The Corner


A Few Observations on the Impact of Low-Skill Immigration

Migrant workers from Mexico and Honduras rake wild blueberries from a field in Deblois, ME., August 6, 2013. (Dave Sherwood/Reuters)

Low-skill immigration can benefit natives. However, I find it useful to pay attention to the magnitude of the benefits in question, and whether or not low-skill immigration is the only possible way to yield said benefits. Briefly, I want to touch on two illustrative examples.

Consider the claim that the availability of low-skill immigrant labor allows high-skill native women to greatly increase their work hours by freeing them from household tasks that that might otherwise occupy their time. This claim makes intuitive sense, and there is some evidence for it. For example, while the economists Patricia Cortés and José Tessada have found that low-skill immigration from 1980 to 2000 had no appreciable impact on the work hours of most American women, it did increase them by 20 minutes in the top quartile of the wage distribution, and it raised the likelihood that high-skill native women would work more than 50 hours a week by 1.8 percentage points, and more than 60 hours a week by 0.7 percentage points. Cortés and Tessada attribute this in part to the fact that low-skill immigration allowed these professional women to devote less time to household chores. How much less time? About seven minutes a week.

Of course, low-skill immigration is not the only way to reduce the burden of household labor on high-skill native women. Most obviously, we could encourage high-skill native men to take on more of this work, though presumably that would decrease their work hours somewhat. What are our other options? If our goal is to encourage affluent families to outsource household production, we could also reduce the minimum wage. This is a policy I’d oppose, but if my chief policy goal were to help rich people outsource time-intensive chores, it would be an obvious starting point. Alternatively, we could allow entrepreneurs and innovators to devise other strategies for meeting the needs of affluent dual-earner families. In time, I suspect automation, breakthroughs in material science, business-model innovation in the meal-kit sector, and, perhaps, self-driving vehicles will save families of the future far more than seven minutes a week — and not just rich families.

Or take the argument that an influx of low-skill immigrants can increase educational attainment among natives. Again, the basic idea makes a lot of sense. If I’m weighing whether or not to stay in school, the arrival of large numbers of low-skill immigrants might nudge me towards sticking around, as I might sense that competition for low-skill jobs might intensify. Drawing on data from the National Education Longitudinal Study (NELS), the economist Peter McHenry finds that increased local immigration is associated with, among other things, an increase in high-school graduation rates among natives. More specifically, an increase in immigration flow by one standard deviation causes the high-school graduation rate among natives to increase by about 2 percentage points. According to McHenry, “[t]his is a large effect. The high school graduation rate is an important social metric that has been stubbornly low in the United States.”

Boosting the high-school graduation rate by 2 percentage points would indeed be a very good thing. But it is worth considering whether there are alternative policies that can achieve an increase of similar magnitude. Raising the compulsory-schooling age from 16 to 18, for example, appears to increase high-school graduation rates by 2.4 percentage points. More tentatively, the researchers Pamela McKeever and Linda Clark have found that delaying school start times to 8:30 a.m. increased attendance rates and graduation rates in a small sample of high schools. According to a Reuters report, “the average graduation completion rate was 79 percent before the delayed start was implemented, and it was 88 percent afterward.” Needless to say, it is hard to imagine that delayed start times would boost graduation rates quite so dramatically if implemented at scale, but it is certainly a policy worth considering.

Let’s stipulate that the threat of labor-market competition does indeed spur people to acquire new skills, as McHenry’s findings suggest. One implication that if people feared labor-market competition less, say because they could always sign up for a guaranteed job, or they’ve been guaranteed a minimum income, or the labor market has for some other reason become very tight, educational attainment might fall? There is evidence that the growth of export manufacturing in Mexico actually led to an increase in school dropouts. Simply put, new employment opportunities for young low-skill Mexicans raised the opportunity cost of staying in school. The U.S. housing boom appears to have had a similar effect: by creating new employment opportunities for low-skill workers, it substantially lowered college enrollment and attainment, particularly for young people who might have otherwise gone to community college. Nevertheless, policymakers generally want higher wages for workers with modest skills, not lower wages, even if lower wages might nudge them towards a degree (or at least a few months of aimlessly taking classes, and taking out student loans).

Then there is the role of the welfare state. Rasmus Landersø and James Heckman have found that while the generosity of the Danish welfare state helps disadvantaged kids, it means that said kids have weak incentives to actually stay in school, and to climb the economic ladder as adults. I don’t personally see this as a slam-dunk case against the Danish model. There is a lot to be said for a society in which people who don’t finish school can still expect to lead decent lives. But when I see egalitarian liberals celebrate the fact that intensifying the wage competition facing low-skill workers might spur them to stay in school, I sometimes wonder if they’ve fully thought through the implications for their political philosophy.


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