workers. 

Note that this entire line of thinking has less to do with the size of the immigrant influx than with how readily immigrants can be integrated in cultural and economic terms. This needn’t imply assimilation as such. Immigrants can retain native language fluency and various cultural practices while being active participants in the economic and political life of the wider community. But it helps to have a high skill level.

Caplan also suggests that arguments from the “net fiscal burden” of less-skilled migrants can be addressed by barring them from receiving various social transfers. Rigorously pursuing this agenda would, I suspect, prove politically problematic, particularly if some portion of the electorate is sensitive to the deteriorating labor market prospects and household income levels of less-skilled migrants. 

I was surprised by Caplan’s argument that real estate values are a helpful measure of social capital in a given region, as there are presumably many confounding variables. Would real estate values in high-productivity regions be markedly lower if, say, the share of skilled migrants was much bigger while the share of less-skilled migrants was much smaller? It’s hard to say, as less-skilled workers are complements for skilled workers (as they facilitate the outsourcing of household production, which contributes to increased work hours, etc.). But the answer isn’t obvious to me, particularly as we can imagine firms that focus on outsourced household production could respond to tight labor markets by becoming more capital-intensive.

Caplan suggests that a larger foreign-born share of the population might undermine support for the welfare state:

As individuals, immigrants probably do favor a larger welfare state than natives. But collectively, immigrants’very presence undermines the welfare state by reducing native support. Social democrats may find this tension between diversity and solidarity disturbing. But libertarians should rejoice: increasing foreigners’ freedom of movement may indirectly increase natives’ freedom to decide who deserves their charity.

To the best of my knowledge, no researcher has specifically tested whether AGS’s results extend to immigration. But we should expect them to. Immigrants are the ultimate out-group. Even today, Americans publicly complain about “immigrants” in language they would never use for blacks or gays. If the knowledge that foreigners attend “our” public schools and seek treatment in “our” hospitals does not undermine support for government spending on education and health care, nothing will.

I suspect that immigrants are not in fact “the ultimate out-group,” and that much depends on whether existing domestic constituencies identify with particular immigrant groups or not. This is part of why I’ve been critical of the mainstream comprehensive immigration reform debate. If we’re going to accept a large but finite number of less-skilled immigrants, it seems far more coherent to select them on humanitarian grounds, e.g., from highly-indebted poor countries with poor growth prospects, rather than on grounds of geographical proximity. Yet the Mexico-centricity of the immigration reform agenda flows naturally from the demographic composition of the electorate, i.e., Americans of Mexican origin are an important political constituency.

There’s much more to say. Caplan’s article is well worth your time. I’ll conclude by noting that my views are more in line with those of Jason Richwine.