Copyright © 2009 Pearson Education, Inc. Chapter 10 Worker Mobility: Migration, Immigration, and Turnover

Copyright © 2009 Pearson Education, Inc Table 10.1: Immigrants as a Percentage of the Labor Force, Selected Countries, 2002

Copyright © 2009 Pearson Education, Inc Introduction Determinants of worker mobility U.S. immigration history Characteristics of Mexican immigrants to the U.S. The impact of immigrants on the U.S. economy The immigration controversy

Copyright © 2009 Pearson Education, Inc Characteristics of Movers Age is the most important determinant of who migrates Within age groups, the more education, the more likely one is to migrate

Copyright © 2009 Pearson Education, Inc Table 10.2: U.S. Migration Rates for People Age 30-34, by Educational Level, 2005 (in percentages)

Copyright © 2009 Pearson Education, Inc Determinants of Worker Mobility A worker will migrate if the PV of the net benefit is greater than the cost of the move. Costs and benefits will depend on: Push and pull factors: Employment conditions in sending and receiving place Distance of move - moving, information, and psychic costs For international migration, the distribution of earnings in sending and receiving countries. Positive vs. negative selection.

Copyright © 2009 Pearson Education, Inc International Migration and Earnings Immigrants Earn Less Than Natives On Arrival The Earnings of Immigrants Rise Quickly Recent Immigrants Are Unlikely to Achieve Wage Parity With Natives Migration Investment Yields a Large Monetary Pay-Off for Most Immigrants

Copyright © 2009 Pearson Education, Inc Figure 10.1: Male Immigrant Earnings Relative to Those of the Native-Born with Similar Labor- Market Experience, by Immigrant Cohort

Copyright © 2009 Pearson Education, Inc U.S. Immigration History Immigration was relatively unrestricted until Congress passed the Immigration Act in 1924, which stipulated quotas based on national origin In 1965, the Immigration and Nationality Act abolished quotas and made family unification the major criteria for immigration Currently, U.S. policy toward illegal immigrants is embodied in IRCA of 1986 and border enforcement initiatives

Copyright © 2009 Pearson Education, Inc Table 10.3: Officially Recorded Immigration: 1901 to 2006

Copyright © 2009 Pearson Education, Inc A Profile of U.S. Immigration Almost 80 % of immigrants come from Latin America or Asia In 2005, there were an estimated 41.9 million hispanics in the U.S, of which 16.8 million were foreign-born Almost 1/3 of all foreign-born and 2/3s, or 10.9 million, of the foreign-born hispanics were of Mexican origin

Copyright © 2009 Pearson Education, Inc A Profile of U.S. Immigration Immigrants tend to settle in “gateway” states Immigrants are more likely than natives to have low levels of education Immigrants are more likely than natives to be in low wage occupations, but the immigrants’ wages grow more rapidly Immigrants are more likely than natives to receive welfare benefits

Copyright © 2009 Pearson Education, Inc Mexican Immigration The Bracero Program brought 5 million Mexicans to the U.S. between 1942 and 1964 The intent of the program was to alleviate U.S. agricultural labor shortages during WW11 Illegal immigration to the U.S. accelerated after the end of the Bracero Program

Copyright © 2009 Pearson Education, Inc Mexican Immigration Estimated annual illegal Mexican immigration has risen from 200k in the 1980s to 300k today There are an estimated million illegal immigrants in the U.S., half or more who are thought to be from Mexico

Copyright © 2009 Pearson Education, Inc Mexican Immigration Differences in human capital account for most of the large wage gap between native workers and Mexican-born workers Annual wage comparsion Native workers - $45,400 Non Mexican Immigrants - 37,000 Mexican Immigrants - 22,300 Mexican-born workers are concentrated in a few low skill, low wage occupations

Copyright © 2009 Pearson Education, Inc What are the positive effects of immigration? Effect on consumer prices Effect on business profits Effect on demand for goods and services

Copyright © 2009 Pearson Education, Inc What are the negative effects of immigration? Wage effects - Negative impact is largest on low-skill natives and previous immigrants. Income distribution effects - Immigration may be a factor in the increase in income inequality in the U.S. Fiscal effects - Immigration may increase the fiscal burden of state and local governments

Copyright © 2009 Pearson Education, Inc Figure 10.2: Demand and Supply of Rough Laborers

Copyright © 2009 Pearson Education, Inc Are Gains from Immigration Greater than Losses? Most economists conclude that the overall impact of immigration on the U.S. economy is small, but positive

Copyright © 2009 Pearson Education, Inc What Is The Impact On Mexico? Benefits Absorbs surplus labor Remittances are an important source of income for families and foreign exchange for the nation Immigration provides a political safety valve

Copyright © 2009 Pearson Education, Inc What Is The Impact On Mexico? Costs Loss of millions of young and ambitious workers Tensions with the U.S.

Copyright © 2009 Pearson Education, Inc If The Net Economic Effects Are Positive For The U.S.,What’s The Problem? Illegal immigrants and employers are breaking the law National security - Porous border increases the terrorist threat Impact on native workers wages and jobs Problems with assimilation of poorly-educated and low-income hispanics

Copyright © 2009 Pearson Education, Inc Alternative Solutions - Enforcement Only Build a border fence and strengthen human and non human border surveillance Tighten employer hiring practices and sanctions No legalization (amnesty) Guest worker program (maybe)

Copyright © 2009 Pearson Education, Inc Alternative Solutions - Legalization and Guest Worker Programs Path to citizenship for some illegals Guest worker program Tighten employer hiring practices and sanctions