To appear in 28 Georgetown Immigration Law Journal #1 (2014)April 2013 draft.The Law and Economics of Family Unification

By Alan Hyde

Abstract

The US is internationally unique in the percentage of immigrant visas reserved for family members. The practice has been criticized on the grounds that visas for parents, siblings, and adult children might better be reallocated to skilled workers, and Congress

has come close to adopting such reforms. This Article argues by contrast that family unification is a very good economic deal for the US. First, the limited data that exist,

contrasting immigrant earnings by type of visa, show no sharp distinction in earnings by type of immigrant visa. This is a surprise to one operating entirely within a human

capital framework in which all earnings in labor markets are necessarily a function of skills and education. The paradox is resolved by incorporating three economic models of migration or labor markets that are not usually applied to this debate: (1) New Economics

of Migration or family investment models, in which families, not individuals, are economic units; (2) network models of labor markets, in which productivity reflects social ties rather than skills as such; and (3) family economics in which a woman’s

economic contribution is often reflected in the earnings of her husband, children, or a family firm. Incorporating these models makes sense of three frequently-observed

patterns of immigrant economic activity that illustrate why family unification visas are a good economic deal. Immigrant women frequently perform paid or unpaid intrafamily

child care. Immigrants frequently work in family businesses. Immigrant wives frequently work while husbands build small businesses or attend graduate school. In

each of these common scenarios, the immigrant admitted on a family unification visa is economically productive and almost certain not to be taking a job from a US worker.

However, the immigrant’s economic contribution is importantly realized by the immigrant’s children, spouse, or family business. While skilled migration is crucial to US economic success, there is no reason that it should come at the expense of family

unification.

Distinguished Professor and Sidney Reitman Scholar, Rutgers University School of Law, Newark NJ. An earlier version was presented at the Immigration Law Teachers Workshop, Hofstra University School of Law, June 1-2, 2012; thanks to Jennifer Gordon, Audrey Macklin, and David Martin for helpful comments. Rutgers University is one of the best places in the US to study immigration, and my students make teaching immigration law a dream. Outstanding research contributions to this paper were made by Amy Morilla, Joseph Dearie, and Paul Abels.

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The US stands alone internationally in the importance of family unification to its system of immigration law. Family unification is the biggest category of immigrant visas and takes up, through derivative visas, much of other visa categories as well.1 While long established, this preference for family unification has been controversial. Academics, study commissions, and Congressional Republicans have frequently advocated trimming the number of visas devoted to family unification in order to increase the number of visas available for skilled workers, and some Democrats have shown themselves willing to do this deal. 2 There has been little academic or policy defense of family unification.3

This Article is the first such defense from an economic perspective. I argue that family unification visas are an excellent economic deal for the US. I need no convincing of the importance of skilled migrants to the US economy.4 US methods for recruiting skilled workers can be improved in many ways that lie outside the subject of this Article.5 This Article argues rather that any such increase or improvement in recruitment of skilled migrants should not come at the expense of current visas for family members.

The defense of family unification proceeds in three steps. Part III of this Article reviews the limited existing literature that attempts to examine the economic contributions of immigrants depending on the type of visa under which they were admitted. Most show surprisingly little difference, with any such difference at admission dissipating over time. At the same time, other

1 Part I infra.2 Part II infra.3 Hiroshi Motomura has defended family unification from an ethical perspective. Hiroshi Motomura, The Family and Immigration: A Roadmap for the Ruritanian Lawmaker, 43 AM.J.COMP.L. 511 (1995); Hiroshi Motomura, We Asked for Workers, but Families Came: Time, Law, and the Family in Immigration and Citizenship, 14 VA.J.SOC.POL’Y & L. 103 (2006).4 Alan Hyde, WORKING IN SILICON VALLEY: ECONOMIC AND LEGAL ANALYSIS OF A HIGH-VELOCITY LABOR MARKET 125-39 (2003).5 The weakest link in the US system of recruiting skilled immigrant labor is the absence of any formal pathway from graduate or post-graduate study to lawful permanent residence. Intelligent discussion of admission of skilled individuals should now begin with the outstanding article by my Rutgers colleague Jennifer Hunt, Which Immigrants Are Most Innovative and Entrepreneurial? Distinctions by Entry Visa, 29 J.LAB.ECON 417 (2011). Hunt has hold of an unusual database, not previously used, that permits her to track various accomplishments by type of visa at entry. While immigrants in all visa categories compare well with similarly-situated natives, for some the differences are not major. Immigrants who arrive to attend high school in the US, for example, have about the same economic performance as similar natives. The most striking difference, however, is for immigrants who arrive in the US on student visas to perform post-doctoral work. They make more money than similar natives and are vastly more likely to patent, found companies, and publish. They are also, as immigration lawyers know, a group with no formal path from student visa to lawful permanent resident status. On finishing that post-doctoral work, the noncitizen may remain in the US if sponsored by an employer or spouse, just like any other noncitizen. This absence of a pathway from graduate work to residence is well-known and has given rise to the proposal—which Hunt shows to be well-founded—that a “green card be stapled to every PhD given a noncitizen.” (While this proposal has been attributed to every prominent US technology executive at one time or another, the earliest reference I have tracked down is from Mike Maibach, then Director of Governmental Affairs for Intel. Sally C. Pipes. Graduating with a Green Card, Chief Executive (April 1, 1995), available online at http://www.thefreelibrary.com/Graduating+with+a+green+card.-a017015380.) Hunt’s work shows that, should Maibach’s proposal prove too heavy a lift, an effective program might award lawful permanent residence to all noncitizens who complete post-doctoral work in science, technology, and engineering. Republicans should worry more about paths from graduate school to lawful permanent residence, and less about cutting family visas.

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countries’ attempts to direct visas to skilled workers—Canada’s has been influential in US policy debates—have often had disappointing unintended consequences.

Part IV summarizes the case against visas for family members, which takes place inside a narrow human capital framework, within the assumptions of which it is tautologically true. In a human capital framework: (A) Decisions to migrate are made by individual maximizers, who migrate when the anticipated benefits to migration exceed the anticipated costs. (B) Migrants enter labor markets in which compensation is entirely or predominately a function of “human capital” or “skills,” typically measured by degrees held or work experience.6 (C) Unpaid labor is ignored, as difficult to measure and probably reflecting “low human capital.” Under these three simplifying assumptions, common to labor economics within a human capital framework, it is true tautologically that an immigrant with a lot of skills will outearn a migrant who lacks them, and it is just irrational to issue a family member a visa that might have gone to a skilled worker.

However, substantial economic analysis departs from these three simplifying assumptions of the human capital approach. This Article is among the first to apply these in the legal literature and certainly the first to apply them to the analysis of visas for family members. Part V will broaden our perspectives to take in three bodies of economic literature that helpfully correct the human capital approach. This enriched economic theory better explain the empirical results in Part III. It shows why, contrary to the tautologies of human capital, immigrants sponsored by family members do well even in existing economic studies, while suggesting simultaneously that those studies almost certainly underestimate their economic contribution. Part V will introduce:

A The New Economics of Migration, or family investment model, under which the unit making the decision to migrate is the family, not an isolated individual;

B Network models of labor markets, in which individual earning importantly reflects social ties and location in networks, rather than just human capital; and

C Family economics, in which unpaid intrafamily care is valued. Similarly, low paid work that grows a family business is given its full value even though reflected in the income of the business rather than the individual.

With these powerful lenses before our eyes, we can make sense of the otherwise surprising findings in Part III that immigrants admitted with family ties are just about as successful as immigrants admitted for skills. Part VI assembles ethnographic illustrations. These illustrate three common patterns. (A) Immigrants admitted on family unification visas are particularly likely to perform unpaid intrafamily care, particularly in Latina and Asian families. Their economic contribution shows up, not in their individual earnings (which may be zero), but in the earnings of their daughters and sisters who are able to work full-time, and in the health and well-being of the children in their care. (B) Immigrants admitted on family unification visas

6 The convention in this literature is to use “skills” to refer to academic degrees held, perhaps (but usually not) including work experience. I will do my best to reject this convention. Academic degrees, as we shall see, are not a good proxy for skills. They are an even poorer proxy for “skills sought by employers.” However, this Article will quote from other scholars who, unfortunately in my view, use the term “skills” as synonymous with academic degrees. On the important skills possessed by “unskilled” labor without formal education past high school, see Tom Juravich, CHAOS ON THE SHOP FLOOR: A WORKER’S VIEW OF QUALITY, PRODUCTIVITY, AND MANAGEMENT (1985)(participant observer in wire factory where only the machine operators have any idea how to operate the firm’s antiquated machines); Ken C. Kusterer, KNOW-HOW ON THE JOB: THE IMPORTANT WORKING KNOWLEDGE OF “UNSKILLED” WORKERS (1978).

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often work in family-owned businesses. Their economic contribution shows up in the earnings of the business. (C) Immigrant wives are often in the labor force while their husbands build small businesses or attend graduate or other school. In all these patterns, the immigrant will be making crucial contributions to economic growth that will be reflected, not in her individual earnings, but in the earnings of other family members or their business.

Part VII concludes. The Argument, as may be seen, will have ranged through economic data, economic theory, and ethnography. It will involve inference and assumption and cannot be definitive. But it will strongly suggest that the US benefits from visas for family members, and that these contribute powerfully to economic growth and immigrant integration. We should think very carefully before changing a system that has brought such benefits to the US.

I. Family Unification in Current Immigration Law

About two-thirds of lawful immigration to the United States is authorized because of the immigrant’s relation to a US citizen or lawful permanent resident.7 The Immigration and Nationality Act sets aside 480,000 visas annually for family-sponsored immigrants.8 It also creates large categories not subject to this world-wide level, most of which are also for family members.9 By contrast, the statute caps employment-based immigrant visas at 140,000 annually, a number that has not changed for decades.10 About 45% of these employment-based visas go to family members of the principal visa beneficiary.11

The largest single group of migrants comprises the “immediate relatives” of US citizens: spouses, unmarried minor children, and parents of a citizen of the US. In fiscal 2011, 453,158 such immediate relatives became lawful permanent residents of the US.12 There are no numerical quotas or waiting times for the admission of such “immediate relatives.” A smaller group-- 234, 931--became lawful permanent residents under the family preference categories, which are subject to numerical limitations. 13 Combining the immediate relatives, and those admitted in the family preference categories, yields about 65 percent of lawful migration to the US.

7 http://www.migrationinformation.org/charts/spot-oct12-fig2.cfm8 INA Sec 201(c ) (1), 8 U.S.C. Sec 1151(c ) (1). As immigration professionals know, these statutory numbers are just the start of more complicated calculation that I will spare the reader. They may be taken as a rough guide to relative importance.9 INA Sec 201(b)(2), 8 U.S.C. Sec 1151 (b)(2).10 INA Sec 201(d), 8 U.S.C. Sec 1151(d). The limit of 140,000 visas, for immigrants admitted for skills, was set in 1990, when both the US economy, and the pool of talent available (particularly from Asia), were significantly smaller. This was more than a doubling of the earlier annual limit of 54,000 such visas. Aristide R. Zolberg, A NATION BY DESIGN: IMMIGRATION POLICY IN THE FASHIONING OF AMERICA 380 (2006).11 [check figure: AMMF 7th ed 283 say “over half” of 140,000 go to derivative beneficiaries]12 Joseph Russell & Jeanne Batalova, Green Card Holders and Lawful Migration to the United States, http://www.migrationinformation.org/USfocus/display.cfm?ID=911 (October 2012).13 Id. These preference categories, set out in INA Sec 203(a), 8 U.S.C. Sec 1153(a), currently comprise:

(1) Unmarried adult sons and daughters of citizens(2) Spouses, minor children, and unmarried adult sons and daughters of lawful permanent residents(3) Married sons and daughters of citizens(4) Brothers and sisters of citizens

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Family members also take a substantial percentage of the immigrant visas issued under other provisions of the statute, as derivative beneficiaries of the principal visa recipient.14 As mentioned, 45 percent, of the paltry 140,000 visas set aside for employer sponsorship or special skills or abilities, actually go to such family members “accompanying or following to join” their spouse or parent.15 Similarly, 40 percent of the visas issued under the diversity lottery go to spouses and children of the lottery winner.16 Refugees, too, may bring in their spouses and unmarried minor children.17

Finally, family ties are important in other aspects of US immigration law.18 For example, ties to spouses or children who are US citizens or lawful residents may be crucial in considering whether to waive grounds that would make a noncitizen inadmissible19 or cancel a noncitizen’s removal from the US.20

II. Critique of family unification

This importance given to family unification in US law and practice is long-standing. Throughout all the immigration reforms of the twentieth century, from the era of national origin quotas to the present, there have always been preferences for family members, and their numbers have always dwarfed the numbers available for skilled workers.21 Such a preference for family unification is, so far as I know, unique to the US. Immigration policy often compares the US to Canada and Australia, two culturally-similar countries whose populations include a higher proportion of immigrants than the US. Both devote a higher percentage of immigrant visas to “skilled” immigrants.22 International law instruments relating to migration do not protect family unification as a value. Neither the Refugees Convention nor the Convention on Migrant Labor refers to any right to be accompanied by family.23

14 INA Sec 203(d), 8 USC Sec 1153 (d). Such derivative status is given to the spouse or unmarried minor child of the principal visa beneficiary.15 16 17 INA Sec 208(b)(3), 8 USC Sec 1158(b)(3).18 See generally Motomura, supra n.3.19e.g. INA Sec 212(h)(1)(B),8 U.S.C. Sec 1182(h)(1)(B)(waiver of certain criminal law grounds of inadmissibility); INA Sec 212(i)(1), 8 U.S.C. 20 INA Sec 240A(b), 8 U.S.C. Sec 1229b(b).21 No purpose would be served here by tracing all the developments in family unification policy, so long as the reader remembers that it is long-standing, has survived all twentieth and twenty-first century immigration law reform, and that the numbers devoted to family unification are consistently three or four times the number of visas set aside for workers either with skills thought to be needed by the economy or sponsored by employers. For more historical detail, see Zolberg, supra n.10; Susan F. Martin, A NATION OF IMMIGRANTS (2011).22 Canadian practice inspired Republican legislative proposals in 2007 and will be considered in more depth below. Australia admits twice as many immigrants for skills as for family ties. Australian Bureau of Statistics, 3416.0 Perspectives on Migrants, 2011 http://www.abs.gov.au/AUSSTATS/abs@.nsf23

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Beginning in the early 1980s, the preference for family unification became controversial politically among free-market economists associated with the Council of Economic Advisers and American Enterprise Institute, who argued that immigration in general was or could be positive for the US, but had to be rebalanced away from family unification and toward skilled workers.24 (Again, this Article does not take on the question of skilled workers, but is focused on the critique of family migration). The rationale for limiting family unification visas varied. Barry Chiswick, writing in a human capital framework, assumed that visas awarded either for employer sponsorship, or for degrees, would naturally attract immigrants with higher human capital than those awarded visas because of their relation to current US residents.25 George Borjas, writing more than a decade later, understood that the two general types of visas attract generally similar individuals from any given country. He frankly favors reallocating visas from family preferences, to skilled workers, as a way of limiting immigration from Latin America in favor of immigration from the rest of the world.26

24 I have not located any criticism of family unification before the early 1980s. The Select Commission on Immigration and Refugee Policy, appointed by President Carter in 1977 and chaired successively by Reuben Askew and Father Theodore Hesburgh, instead advocated expansion of the numbers devoted to family unification. It recommended placing adult unmarried sons and daughters of US citizens into the category without numerical restrictions, and would have done the same for grandparents of adult US citizens, a category never before or since included in the immigration laws. There was a proposal, rejected by the Select Commission, to eliminate visas for siblings. Martin, supra n.21, at 208. The lasting contributions of the Select Commission, eventually adopted in 1986, were sanctions on employers who hired the undocumented, and legalization of some unauthorized migrants.25 The earliest suggestion that I have found, that visas be reallocated from family unification to skilled workers, is remarkably offhand. In a detailed essay appearing in two different collections published by the American Enterprise Institute, economist Barry Chiswick offered a highly upbeat analysis of the economic progress of immigrants, showing them quickly equaling and surpassing the earnings of similarly situated residents, a finding true in several different countries. In concluding, Chiswick added: “In the empirical analysis it was not possible to distinguish immigrants who would be admitted under a kinship criterion, currently the primary basis for rationing immigration visas to the United States, from those who would be admitted under a productivity criterion. [footnote omitted]. There is a presumption, however, that a properly functioning productivity criterion would be more successful than a kinship criterion in identifying those who would have greater skills, with greater transferability to the United States, and more innate ability and work motivation relevant for this country.” Barry R. Chiswick, The Economic Progress of Immigrants: Some Apparently Universal Patterns, in CONTEMPORARY ECONOMIC PROBLEMS 1979 (William Fellner ed. 1979) at 359, reprinted THE GATEWAY: U.S. IMMIGRATION ISSUES AND POLICIES 119, 157 (Barry R. Chiswick ed. 1982). Thirty years on, little has changed: it is frequently “presumed,” seemingly reasonably, that targeting visas to skilled workers would attract more productive workers, yet the empirical case has still not been made.26 George J. Borjas is the most prominent scholar concerned about what he believes are the declining skills of immigrants to the US. His advocacy of trimming family unification visas, and reallocating these to a Canadian-style points system, influenced Republican Congressional proposals in 2007. However, Borjas is absolutely explicit that this proposal is designed to reallocate visas away from Latin America to the rest of the world. “[T]here would not have been a decline in the relative skills and earnings of immigrants if the national origin mix of immigrants had remained the same in recent decades.” George J. Borjas, HEAVEN’S DOOR: IMMIGRATION POLICY AND THE AMERICAN ECONOMY 10 (1999). “[T]he decline in immigrant economic performance can be attributed to a single factor, the changing national origin mix of the immigrant population. [italics original].” Id. 45.Borjas does not argue that among immigrants from any given country, the type of visa will change the skills of those admitted. Rather, he accepts the studies, discussed infra Part III, showing little if any difference among immigrants from any given country by type of visa used at entry. “[T]he points system works not by attracting more skilled immigrants from each source country, but by changing the national origin mix of the immigrant population.” Id. 59. “The Canadian point system has little effect on the education or relative wages of specific national origin groups.” Id. 60, citing George J. Borjas, Immigration Policy, National Origin, and Immigrant Skills: A Comparison of Canada and the United States, in SMALL DIFFERENCES THAT MATTER: LABOR MARKETS AND INCOME MAINTENANCE IN CANADA AND THE UNITED STATES 21-43 (David Card and Richard B. Freeman eds. 1993). “To some extent, the point system would mark a de facto acceptance of the kinds of national origin restrictions that

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Beginning in the 1980s, Republicans have repeatedly attempted to reduce the number of visas for family unification. Democrats have shown themselves willing to agree as part of larger deals in which they got other things they valued more. Such proposals have come close to adoption.

In the run-up to the 1986 legislation, Sen. Alan Simpson, a leading Republican voice on immigration, tried and failed to eliminate visas for siblings.27 As noted, this did not make it into the 1986 legislation. Simpson returned to the fight in 1988, introducing legislation, this time co-sponsored by Sen. Edward Kennedy, to limit family visas. Sibling visas would have been restricted to those who had never married, and the numbers gained then redirected into a new category of so-called independent migrants who would qualify on combination of education, skills, English fluency and diversity of source country. This category of independent migrants had been advocated by the Select Commission. Simpson-Kennedy passed the Senate but not the House, where business interests, supported by the administration of the elder President Bush, opposed its firm cap on admissions and joined with ethnic and religious organizations supporting family unification. When reintroduced in 1989, Simpson-Kennedy no longer touched family unification.28

Legislation in 1990 created a new Commission on Immigration Reform which did not really get underway until President Clinton named former Representative Barbara Jordan to its head. The Commission issued a series of reports in the 1990s that represented no clear vision for immigration. One advocated eliminating visas for siblings and adult children for redistribution to other categories.29 Like almost everything in the Jordan Commission, this sent a highly-confused message about the economic value of all immigration. The eventual 1996 legislation retained visas for siblings and adult children, but instead sought to limit family unification by requiring economic sponsorship and restricting access to public benefits. 30 In its final September1997 Report, following the1996 legislation, USCIR reiterated its earlier recommendations to narrow family reunion.31 These failed to find Congressional sponsors at that time.32

characterized US immigration policy prior to the 1965 Amendments.” Id. 61.While detailed analysis of Borjas is beyond this paper, the assertion of declining immigrant quality may be

disposed of quickly. It is true that a snapshot of immigrants in their first year in the US shows a larger gap than in previous decades between their earnings in that year and the earnings of similarly-situated US workers. It is also true, however, that the immigrants’ earnings then grow more rapidly, and converge with US workers about ten years after arrival. Harriet Orcutt Duleep & Daniel J. Dowhan, Insights from Longitudinal Data on the Earnings Growth of US Foreign-Born Men, 39 DEMOGRAPHY 485, 504 (2002). 27 28 Martin, supra n.21,at 216; Zolberg, supra n.10, at 37829 U.S. Commission on Immigration Reform, LEGAL IMMIGRATION: SETTING PRIORITIES (1995).30 The Jordan Commission had invented economic sponsorship but would have required it only to admit adult parents, Martin, supra n.21, at 267-68. Congress instead required such sponsorship for all family admission, INA Sec.212(a)(4)(C), 8 USC Sec 1182(a)(4)(C).31 US Commission on Immigration Reform, 1997 Report to Congress: Becoming an American: Immigration and Immigrant Policy, at xvii-xix, 224-25. The insistence on elimination of a visa category that Congress had, only a year earlier, voted to restrict but not eliminate, before any evidence was available on the impact of Congress’s plan, shows the ideological quality of this debate.32 Zolberg, supra n.10, at 429 attributes this failure to both parties’ concern with the Hispanic vote, and Sen. Simpson’s retirement and replacement, as chair of the relevant committee, by the much more pro-immigration

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However, a decade later, when negotiations around comprehensive immigration reform became intense in 2007, Congressional Republicans once again sought to restrict family unification.33 One version would have eliminated entirely visas for siblings, parents, and adult sons and daughters. In another version, parents could come in but only if they were over 65, had health insurance, and majority of their children lived in US. Republicans also unsuccessfully proposed increasing the financial liability of the visa sponsor from the current 125% of poverty level to 200%, a level at which 45% of US families would be unable to sponsor a family member. Sen. Kennedy, the leading Democratic negotiator, proposed to reduce backlogs in current categories, then eliminate visas for siblings and adult children (except for 5000 hardship visas for “medical or other hardships that require their relatives’ presence”) and over eight years shift 140,000 slots to a new points system for skilled migrants.34 It is reported that Sens. Kennedy and McCain signed off on this proposal, at which point Sen. Robert Menendez stormed out of the room.35 However, negotiations eventually collapsed and no comprehensive immigration reform was enacted in 2007. Republicans have continued to advocate limiting family unification, while Democrats have proposed expanding it.36 The issue may surface in forthcoming discussions of immigration reform.37 Neither side, however, has ever put forward much in the way of economic support for its proposals.38

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III. Economic data on Family Unification

The thesis of this Article is that, on this issue, Sen. Menendez was right and Sen. Kennedy was wrong. Family-based visas are a very good economic deal for the US. They do not detract

Spencer Abraham.

33 [websites formerly used are down; must get other source for precise Republican 2007 proposals.]34 http://kennedy.senate.gov/imo/media/doc/FAMILY%20REUNIFICATION%20REMAINS%20THE%20CORNERSTONE%20OF%20LEGAL%20IMMIGRATION%20.pdf [This is no longer active 2013; must find another source for Kennedy’s 2007 proposal].35 36 See, e.g., the Reuniting American Families Act introduced in different versions by Sen. Menendez and Rep. Honda. This would recapture visas unused because of bureaucratic delay; permit lawful permanent residents to bring in spouses and children as immediate relatives exempt from numerical restrictions, a category currently restricted to relatives of US citizens; increase country quotas; allow unification even after the death of a spouse; and remove bars from families of WWII Filipino soldiers. The 2007 version, which also included some amnesty provisions, got 53 Senate supporters, but did not pass due to Republican filibuster.37 David Brooks, New York Times columnist and regular conduit for Republican talking points, devoted his February 1, 2013 column to the proposition that immigration reform is an “easy problem,” advocating, without any sense that this might be controversial: “bend the current reform proposals so they look more like the Canadian system, which tailors the immigrant intake to regional labor markets and favors high-skill workers.” David Brooks, The Easy Problem, New York Times, Feb. 1, 2013, at A27, col.1. Jeb Bush has published a book advocating reallocation of family unification visas. Jeb Bush & Clint Bolick, IMMIGRATION WARS: FORGING AN AMERICAN SOLUTION (2013).38 “It does not appear that the current set of proposals for reform are informed by the findings of social science research.” Michael Fix & Wendy Zimmerman, Immigrant Families and Public Policy: A Deepening Divide, in IMMIGRATION AND THE FAMILY: RESEARCH AND POLICY ON U.S. IMMIGRANTS 260 (Alan Booth, Ann C Crouter & Nancy Landale eds 1997).

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from recruitment of skilled individuals and in fact explain why US modes of recruiting skilled workers (employer and family sponsorship) are so much more economically successful than the Canadian points system. Making this case, however, requires three steps and will inevitably involve inference and suggestion. This is because neither the government, nor any other source, collects systematic economic data on immigrants, let alone by type of visa. The 2000 Census was the last to ask respondents where they were born; since that Census, researchers must use the much smaller samples of the American Community Survey or other special surveys.

My argument thus proceeds in three steps. Part III of this Article surveys the limited economic literature that attempts, by inference, to compare the economic performance of immigrants according to the type of visa under which they were admitted. While the studies employ different methodologies to estimate this, and do not all agree, on balance they suggest very small differences in economic performance in the year following admission, followed by convergence. Part IV examines the difficulties that a human capital approach encounters in explaining the data in Part III. Part V employs broader economic theory than the customary human capital framework in order to explain the results in Part III, and to suggest further that these may systematically undervalue the economic contributions of family unification migrants. Specifically, we will employ the New Economics of Immigration, in which economic actors are precisely families, not individuals; network models of labor markets, in which compensation partly reflects ties to others, not just individual human capital; and family economics, valuing economic contributions that are realized, as is disproportionately true for immigrants, by other family members or family businesses. Part VI illustrates the economic theories with ethnographies and other social science on immigrant families. It will show that immigrants admitted on family unification visas are particularly likely to perform unpaid intrafamily labor that enables other family members to be more productive; to work in family businesses (so that their contributions show up as returns to the business, not the individual); and to work to support other family members’ education or building small businesses. The result will be a suggestive, but alas not definitive, portrait of the economics of family unification.

Of course, one need not base one’s views on family unification on economic data. I am not one of those legal scholars who thinks arguments are illegitimate because they do not seek to maximize output. As noted, neither the case for or against family unification has much invoked economics. The case for family unification normally speaks exclusively in the language of affection and sentiment. I have no objection to such argument, but find it indeterminate, to put it mildly. How close are you to your brothers and sisters? parents? Responses to these questions vary sharply and provide little basis for drawing the preference lines in one place rather than another.

So let us turn to the data attempting to link behavior to type of visa at admission. How different are the characteristics of those on each visa? How many family members will the median immigrant sponsor for future immigration? How does the economic performance of different immigrants compare by type of visa?

The first thing we learn from the data are that the skills and education of immigrants to the US do not differ sharply by type of visa. Since more visas are available for family members, this has at times been the most efficient way of securing a visa for a trained professional who might have qualified under another legal provision. Such visa strategies are endogenous to changing

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policies and practices of visa administration. For example, when national origin quotas were eliminated in 1964, relatively few Asians had a US citizen parent, child, or sibling to sponsor them. The first generation typically arrived under employer sponsorship, but this ratio did not last long, as that first generation soon sponsored the migration of their parents, children, and siblings. By the early 1970s, the majority of migration from Asia was on family unification visas, including thousands of professionals who, in education and profession, were similar to the relatives who sponsored them.39

I think it important to confront directly the power of images. “Immigrant on family unification visa” is a good example of an abstract category that, the cognitive scientists tell us, can be grasped in the brain only through the image of a prototype.40 I think that our mental pictures of visa categories are likely to reflect racial and ethnic stereotypes. I have not done any research. I am speaking precisely for myself here, identifying a habit of thought that is both necessary, and necessary to struggle against. When I have to picture an immigrant sponsored by an employer, I form a mental image of an engineer from Asia, often the father portrayed by Irrfan Khan in the movie The Namesake. This is probably common and in my case surely reflects my earlier research and interviews in Silicon Valley.41 And when I say “family unification immigrant,” my mind typically flashes to the family checking in ahead of me the last time I flew Aeromexico, returning to be with family in Mexico, checking enormous, strangely-wrapped parcels while a great many children raced around JFK airport. Even though I obviously have no knowledge of this family’s immigration status, the experience of waiting in line after their protracted check-in made the image indelible. I expect that most readers will have similar visual prototypes, irrespective of the reader’s politics or ethnicity. But, obviously, Asian engineers have parents and siblings, and Latinos have skills sought by employers, and we cannot assume from their position in the US economy that we know what sort of visa brought them to the US, particularly, as noted, given the numerical domination of family unification visas even for Asian immigrants.

Second, the data clearly dispel a common trope of the political forces opposed to family unification: fear of so-called “chain migration.” The fear is that each immigrant admitted can potentially sponsor dozens if not hundreds of siblings and children, who in turn sponsor their spouses, and the spouses’ siblings and children, and so on.42 While theoretically possible, this 39 John M. Liu, The Contours of Asian Professional, Technical and Kindred Work Immigration, 1965-1988, 35 SOCIOLOGICAL PERSPECTIVES 673, 696 (1992). For example, between 1971 and 1984, the number of immigrants from the Philippines who entered on family unification visas nearly doubled, while the number admitted through employer sponsorship declined by three-quarters, so that by 1984, over 16 thousand Filipinos migrated through family sponsorship, while only 1503 migrated in occupational preference categories. Gordon F. DeJong, Brenda Davis Root, and Ricardo G. Abad, Family Reunification and Philippine Migration to the United States: The Immigrants’ Perspective, 20 INT’L MIGRATION REV. 598, 600 (1986). The family visa group, however, included many trained professionals, Liu at 690 (Table 3d). Similarly, James T. Fawcett, Benjamin V. Cariño, Insook Han Park, & Robert W. Gardner. SELECTIVITY AND DIVERSITY: THE EFFECT OF U.S. IMMIGRATION POLICY ON IMMIGRANT CHARACTERISTICS (1990), surveyed Koreans and Filipinos who entered in 1986. A high proportion of those admitted on family unification visas possessed high level skills.40 The classic examples are bird, for which people picture a robin, or furniture, for which people picture a chair. Eleanor Rosch [which paper? 1970s]41Hyde, supra n.4.42 This fear may have led the 1970s Select Commission, generally receptive to expanding family unification, to discuss, though eventually not recommend, limits on sponsoring siblings. As its chairman, Rev. Theodore Hesburgh, stated: [get quote of 84 migrants]. US Select Commission on Immigration, (1981). Try to read this sentence without fashioning a mental image of a large Latin American family like the one in line ahead of me at

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bears no resemblance to the actual behavior of immigrants to the US, each of whom over a lifetime will sponsor, on average, 1.2 family members.43

Third, how well do immigrants on different visas perform? A handful of studies use different estimation techniques to attempt to compare immigrant economic performance by type of visa. Jasso and Rosenzweig found little difference in skills (meaning education levels) at the time of entry. Entrants on family unification visas resemble the family members who sponsored them.44 Recent papers by these authors use the New Immigrant Survey to assemble a clearer picture of sponsorship by recent immigrants. Sponsorship is interestingly related to sending remittances. It appears that recent immigrants sponsor for immigration their more educated children, which the authors interpret as maximizing return to the family, since those more educated children will do the best in the US labor market, with its rewards for education. Less-educated children remain in the country of origin and receive remittances from their US-based parents and siblings. “Thus we find that family reunification is positively selective on skill…”45

Duleep and Regets compared economic performance, by country of origin, of cohorts who entered in years with relatively greater or lesser proportion of family unification visas. Cohorts with high percentages of family unification immigrants made less money on arrival but converged with the normal over time, that is, had relatively high earnings growth. They also observed a high positive correlation in the percentage admitted as siblings, and both years of education (for immigrants from Asian and Latin America), and propensity to start a business. The authors interpret the data on business startups as showing the importance of siblings’ financial and social capital in immigrant business startups. (We will return to this finding). 46

Scholars analyzing data from Canada and Australia, where family unification migrants comprise a smaller proportion of the total, have similarly found little difference in skills at entry between immigrants admitted for skills and immigrants admitted for family unification.47

Aeromexico.43 “Historically, a new immigrant will, ultimately, sponsor 1.2 dependents.” B. Lindsay Lowell & Micah Bump, Projecting Immigrant Visas: Report on an Experts’ Meeting at 6 (Sept 2006)(held at Georgetown U to reconcile competing Congressional estimates), http://www12.georgetown.edu/sfs/isim/Event%20Summaries&Speeches/Lowell,%20ProjectionsWorkshop.pdf. Accord, 1Bin Yu. CHAIN MIGRATION EXPLAINED: THE POWER OF THE IMMIGRATION MULTIPLIER (2008)(1each employment-related immigrant from Middle East, Latin America or Africa sponsors on average 1.3 family members; from Europe and Asia, 1.1).

44 Guilllermina Jasso & Mark R. Rosenzweig, Do Immigrants Screened for Skills Do Better Than Family Reunification Immigrants?, 29 INT’L MIG REV 85-111 (1995).45 Guillermina Jasso & Mark R. Rosenzweig, Remit or Reunify?: US Immigrant Parents, Remittances, and the Sponsorship of Children 4, 18-21 (Presented at the Research Conference on Remittances and Immigration, Federal Reserve Bank of Atlanta, Nov 2010).46 Harriet Orcutt Duleep & Mark C. Regets, Family Unification, Siblings, and Skills, in IMMIGRANTS AND IMMIGRATION POLICY: INDIVIDUAL SKILLS, FAMILY TIES, AND GROUP IDENTITIES 219-44 (Harriet Orcutt Duleep & Phanindra V. Wunnava eds. 1996). The correlation between admission as a sibling and years of education is consistent with the sources cited n.39 on the propensity of the first Asian professional or managerial immigrant to sponsor siblings who are similar to the first migrant in education. Recall that admission of siblings would have been eliminated in the 2007 proposal.

47 Deborah A. Cobb-Clark, Do Selection Criteria Make a Difference?: Visa Category and the Labour Market Status of Immigrants to Australia, 16 ECON.RECORD 18-31 (2000)(entrants on family visas make a little less on arrival but

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Finally, other studies exploit the difference between the American preference for family unification, and the Canadian and Australian preference for education, and compare results. Perhaps surprisingly, a points system like Australia’s or Canada’s does not result in immigrants that are higher-earning, educated, or more proficient in English, than US system, once country of origin is controlled for.48

Some studies observe bigger differences among immigrants by type of visa. While as noted, Jennifer Hunt found some groups of immigrants admitted on student visas to surpass similar native-born residents in economic performance, the same was not true of immigrants admitted on family unification visas, who have labor market experiences similar to native-born citizens of similar education.49

In 1980, the last year for which noncitizens were required to register annually, the Immigration and Naturalization Service asked a random sample to list their class of admission. These were matched with Social Security data. Immigrants who had been admitted during the 1970s on employment-sponsored visas earned more, and were more likely to be employed as professionals, than immigrants sponsored by family members. This study was not published until 1992, however, by which time it was clear to its authors that it represented a snapshot of the 1980 immigrant population, not a timeless verity. Employment-sponsored visas, half of which in 1976 went to professionals, came to include a higher percentage of less-skilled workers in the 1980s until this category was itself eliminated in 1990.50 I would also add that a 1980 snapshot would have just begun to pick up the numerically-significant category of professionals from India, Korea, and the Philippines who nevertheless entered, increasingly in the 1980s, under family sponsorship.51 Despite these ways in which a 1980 snapshot might have exaggerated the economic advantages to employer sponsorship, the differences were still not great. Family-sponsored migrants were just as likely to work as employer-sponsored migrants, and were less likely to be taking jobs from U.S. workers or exerting negative effect on their compensation.52

So the picture is cloudy. But isn’t there something perverse about these studies that find little or no difference in the economic performance between migrants specifically selected for their skills, typically meaning education, and migrants selected for family ties that have no necessary relation to skills? How can it be that letting employers select for skills admits immigrants who

differences dissipate over time); Arnold De Silva, Earnings of Immigrant Classes in the Early 1980s in Canada: A Reexamination, 23 CANAD.PUB.POL’Y 179 (1997)(rapid convergence in earnings among immigrants in Canada despite visa category).

48 Heather Antecol, Deborah A. Cobb-Clark, & Stephen J. Trejo, Immigration Policy and the Skills of Immigrants to Australia, Canada, and the United States, 38 J.HUM.RESOURCES 192-218 (2003). 49 Hunt, supra n.5.50 Elaine Sorensen, Frank D. Bean, Leighton Ku, and Wendy Zimmermann. IMMIGRANT CATEGORIES AND THE U.S. JOB MARKET: DO THEY MAKE A DIFFERENCE? 3 (1992).51 Supra n.3952 Sorensen et al, supra n.50, at 4. “U.S. worker,” by the way, is a statutory term that comprises, not only U.S citizens and nationals, but all those authorized to work in the US, including lawful permanent residents, refugees, asylees, and noncitizens admitted in order to work. INA Sec. 212(t)(4)(D), 8 USC Sec. 1182(t)(4)(D). In popular discussion, this concern is often expressed as “taking a job from an American,” but use of the statutory term “United States worker” is not only legally more accurate, and generous; it captures the phenomenon that those who might be at risk from the wrong kind of immigration might well be recent migrants themselves, not Americans, and the statute’s concern about this.

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differ only slightly from those admitted by relatives? We noted the suggestion of Jasso and Rosenzweig that US-based parents are more likely to sponsor their more educated children,53 but surely this is only a small part of the story.

A bigger part of the story is that immigrants who arrive sponsored by family arrive with networks and connections. This is why, irrespective of visa (or even whether their migration is authorized at all), migrants with family ties do better than similar migrants who lack them.54 Immigrants who arrive sponsored by employers have a connection with that employer, but not necessarily anywhere else in the economy. And immigrants who arrive in Canada or Australia under those countries’ points system have no necessary connection with anyone in the economy—and their dismal economic performance reflects this. Recall that the McCain-Kennedy agreement in 2007 would have reallocated visas from family unification to a new points system on the Canadian model. Adoption of such a Canadian system, long a favorite of George Borjas, was a major Republican demand in the 2007 debates. Examining the failures of that system—as Congressional Republicans refused to do in 2007--will help set the stage for our search in Part V for a richer economic theory of immigrants’ economic performance.

The Canadian points system in place in 2007 was a disaster, precisely because it admits migrants on the basis of degrees and work experience, without any assurance that there is any need for these “skills” in the Canadian economy.The system was heavily backlogged. In 2007, 800,000 applications were pending, with wait times of 4 years or more.55 Without any need for employer sponsorship, thousands apply. Most importantly, the program admits engineers, physicians, and other highly-educated migrants without any concern for whether these skills are needed in the Canadian economy or these degrees valued by Canadian employers. The result is that shockingly few of these professionals ever practice their professions in Canada. I had heard the Vancouver joke that, if you need to see a doctor in a hurry, go the curb and yell “Taxi!” This turns out to be no joke at all. A physician from India who migrates to Canada has a 19% chance of working as doctor during five years after admission; from Eastern Europe 8%, China 4%, Philippines 3%. Only 65% of Canadian economic immigrants are working at all, fewer than 30% as professionals.56 While the Canadian points system at that time thus admitted thousands

53 Supra n.45.

54 "Familial ties raise unauthorized and legal migrants’ hourly wages by an average of 2.6% and 8%, respectively, and friendship ties increase their wages by 5.4% and 3.6%, correspondingly. Furthermore, family ties seem to comparatively favor legal migrants in terms of earnings, raising their wages by approximately 0.9% more than for similar unauthorized migrants. These results underscore the potentially important role of social networks in raising Mexican migrants’ earnings, particularly among unauthorized migrants." Andrew Halpern-Manners, The Effect of Family Member Migration on Education and Work Among Nonmigrant Youth in Mexico, 48 DEMOGRAPHY 73 (2011).

55 (NYT 6/27/07)56 Lesleyanne Hawthorne, Labour Market Outcomes for Migrant Professionals: Canada and Australia Compared (CIC Canada Dec 06) www.cic.gc.ca/ENGLISH/resources/research/2006-canada-australia.asp . This blistering report on the Canadian points system from a former Australian immigration official was, with commendable honesty, commissioned by the Canadian government and placed by them on their web site. Would that immigration agencies in the US were so interested in the results of their policies and so willing to share their findings with the public. The Hawthorne report was available during the 2007 debates in the US but played no part in them.

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of engineers and physicians to Canadian unemployment, it was neither flexible nor efficient enough to obtain oil field workers for Alberta, who must be skilled, but do not typically have advanced degrees. As a result, such oil field workers, and other skilled workers without graduate degrees, are admitted to Canada as temporary workers, even though their jobs are in no sense temporary and even though this opens up possibilities for abuse of the worker.57 Republican obduracy in insisting on the adoption of a points system in the US is, obviously, the triumph of ideology over evidence. This Article will anatomize that ideology: it is envious of paper skills and blind to the more important indicia of economic success: ties, networks, family support, child care.

IV. The Economic Critique of Family Unification

So the data present us with a puzzle. Immigrants admitted because employers want them, or because they are well-educated, should, it would seem, logically do better economically than immigrants who gain admission simply because they are related to US residents. This would seem to be one of those assumptions that should just naturally be true, and it certainly sounds plausible to many people of good will who want nothing but what is best for the US economy. Yet the data instead suggest that the differences are not great between the economic performance of US migrants admitted under family sponsorship and US migrants admitted under employer sponsorship, while attempts to admit strictly for degrees omit an important dimension.

The critique of family unification visas is true tautologically under a human capital framework. Since the purpose of Parts V and VI will be to broaden or supplant such models, I feel I owe human capital models a decent introduction.

Legal readers are familiar with the basic outlines of human capital economics, though the concept-metaphor is normally introduced without any indication of how controversial it is within the labor economics profession.58 Human capital models originated to explain why individuals or societies invest in education. Instead of treating this as consumption, a human capital model treats it as an investment. If it is a rational investment, it must pay returns. In human capital models, individual earnings in labor markets are entirely explained as returns on each individual’s investments. “[T]he essence of human capital theory is that the job is unimportant.

57 Delphine Nakashe & Paula J. Kinoshita, The Canadian Temporary Foreign Worker Program: Do Short-Term Economic Needs Prevail over Human Rights Concerns? (May 2010) www.irpp.org. Canadian employers who need skilled labor now avoid the points system. In addition to getting workers admitted as temporary migrants, the employers also use provincial certification, which the US lacks. The Canadians have revised their points system since 2007, partly in response to these criticisms. For example, a new class, outside the points system, was created in 2010 for “Canadian experience” as temporary worker or student worker, which is a way of reintroducing the needs of employers. Arthur Sweetman & Casey Warman, A New Source of Immigration: The Canadian Experience Class, POLICY OPTIONS (July/August 2010) at 58.58 Edward P. Lazear, PERSONNEL ECONOMICS (1995), is an elegant demolition of human capital models of labor markets. Lazear, by the way, is the US’s most prominent neo-classical labor economist, who chaired the Council of Economic Advisers in the second administration of President George W. Bush. There is absolutely nothing left-wing about skepticism of human capital.

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Wages and wealth are determined by the individuals’ skills. Occupation and industry variables are secondary and almost an embarrassment to the theory.”59 Thus, the proposition that the migrant with advanced degrees should be expected to earn more than the migrant who lacks them is not an empirical question in a human capital model. It is tautologically true under the assumptions of the model. Since the data suggest otherwise, we need to broaden the assumption that economic success is entirely a function of degrees held.

Human capital models cannot explain migration. If we must model human capital as an asset, it is a peculiar one. Normally assets are worth more in markets in which supply is scarce. Human capital, by contrast, is worth more in markets in which supply is plentiful, and thus migrates from labor markets in which it is scarce, to labor markets in which it is plentiful, as this author has pointed out.60

V Economic Theory of Family Migration: Interpreting the Data Through Three Economic Theories

The reader undoubtedly has intuited that the economic case for family unification will involve treating the family (rather than the individual) as the unit of analysis; understanding the role of networks and personal ties in labor markets; and properly valuing unpaid labor. At the risk of belaboring what to some readers will be obvious, let me sketch some of the substantial economic literature on just these three points. These are well-established moves in economic analysis. They just haven’t been applied to understand the economic performance of migrants.

To make sense of the above data and explain why family migration is usually economically successful, we must add:A. Methodological individualism (neoclassical) should be supplemented or replaced by New Economics of Migration (discussed Part VA).B. Models in which immigrants necessarily substitute for domestic labor must largely be replaced by models of complementary labor (discussed Part VB).C. Family economics: Understanding the economics of unpaid intrafamily care and unpaid contributions to family businesses (discussed Part VC).

59 Lazear, supra n.58, at 78.60 Hyde, supra n.4, at 126. See Robert E. Lucas, On the Mechanics of Economic Development, 22 J. MONETARY ECON. 3, (1988). Life has dealt us excellent empirical demonstration of this point. Michael Clemens, The Roots of Global Wage Gaps: Evidence from Randomized Processing of US Visas (Center for Global Development Working Paper 212, June 2010)(internal personnel files of large Indian software development firm; employees who lose the H-1B lottery are assigned to the same team, working from India, and make one-sixth as much as their otherwise identical colleagues in the US). It could not be clearer that returns in a labor market with international migration reflect networks and institutions more than human capital as such. Human capital theorists normally explain all observed unequal treatment of workers as reflecting differences in “unobserved human capital.” In fact, I have argued that justifying unequal treatment is the most frequent function of human capital arguments in labor economics. The beauty of the Clemens paper is the completely random treatment of similar employees, an experiment that can rarely be performed in the real world.

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A. New Economics of Migration: Families are Economic Units

If one starts from the assumption that the only economic actors who matter, in migration or anything else, are individuals (methodological individualism), then it would seem uncontroversial that such isolates should be as skilled as possible. It would just be irrational to prefer an unskilled migrant over a skilled migrant. Such methodological individualism is normally a part of a human capital analysis. On this view, decisions whether or not to migrate are made by individual maximizers familiar from economic theory. They weigh the costs and benefits of migrating and migrate when the benefits outweigh the costs. Such models face an immediate embarrassment. They would seem to overpredict the amount of migration that we observe. Almost everyone in the world could substantially increase his or her earnings by moving to the US.61 Why don’t all these individual maximizers, maximize their way to the US or a similarly-developed economy?62

Much economic analysis of immigration by professional economists solves these problems within a framework styled family investment models or the “New Economics of Migration.”63 In this framework, the principal economic actors are families, sometimes communities, not individuals. Individuals normally live in the world with ties to others and it is only an economist’s coup de main that severs these. It turns out that this coup de main does not improve the analysis.

In the New Economics of Migration, households diversify investment, and protect against risk, by having family members work in different labor markets. The source of income matters lest the family be at risk when a shock to one labor market results in lost income for all family members.

While neither framework is without value, the New Economics certainly does a better job explaining the immigration that we observe. In a neoclassical model, individual maximizers perform cost-benefit analyses of staying or going. Since nearly everyone in the world would make more money in the US than at home, why don’t all these maximizers move? The model

61 In the Clemens study cited supra n.60, the programmers from India who win the random lottery for H-1B visas sextuple their earnings over the lottery losers who stay in India and do the same work on the same team.62 Borjas, supra n. 26[Heaven’s Door]: “Why do relatively few persons bother to migrate to the United States? Mainly because it is costly to immigrate. The costs include the expense of transporting the household across thousands of miles and looking for new employment, as well as the psychological burden of leaving family and friends behind and of becoming aliens in a strange land. As a result, the immigrants are typically the persons who have the most to gain from moving—because only those who gain the most would be willing to incur the substantial migration costs.” There is zero empirical support for this assertion. There is no literature suggesting that such costs of moving or transition are all that burdensome, or, properly discounted, outweigh the likely economic benefits of moving. These are not empirical findings. They do not rest on interviews with migrants or government data. They are formal requirements of a neoclassical methodological individualism.63 See, e.g., Oded Stark. THE MIGRATION OF LABOR (1991)(collecting papers); Oded Stark & David E. Bloom, The New Economics of Labor Migration, 75 AM.ECON.REV.PAPERS & PROCEEDINGS 173 (1985)(brief introduction); Oded Stark & Robert E.B. Lucas, Migration, Remittances, and the Family, 36 ECON.DEVEL.& CULTURAL CHANGE 465 (1988)(remittances modeled as long-term contract between migrant and family and covering education and decision to migrate; consistent with data from Botswana); Oded Stark & J. Edward Taylor, Relative Deprivation and International Migration, 26 DEMOGRAPHY 1 (1989)(Mexican families select for undocumented emigration individuals who will maximize household income; individuals who will do the best in Mexican labor market do not migrate).

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requires, as we have seen, an assumption, that individuals place enormous subjective costs on moving (or benefits to staying), just to get off the ground.64 The New Economics better explains observed migration, which so frequently involves young people traveling long distances and sending remittances home. The New Economics also better explains migration patterns from Mexico.65 Migrants do not come from the poorest regions of Mexico, individuals for whom migration would represent the greatest ratio of benefit to cost. They come from midsize towns and cities, where diversification is particularly rational.66

But if the New Economics understands migration as family diversification, how does it understand the family decision to reunite in a foreign land—seemingly the opposite of diversification? We will postpone this analysis until we get a few more economic tools onto the table, but, as we have already hinted, family unification, like emigration, is a rational family investment strategy, for example when it represents intrafamily division of complementary labor (one relative watches the others’ children), or similar division of labor in ethnic networks or communities. We will see that most economic behavior by immigrants, such as business formation and women’s labor force participation, is best modeled as the result of family investment decisions rather than decisions by individuals.

B. Immigrants Complement Rather Than Substitute for US Labor. Network models of labor markets vs. human capital models.

The analyst who demands that each individual migrant be individually skilled (possess high human capital) is necessarily assuming that the migrant is likely to replace a US worker doing the same job. Under this assumption, but only under this assumption, immigration policy must steadfastly ensure that the replacement have higher skills, not merely lower wages.

The assumption that immigrants typically replace (substitute for) native labor is another one of those assumptions that has been substantially exploded in the economic literature.67 It cannot explain the immigration that we observe, which so often exploits the gains from networks of complementary labor. The point is well established in the economic literature.

In a world of globalized communication technology, human capital theory cannot explain migration at all. We have noted that a software developer who wins the lottery for an H-1B visa—let’s call him Rajiv-- will make six times as much in California as his identically-educated coworker who works on the same team in India. Rajiv has the same human capital in San Jose as

64 Borjas, supra n.62.65 Stark & Taylor, supra n.63.66 Douglas S. Massey, Jorge Durand, & Nolan J. Malone. BEYOND SMOKE AND MIRRORS: MEXICAN IMMIGRATION IN AN ERA OF ECONOMIC INTEGRATION 66 (2002).67 Giovanni Peri, Immigrants’ Complementarities and Native Wages: Evidence from California, National Bureau of Economic Research Working Paper 1295 (March 2007)(immigration to California increases demand for complementary US work); Gianmarco I.P. Ottaviano & Giovanni Peri, Rethinking the Gains from Immigration: Theory and Evidence from the U.S., National Bureau of Economic Research Working Paper 11672 (September 2005)(US metropolitan areas with heavy immigration show increased average wages for native workers); Giovanni Peri & Chad Sparber, Task Specialization, Immigration and Wages, Centro Studi Luca D’Agliano Development Studies Working Paper 252 (June 2008)(as immigrants take jobs requiring physical labor, US workers take better, complementary jobs requiring communication skills).

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in Bangalore. The only point in bringing him from Bangalore to San Jose is that he will be more productive in San Jose, and that can only be because the proximity to other individuals on his team, in his firm, or across firm lines68 will make him more productive. Without those networks, his human capital, which we assume to be high, is worth no more in San Jose than in Bangalore. Inside those networks, his earnings will sextuple in the US.69 Obviously the migrant is not substituting for a native developer. (We might be more concerned that the poorly-paid developer in India, like other foreign labor to whom work is outsourced, substitutes for US labor). Rajiv is more valuable in San Jose because of his position in networks.

As noted, most professional labor economists understand that compensation in labor markets partly reflects institutional characteristics, not merely individuals’ human capital.70 I believe that I am the first to describe labor markets as networks, in what might not be a felicitous metaphor.71 The idea is to analogize labor markets to markets that economists have analyzed, such as the markets for communication technology, in which the value of an asset increases as the supply increases. In the classic aphorism, one telephone is an expensive paperweight.72 With two one can communicate, and the telephone is worth more with each user. Markets for information exhibit similar network effects: increasing returns to scale under which information becomes more valuable if shared.73 Similarly, as we have seen, high human capital workers maximize gains from that human capital by migrating from regions where it is scarce to regions where it is plentiful, at which point they compliment, not substitute for local labor. The use of the term “network” is only a metaphor, since in a labor market, unlike a market for information, the marginal cost of reproducing a unit never becomes zero.

However, it is a powerful metaphor. Understanding high-tech labor markets makes it clear that this industry, which heavily employs immigrant labor, hires for networks, not for human capital; for complementary, not replacement, labor. If Rajiv continues to work in information technology in California, he will, if he is like the median IT professional, work for his employer for six months.74 However, Rajiv will continue to be of value to his old employer even if he leaves after six months. His old employer’s patent applications will be much likelier to cite patents from the firms to which Rajiv moves.75 His old employer will call Rajiv for advice about problems they both face.76 His old employer may outsource work to Rajiv’s new 68 Cf. AnnaLee Saxenian, REGIONAL ADVANTAGE: CULTURE AND COMPETITION IN SILICON VALLEY AND ROUTE 128 (1994)(identifying Silicon Valley’s comparative advantage as the transmission of information across firm boundaries).69 Clemens, supra n.60.70 Lazear, supra n.5871 Hyde, supra n.4.72 Source?73 Carl Shapiro & Hal R. Varian, INFORMATION RULES: A STRATEGIC GUIDE TO THE NETWORK ECONOMY (1999).74 Bruce Fallick, Charles A. Fleischman, & James B. Rebitzer, Job Hopping in Silicon Valley: Some Evidence Concerning the Micro-foundations of a High Technology Cluster, 88 REV. ECON.& STAT. 472 (2006). We had assumed that Rajiv had been awarded an H-1B visa, issued for three years and renewable once. If Rajiv wishes to stay in the US, he will need the sponsorship of a US employer so will be constrained in his mobility during the period of the H-1B visa. 75 Rafael A. Corredoira & Lori Rosenkopf, Should Auld Acquaintance Be Forgot?: The Reverse Transfer of Knowledge through Mobility Ties, 31 STRATEGIC MGT J.159 (2010).76 Sim B. Sitkin, Secrecy in Organizations: Determinants of Secrecy Behavior among Engineers in Three Silicon Valley Semiconductor Firms. Ph.D. dissertation, Graduate School of Business, Stanford University (1986).

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employer or perhaps to Rajiv himself, perhaps if he returns to India and starts a firm to handle jobs outsourced from outside India.77 The economic importance of these, and other, channels of diffusing information across firm and national boundaries through employee mobility, explains the significant advantage in economic and technological growth that is achieved when jurisdictions forbid enforcement of covenants not to compete.78

Most observed immigration to the United States follows this pattern: the migrant’s skills complement, rather than substitute for, labor already being performed in the US. (We can be confident of this because, when US employers actually want to replace US workers with cheaper foreign labor, they do not embark on the expensive uncertainty of obtaining visas, often including the bizarre and cumbersome certification process of the US Department of Labor. Employers that want to replace US workers with cheaper foreign labor outsource work to foreign facilities or employers. This is done openly, notoriously, and completely without shame; it does not require certification from the US Department of Labor or the approval of any other governmental agency or labor union; and normally is rewarded in financial markets’ valuation of company shares).

In short, it is easy to misunderstand the economic contribution even of immigrants sponsored by employers. Their contribution often reflects their position in networks and ability to complement existing labor. So it will not be surprising to find exactly these overlooked mechanisms at work when visas are issued to family members, who arrive networked in the economy and almost never displace U.S. labor. In other words, were the U.S. to adopt some variant of the Canadian points system (something I do not recommend), issuing visas to applicants who amass points for degrees and work experience, it –in order to avoid having physicians drive cabs—would have to find a way of awarding points for ties and networks to the U.S economy. Instead, we achieve this result by awarding visas instead to family members.79

C. Family economics

77William R. Kerr, Ethnic Scientific Communities and International Technology Diffusion, 90 REV. ECON.& STAT.518 (2008).78 Sampsa Samila & Olav Sorenson, Noncompete Covenants: Incentives to Innovate or Impediments to Growth, 57 MGT.SCI. 425 (2011); Alan Hyde, Intellectual Property Justifications for Restricting Employee Mobility: A Critical Appraisal in Light of the Economic Evidence, in RESEARCH HANDBOOK ON THE LAW AND ECONOMICS OF LABOR AND EMPLOYMENT LAW 364-72 (Michael Wachter and Cynthia Estlund eds)(2012).

79 Carmenza Gallo & Thomas R. Bailey, Social Networks and Skill-Based Immigration Policy, in Duleep & Wunnava, supra n.46, at 203-17. They note four general types of information provided to immigrants by family and other informal social networks: 1. housing and other aspects of economic survival. 2. job recruitment: many jobs held by immigrants recruit entirely through networks, eg. nonunion construction, restaurants. 3. Skills: entrepreneurial; cooking; construction. 4. cultural information on how to deal with people. This Article will discuss others.

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By “family economics” in this Article I mean only that women should be counted, and that unpaid labor should be valued.80 In particular, women’s economic contributions often show up, not in her earnings, but in the earnings of another: her husband, children, a family firm. Most of the attention in feminist economics has gone to “unpaid domestic labor.”81 But women also perform “unpaid market labor”, for example in family businesses, which is conceptually distinct from “unpaid domestic labor.”82 Immigrants, as we shall see, are particularly likely to do both.83

VI. Applying the theories: three common economic activities by immigrants

The relatively similar economic performance of immigrants sponsored by relatives to those admitted for skills may now be explained. In almost every context, family migrants arrive networked; complement rather than substitute for domestic labor; take jobs that advance family investment rather than individual advancement; and may make economic contributions that are not paid as such but show up in increased earnings for family members or family businesses.

We will discuss three particularly common contexts for these observed economic results: immigrants who (A) care for children and other family members; (B) work in family businesses; or (C) support other family members who are in school or building family businesses. These are all “family investment” models. Immigrants who care for children, or build family businesses, function economically as part of a family, and seek to maximize family income or growth. They may be paid little or nothing, and thus their economic contribution will be systematically underestimated in snapshots limited to immigrants’ earned income in their first year after migration.

A. Caring for Children

Should Congress ever eliminate, as it nearly did in 2007, visas for parents, the immediate impact would be a radical decrease in the availability of child care for immigrant and native families. Working families in the US are heavily dependent on relatives for child care; Latina families are even more dependent; and immigrant families seem to be particularly heavy users of relatives for child care. Moreover, immigrants also disproportionately perform paid child care and thus contribute to increased earnings for working mothers.

80 Counting women may seem obvious but many is the study that follows normal social science practice by examining only men, e.g. Duleep & Regets, supra n.46. Counting women, and valuing unpaid work, are also associated with “feminist economics.” I have no objection to that term, but this Article does not make use of the more radical aspects of feminist economics, such as the critiques of objectivity and rationality, see [research handbook on feminist economics].81 Nancy Folbre, Children as Public Goods, 84 AM.ECON.REV.PAPERS & PROCEEDINGS 86 (1994)(reviewing theories of who pays for child care); special issue of FEMINIST ECONOMICS (1996) on valuing unpaid labor.

82 Lisa Philipps, Silent Partners: The Role of Unpaid Market Labor in Families, 14 FEMINIST ECON. 37 (2008); Barbara R. Rowe & Gong-Soog Hong, The Role of Wives in Family Businesses: The Paid and Unpaid Work of Women, 13 FAMILY BUS. REV. 1 (2000)(national survey of several thousand households; more wives work outside family businesses than in them; some do both).83 Kwang Chung Kim & Won Moo Hurh, The Burden of Double Roles: Korean Wives in the USA, 11 ETHNIC & RACIAL STUD. 151 (1988).

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The Government collects good data on who is caring for America’s children through several instruments: the Census; a special Early Childhood Program Participation Survey; and the Survey of Income and Program Participation. In addition, private groups, such as the Urban Institute, conduct their own research. All their findings are broadly similar and I will not discuss technical differences among the studies that might account for the relatively slight disagreements.

1. Working families rely heavily on relatives

For many working families, child care is grandma and nobody else. The US, unlike many European countries, does not routinely provide free public preschool education. Among all US children of pre-school age, 26.3% receive care exclusively from parents; 57.2% are in some kind of organized program; 22.6% receive care from other relatives; and only 11.6% receive any care from a nonrelative.84 When mother works and the child is pre-school aged, grandparents and organized programs are just about equal, each reaching about 30% of such children. When mothers work, fathers care for 25% (fewer than grandmothers), siblings for 3%, and other relatives 8%. 85 Nationally, close to half of all grandparents provide some child care assistance, averaging 23 hours per week.86

The Urban Institute recently looked in depth at child care arrangements among working families in Providence and Seattle. Sixty percent of the families in the survey contained an immigrant parent, but these families were broadly similar to the others in the survey. Two-thirds of these working families depended on family members for child care.87 Other countries of heavy immigration have similar experiences.88

2. Latina families depend on family members for child care even more than other working families

The Government’s surveys on child care arrangements do not specifically distinguish immigrant families. They do, however, break out Latina, African-American, and Asian families for separate analysis. Since Latinos in recent years have been the largest group of migrants to the US, we can use these surveys as a rather noisy look at immigrant families, particularly since, as we shall see momentarily, the surveys directed at immigrant families confirm the picture.89

84 Statistical Abstract of the US 2012, Table 578, at 370, http://www.census.gov/prod/2011pubs/12statab/socins.pdf. (Early Childhood Program Participation Survey). 85 Nearly Half of Preschoolers Receive Child Care from Relatives, US Census Bureau News Release February 28, 2008, http://www.census.gov/newsroom/releases/archives/children/cb08-31.html (Survey of Income and Program Participation). (Some children receive care from more than one source). 86 Lina Guzman, The Use of Grandparents as Child Care Providers, National Survey of Families and Households Working Paper 84(1998); Lina Guzman, Grandma and Grandpa Taking Care of the Kids: Patterns of Involvement (Child Trends Research Brief July 2004).87 Ajay Chaudry et al, CHILD CARE CHOICES OF LOW-INCOME WORKING FAMILIES 45(Urban Institute 2011)88 “Grandparents are the most popular form of childcare in Australia today.” Bridget Jenkins, Grandparent Childcare in Australia: A Literature Review, at 1 http://www.uws.edu.au/__data/assets/pdf_file/0009/156339/Jenkins.pdf89 Over half of the US foreign-born population was born in Latin America. Yesenia D. Acosta & G. Patricia de la Cruz, The Foreign Born from Latin America and the Caribbean 2010, American Community Survey Briefs,

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Latina families, for reasons on which there is no consensus, are particularly low users of formal child care programs, and particularly high users of family members for child care.

The survey of all preschool children reveals that Hispanic families are low users of formal programs and nonrelative care: 90

All preschool children Hispanic preschool childrenParents exclusively 26.3% 38.0%Other relatives 22.6 22.7Organized programs 57.2 43.4Nonrelatives 11.6 8.1

Similarly, the survey limited to preschool children of working mothers shows heavy Hispanic reliance on family members, less on formal programs:91

All preschool children Hispanic preschool childrenParents exclusively 24.8% 25.4%Grandparents 20.9 28.5Siblings and Other Relatives 6.3 13.1Day Care Centers 19.2 12.8

. Only among Hispanic families is child care by aunts and older sisters statistically significant; for white and Afro-American families such arrangements are rare. It is precisely such adult siblings who are the most frequent targets of proposals to trim family visas.92

September 2011, http://www.census.gov/prod/2011pubs/acsbr10-15.pdf90 Data on all preschool children (without regard to mother’s work status): Statistical Abstract of the United States 2012, at 370 (Table 578). http://www.census.gov/compendia/statab/2012/tables/12s0578.pdf

91 United States Census, Who’s Minding the Kids: Child Care Arrangements Spring 2010, Table 2A, Primary Child Care Arrangements of Preschoolers Under 5 Years Old Living With Employed Mothers by Selected Characteristics, http://www.census.gov/hhes/childcare/data/sipp/2010/tables.html92 It is not important for present purposes to pin down exactly why Latina families are such heavy users of family child care and low users of formal programs. Several theories compete in the literature. Latino cultural acceptance of family day care is greater than for non-Latinos. Lynet Uttal, Using Kin for Child Care: Embedment in the Socioeconomic Networks of Extended Families, 61 J.MARRIAGE & FAMILY 845 (1999). This cultural difference theory would seem to gain support from the finding that reliance on family members does not decline as Latino immigrant families become wealthier, more acculturated, or proficient in English. Nevertheless, these authors reject the cultural difference theory and are at pains to insist that Latino use of relatives mainly reflects the age and life-cycle position of the current Latino population of the US. Susan Blank and Ramon S. Torrecilha, Understanding the Living Arrangements of Latino Immigrants: A Life Course Approach, 32 INT’L MIGRATION REV. 3 (1998). Finally, it appears likely that Latino neighborhoods are underserved by formal programs. Andrew J. Fuligni & Allison Sidle Fuligni, Immigrant Families and the Educational Development of Their Children, in IMMIGRANT FAMILIES IN CONTEMPORARY SOCIETY 231, 242 (Jennifer E. Lansford, Kirby Deater-Deckard, & Marc H. Bornstein eds. 2007). The point is that, were fewer visas available for grandparents and adult siblings, working families generally, and Latina families in particular, would incur substantial costs. Mothers (and, to a lesser extent, fathers) would have to reduce their working hours, and income.

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3. Immigrant families, particularly Latina and Asian, are heavy users of family child care

The last US Census to ask respondents their country of birth was 2000. 93 While the Census web site does not make it easy to search only among families with a foreign-born member, a team of demographers at the Center for Social and Demographic Analysis SUNY Albany has helpfully done so for some data categories. They broke out, as “immigrant families,” families with at least one foreign-born parent. Children in immigrant families are significantly more likely to live with two parents: 84% of children in immigrant families vs. 76% of children in all-native families. 94 Children in immigrant families are two to four times more likely than children in native European-American families to have a grandparent in the home.95 And, among some immigrant groups, aunts and uncles living in the home is common: 25-37% of children in families with at least one parent from Mexico, Central America, Caribbean, South America, Philippines, Indochina, Pakistan, Bangladesh, Afghanistan, Iraq, or Africa. Again, it is precisely these elderly parents, and siblings (that is, aunts and uncles), who were targeted for elimination of visa eligibility in earlier legislative proposals. Immigrants are also low users of formal programs and concomitantly highly reliant on family members for child care.96 One working immigrant (ethnicity alas undisclosed), “Brianna, whose sister takes care of her daughter, assumed that her sister would be available purely on account of their relationship. When asked how they came to an agreement where her sister would watch her daughter, Brianna said, ‘We don’t agree. I just drop her off.’”97

Studies of the Asian immigrant population reveal the crucial role played by grandparents, especially grandmothers, in child care. “[M]any Asian-American elders moved to the United States to perform childcare tasks for daughters or daughters-in-law who work in a family business.”98 While by this author’s reckoning, 11% of grandparents nationwide care for 93 The 2010 Census did not ask about country of birth. Researchers must use the much smaller samples of the American Community Survey.94 Donald J. Hernandez, Nancy A. Denton, and Suzanne E. Macartney, Family Circumstances of Children in Immigrant Families: Looking to the Future of America, in IMMIGRANT FAMILIES IN CONTEMPORARY SOCIETY 9 (Jennifer E. Lansford, Kirby Deater-Deckard, & Marc H. Bornstein eds. 2007). 95 Hernandez et al, supra n.94, at 12.96 Peter D. Brandon, The Child Care Arrangements of Preschool-Age Children in Immigrant Families in the United States, 42 INT’L MIGRATION 65(2004)(low-income children of immigrants less likely to be in centers than low-income counterparts).97 Chaudry et al, supra n.87, at 72. Other scenarios are in Judith Treas & Shampa Mazumdar, Kinkeeping and Caregiving: Contributions of Older People in Immigrant Families, 35 J.COMP.FAMILY STUDIES 105 (2004); Judith Treas, Transnational Older Adults and Their Families, 57 FAMILY RELATIONS 468 (2008).98 Sung Min Yoon, The Characteristics and Needs of Asian-American Grandparent Caregivers: A Study of Chinese-American and Korean-American Grandparents in New York City, 44 J. GERONTOLOGICAL SOCIAL WORK 75, 87-88 (2005). “Another reason to think that family reunification is a net economic benefit is that older nonworking family members are often an inexpensive form of child care. In fact, there is a significant correlation between age at arrival and the presence of children under 18 in the household: an immigrant who arrived after age 55 on average lives in a household with 0.44 more children." Wei-Yin Hu, Elderly Immigrants on Welfare, 33 J. HUM.RESOURCES 711, 734 (1998). See also Seungsook Moon, Immigration and Mothering: Case Studies from Two Generations of Korean Immigrant Women, 17 GENDER AND SOCIETY 840 (2003); Wei Wei Da, Transnational Grandparenting: Child Care Arrangments Among Migrants from the People’s Republic of China to Australia, 4 J. INT'L MIGRATION & INTEGRATION 77 (2003). Recall that, in the scenario in which the immigrant grandparent is expected to care for the grandchildren and immigrates with authorization, the sponsoring parents must necessarily be U.S. citizens. Lawful permanent residents may sponsor for immigration only their spouses and unmarried children, INA Sec. 203(a)(2), 8

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grandchildren, the figure is three times that high for Asians.99 A survey of these grandparent caregivers revealed that the majority lived with one or both of the grandchild’s parents. Nearly all supplemented care by those parents but were not primary caregivers themselves. Just over half cared for two grandchildren. The most common pattern was for both parents to work in a family-owned small business and for grandparents to provide child care during the day when both parents work.100

So when a U.S. citizen family succeeds in getting a visa for the wife’s mother to come

care for the grandchildren—typically to enable the wife to move to full-time employment—all three of our alternative economic models are illustrated. The immigration decision represents a family investment. Grandma performs labor that complements the labor of US workers, and does not take a paying job from a US worker. And Grandma’s own labor is not compensated.

But how does this show up in the immigration statistics? Suppose for ease of illustration that the visa sponsors are naturalized immigrants from Colombia and that Abuela is a Colombian national. Abuela may never have finished high school. She arrives in the US on a much-maligned “family preference” visa. She is a “low-skilled” or “unskilled” migrant. She may not have been in the paid labor force in Colombia. She is definitely not in the paid labor force in the US. Her tax returns will show earned income of zero in the year she arrives in the US, and every year thereafter until she enrolls for Medicare. At this point, we may imagine that George Borjas sits up and says, see, I told you that today’s immigrants are lower quality than the immigrants of a generation ago.

But nothing could be further from the truth. Abuela is “unskilled” only because society does not value the skill of taking care of small children. She has earnings of zero because nobody pays her for this important skill. But, because Abuela is here, her daughter can earn more for the family. And Abuela is in no sense “taking a job from an American.” She performs classic complementary labor, except that hers is uncompensated.

4. Is child care by grandparents and other family members good for children and society?

We have tried to put a human face on three categories of family unification that have frequently been targeted for elimination: parents, siblings, and adult children of U.S. citizens. There can be no doubt that elimination of such visas would force hard-pressed working families to scramble for child care, and lead parents to reduce their working time, or devote more resources to child care.101 But would it be a good thing, on balance, to deny US families a visa

USC Sec. 1153(a)(2), and do not have access to the favored, uncapped “immediate relative” category, INA Sec. 201(b)(2)(A)(i), 8 USC Sec. 1151(b)(2)(A)(i).99 Yoon, supra n.98, at 80. As we have seen, there are varying estimates of the percentage of children nationwide who are in the care of grandparents, and the percentage of grandparents providing such care. People almost certainly give different meanings to being the “primary” caregiver, and the concept itself may not be meaningful in a multigenerational immigrant family.100 Yoon, supra n.98, at 83-88. 101 Indeed, eliminating such visas would also sharply reduce the availability of paid child care. Delia Furtado and Heinrich Hock, using Census data comparing metropolitan areas, demonstrate the close relationship among: percentage of immigrants in the workforce from five sending countries in which low-education immigrants

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for Abuela, if it increased immigrant participation in formal child care programs? Perhaps it is enough to say that our society has made no such value choice. Nor am I aware of any data showing any harm to children from being raised by relatives. All over the globe, involvement by grandmothers and other female relatives is correlated with higher survival and better outcomes for children.102 Examination of two studies of immigrant child rearing suggests that care by grandmothers, aunts, and big sisters may instead be highly functional, in ways scholars are only beginning to understand.

Consider, for example, the urban working poor households studied by Katherine S. Newman, each with members working in the fast food industry.103 She well describes the somewhat chaotic family life of an extended immigrant family from the Dominican Republic.104 At the beginning of the book, a teenager from this family had dropped out of school, left work, is married to a man who makes little, and in a difficult pregnancy. “Fortunately, Carmen was literally surrounded by her father’s kin, organized into four or five related households, all living on adjacent floors of the same building in Washington Heights. She did not have to worry about starving, and when her phone was cut off…she could use her aunt’s phone (as did all the other members of the family.)”105 And, at the end of the book, this is the only family to be poised on the edge of economic security. One aunt in Michigan calls to say that the factory where her husband works is hiring; some of her sisters join her; in their absence grandparents and older siblings care for the younger grandchildren.106

predominate; cost of paid child care; and labor force participation by college-educated women with at least one small child. Low Skilled Immigration and Work-Fertility Tradeoffs among High-Skilled US Natives, 100 AM.ECON.REV. PAPERS & PROCEEDINGS 224 (2010). To the surprise of no one to whom I have spoken, the relationship is a strong one. Metropolitan areas, with lots of immigrants without higher education, are areas where child care is available and college-educated women thus work after giving birth. (The five sending countries from which relatively low-skill labor predominates, so were used as a proxy for low-skill labor, were the Dominican Republic, Ecuador, Haiti, Mexico, and Portugal.) The relationship becomes even stronger in metropolitan areas in which men earn high wages. The authors interpret this as high men’s earnings’ permitting their wives to drop out of the workforce long enough to have children, but nevertheless hiring paid child care. Accord: Patricia Cortés & José Tessada, Low-Skilled Immigration and the Labor Supply of Highly-Skilled Women, 3 AM.ECON.J:APPLIED ECON. 88 (2011); Lidia Farré, Libertad González, & Francesc Ortega, Immigration, Family Responsibilities and the Labor Supply of Skilled Native Women, 11 B.E. J.ECON.ANAL.& POL’Y 1 (2011)(Spanish data). Obviously, understanding the economics of this relationship cannot be done simply by examining the earnings of the immigrant nanny. One must also consider the economic contribution now made by the female college graduate who can return to her career. That is the economic significance of complementary labor: its benefits may inure to someone other than the worker who performs it, and that individual may show the larger increase in earning.

102 Rebecca Sear & David Coall, How Much Does Family Matter? Cooperative Breeding and the Demographic Transition, 37 POPULATION & DEVEL. REV. 81 (2011). Immigrant groups bring this experience with them.103 NO SHAME IN MY GAME: THE WORKING POOR IN THE INNER CITY (1999). 104 “The sign on the door of Grandma’s apartment reads (in Spanish), ‘Child care available here. Person with experience.’ A thousand children seem to be in the living room already, but that is only because they are running around at such high speed that their numbers multiply before your very eyes. None of the kids are paying customers; all are cousins, children of Carmen’s many aunts and uncles who immigrated after the grandmother they have in common established herself in Inwood. They congregate at Grandma’s place because their mothers are out to work or to doctor’s appointments and because Grandma has that rare luxury, cable TV.” Newman, supra n.103, at 14-15. “Since the day Carmen arrived at the age of fourteen, she has hardly had a moment to herself….Eight adults and twelve children live together in the three apartments that connect through the fire doors.” Id. 15. Another dozen relatives live in the same building or next door.105 Newman, supra n.103, at 302.

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Consider also the so-called “Latino paradox”: Latin immigrants are much healthier than their incomes would suggest. An example is the potentially puzzling finding that rates of asthma among Latino immigrants in Chicago are sharply lower if they live in a community numerically dominated by Latino immigrants. The puzzle disappears when one remembers the crucial role of unpaid intrafamily or intracommunity care. Care of asthma requires family members to take the child outside; support the patient; share health information. Such unpaid intrafamily care may be the key to the entire “Latino paradox.”107

.

B. Working in family businesses: network economics; family investment model; complementary labor

Immigrants sponsored by family members are particularly likely to work in family businesses. They may or may not have reported income (unlike the unpaid child care worker). However, their reported individual earnings will undervalue their economic contribution, which will show up instead in the income of the business.108

Immigrants are particularly likely to found businesses, mostly small—twice as likely as similar native-born.109 This ability to found businesses depends on a supply of relatives. Family members support business formation by providing labor; pooling financial resources; pooling living arrangements; intrafamily loans; highly-productive labor despite low wages; “family labor can be trusted to handle sensitive transactions in which the risk of opportunism and malfeasance is high.”110 While English-language proficiency is normally positive for immigrant business formation, its advantage disappears for immigrants whose compatriots are geographically

106 Newman, supra n.103, at 302. This important study is a gentle corrective to Barbara Ehrenreich’s wonderful NICKEL AND DIMED: ON NOT GETTING BY IN AMERICA (2001), a book I have assigned for its brilliant analysis of the impossibility of economic survival as a house cleaner or salesperson at Wal-Mart. Ehrenreich shows that a single woman cannot survive economically in these jobs. Newman shows that only members of a family can, if they share, not only child care, but information about jobs and other expenses. 107 Kathleen A. Cagney et al, The Latino Paradox in a Neighborhood Context: The Case of Asthma and Respiratory Illnesses, 97 AM. J. PUB. HEALTH 919 (2007).108 Wives working in the family business may well not be paid. Philipps, supra n.82. They may not even consider themselves principals of the business. “[M]any Korean immigrant women who worked for their family stores did not officially report themselves [to the Census] as self-employed business owners.” Pyong Gap Min, ETHNIC SOLIDARITY FOR ECONOMIC SURVIVAL: KOREAN GREENGROCERS IN NEW YORK City 31 (2008).109 Vivek Wadhwa, AnnaLee Saxenian, & F. Daniel Siciliano, Then and Now: America’s New Immigrant Entrepreneurs, Part VII 2(Kauffman Foundation October 2012)(engineering and technology companies: 24.3 percent have an immigrant owner, but this figure has dropped from 25.3 percent in 2007); Fiscal Policy Institute, Immigrant Small Business Owners: A Significant and Growing Part of the Economy (June 2012)(18 percent of small business owners in the US are immigrants, exceeding the immigrant share of the population (13 percent) or labor force (16 percent). Immigrant ownership is particularly high in hospitality, where 43 percent of hotel and motel owners and 37 percent of restaurant owners are immigrants).

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concentrated: that is, immigrants who are not proficient in English may have the option of founding a business to serve the community whose language they speak.111 While a comprehensive picture of family business is not possible, ethnographies illustrate some of the ways that immigrant businesses benefit from visas for parents, siblings, and adult children.

Computer distribution in Los Angeles is completely dominated by family businesses of Chinese from Taiwan. New immigrants are integrated into the family business despite the fact that none had any contacts with computer distribution in Taiwan. 112 Koreans are similar in their ability to integrate adult siblings into business networks. Pyong Gap Min describes a Korean who immigrated in 1970 under employer sponsorship, worked for a jewelry company for three years, then started his own beauty supply store. After he naturalized, he and his wife sponsored all their siblings, seven in total, who arrived between 1978 and 1987. All seven newcomers were trained by their siblings to run beauty supply stores, extended loans by the first to arrive, and all seven established beauty supply stores within six months of arrival.113

Stories of this kind could be multiplied. What do they prove? The firmest point, but the narrowest, is, again, the critique of conventional accounting of whether immigrants are succeeding or failing. The conventional measure, earned income in the year after arrival, is plainly too narrow for a sector statistically prone to found new businesses that, like all new businesses, may struggle in the early years. Immigrants probably take out little in the way of salary—for example, wives may not be paid at all—in order to build the business. So our accounting for immigrant success may need adjusting.

For the larger question of immigration policy, however, the story may be ambiguous. There may not seem to be all that much policy difference between the Canadian professional immigrant who arrives without family or networks and thus drives a taxi in Vancouver, and the US counterpart who, by dint of family connections, opens a beauty supply store in the Bronx. Small businesses loom large in the national imaginary but one might question how important they should be in a development or immigration strategy, outside of high technology.114 While the many technology companies founded by immigrants from Asia have captured the imagination, I have never heard of one that was founded by an immigrant who arrived in the US as an adult on a family unification visa.115 Occasionally a technology company or its founder thereafter sponsors the founder’s family members for immigration, but this is rare.116 One 110 Jimy M. Sanders & Victor Nee, Immigrant self-employment: The Family as Social Capital and the Value of Human Capital, 61 AM.SOCIOLOG.REV. 231, 233 (1996).111 Maude Toussaint-Comeau, Do ethnic enclaves and networks promote immigrant self-employment?, FEDERAL RESERVE BANK OF CHICAGO ECONOMIC PERSPECTIVES (4Q/2008) at 30, 43.112 Yu Zhou, Inter-firm Linkages, Ethnic Networks, and Territorial Agglomeration: Chinese Computer Firms in Los Angeles, 75 PAPERS IN REGIONAL SCI. 265 (1996).113Min, supra n.105, at 35.114 Marianne Bertrand & Antoinette Schoar, The Role of Family in Family Firms, 20 J.ECON.PERSP. 73 (2006) (skeptical that family businesses are particularly outstanding economic performers).115 Most founders came to the U.S. on student visas. Vivek Wadhwa, Ben A. Rissing, AnnaLee Saxenian & Gary Gereffi, Education, Entrepreneurship and Immigration: America’s New Immigrant Entrepreneurs, Part II (June 2007) at 8. A smaller group immigrated as refugees (such as Andy Grove of Intel) or as children with their parents (such as Jerry Yang of Yahoo or Pierre Omidyar of eBay).116 The founders of Trend Micro Devices, a Silicon Valley manufacturer of antivirus products, sponsored the immigration of relatives from Taiwan to staff the company. Bernard P. Wong, THE CHINESE IN SILICON VALLEY: GLOBALIZATION, SOCIAL NETWORKS, AND ETHNIC IDENTITY 46, 90 (2006).

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cannot, in other words, argue that family unification visas contribute much to the founding or maintenance of technology companies. So is it a good deal for the US to admit parents and siblings of US citizens on the assumption that many will work in family businesses?

Comprehensive examination of immigrant small business as a justification for family unification visas lies well beyond available data and certainly beyond the scope of this paper. We are just beginning to understand the role of the immigrant-founded small business beyond the first generation. My Rutgers colleague Jamie Lew has studied Asian young people who drop out of high school in New York. The US economy is generally cruel to high-school dropouts. 117 Nevertheless, “Most of the Korean American high school dropouts worked in menial service jobs in the ethnic economy—working mostly for other Korean entrepreneurs as manicurists, cashiers, valet parking attendants, nightclub bouncers, and the like. With their ties to ethnic enclaves and immigrant networks, these jobs were relatively easy to secure.”118 I do not think we understand all the ways the economy benefits by giving visas to siblings and adult children who start such nail salons and restaurants, and we should probably think very hard before altering that system.119

C. Women working dead-end jobs while men build their careers or businesses: family investment model

A final family investment model was first described by Baker and Benjamin. Using Canadian data, they observed the following pattern. Immigrant women participated in the paid labor force at higher rates than native women, often in jobs offering little future growth, such as child care. Immigrant men, as in the U.S., start businesses at higher rates than similar native men. Baker and Benjamin described this as a kind of family investment model in which both wives and husbands seek to maximize household income. Wives support men while men invest in the future, perhaps by graduate education, perhaps by building a small business, in either case commanding low initial returns but larger potential.120 The authors show that this family investment model (akin to the New Economics of Immigration) better explains immigrant wage 117 Newman, supra n.103 [other cites on increasing wage differential for education].118 Jamie Lew, Asian American Youth in Poverty: Benefits and Limitations of Ethnic Networks in Postsecondary and Labor Force Options, 15 J. EDUC.FOR STUDENTS PLACED AT RISK 127, 138 (2010). Obviously it is best not to have to rely on an ethnic network, but, if one leaves school before graduating, it is much better to be in a network of immigrant small businesses than to be outside one.119 David Martin, at a presentation of an earlier version of this paper, noted the irony that Republican proposals to trim family visas are usually accompanied by proposals to create temporary visas for relatively unskilled jobs. It surely makes no sense, he observed, to create new temporary visas for jobs that could be filled by relatives of US citizens and lawful permanent residents.120 Michael Baker & Dwayne Benjamin, The Role of the Family in Immigrants’ Labor-Market Activity: An Evaluation of Alternative Explanations, 87 AM.ECON.REV. 705 (1997). An earlier family investment model is J.E. Long, The Effect of Americanization on Earnings: Some Evidence for Women, 88 J.POLIT.ECON. 620 (1980). George J. Borjas & Stephen G. Bronars, Immigration and the family, 9 J.LAB.ECON. 123 (1991) also assumes a family investment model in explaining why married immigrants make more money than single immigrants, though Borjas’s more recent work, as we have seen, does not, supra n.26.

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patterns than other economic models, for example neoclassical. A similar pattern has been noted for Australia.121 Like any family investment model, the economic contribution of the Baker-Benjamin model is underestimated when immigrant economic contribution (or “immigrant quality”) in evaluated by examining only earned income in the year of arrival.

Francine Blau and associates have shown that the Baker-Benjamin family investment model is not consistent with the overall picture of immigration to the US. It is true that immigrant women have high labor force participation, and, as we have seen, that immigrants disproportionately found businesses. However, for several reasons, it does not seem the best interepretation of the data generally, to understand women’s labor force participation as a family investment model. Women’s labor force participation seems to respond to opportunities. It is not very different from men’s labor force participation. Women and men immigrating to the US both invest in their own human capital. Women’s labor force participation increases with assimilation to the US; it is not a temporary measure while husbands invest in education or businesses.122

But if the Baker-Benjamin family investment model is not the best overall model of labor force participation by women immigrants to the US, the pattern that it describes is certainly part of the mix. It is not difficult to find examples of women in non-career jobs while men are in graduate school or building a business.123 Further research might disclose specific subgroups of the US immigrant population that display the Baker-Benjamin family investment model.124

CONCLUSION

121 Deborah A. Cobb-Clark & Marie D. Connolly, A Family Affair: The Labor Market Experience of Immigrant Spouses, 82 SOC. SCI. Q. 796 (2001)(Australian data: immigrants admitted for skills make more on entry but differences with family visas dissipate over time, largely because of greater labor by immigrant spouses).

122 Francine D. Blau, Lawrence M. Kahn, Joan Y. Moriarity, & Andre Portela Souza, The Role of the Family in Immigrants’ Labor-Market Activity: An Evaluation of Alternative Explanations: Comment, 93 AM.ECON.REV. 429 (2003); see also Francine D. Blau, Lawrence M. Kahn, & Kerry L. Papps, Gender, Source Country Characteristics, and Labor Market Assimilation Among Immigrants, 93 REV. ECON.STAT. 43 (2011). The reasons for the different results in Canada and the US are not clear. Blau et al speculate that there may be technical issues with cohort effects and observations, or with comparing Canadian to US data. Another explanation offered by Blau et al is that immigrant marriages are more fragile in the US than Canada, and thus women immigrants may respond by investing more in their own human capital.

123 It is suggestive that adult immigrants are more likely to be enrolled in school, and at older ages, than natives. Harriett Orcutt Duleep & Mark C. Regets, Immigrants and Human-Capital Investment, 89 AM ECON REV PAPERS & PROCEEDINGS186 (1999).

124 The ten groups with the highest rate of small business ownership are Greece (16 percent of the Greek-born labor force are small business owners), what the Census terms “Israel/Palestine” (13 percent), Syria (12 percent), Iran (12 percent), Lebanon (11 percent), Jordan (11 percent), Italy (10 percent), Korea (10 percent), South Africa (9 percent), and Ireland (8 percent). After the top 10, the next three countries on the list are Iraq, Pakistan, and Turkey. Fiscal Policy Institute, supra n.109, at 15. Obviously these are mostly countries with relatively small numbers of immigrants in recent years.

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Of course the US benefits economically when its doors are open to those who promise unusual creativity or entrepreneurial success. As mentioned, the first priority in increasing such skilled migration should award permanent residence, not just nonimmigrant work visas, to those who come to the US for postdoctoral work.125 The US could also experiment, if it likes, with some version of the Canadian points system for those who have accumulated degrees and experience in their own countries, although for reasons suggested in this Article, such a points system should include points for US experience, employer sponsorship, US family, and other indicia of network connections in the US economy.

But neither these, nor other programs that one might imagine to encourage migration of skilled workers, should come at the expense of existing visas for family unification. In particular, the ability of US citizens to petition for their parents, siblings, and adult children, is probably a very good deal for the US. Conclusions must be tentative, given the limited data that actually compares immigrant economic performance by visa type at admission. We have attempted to draw plausible inferences from other data sets. The picture cannot be definitive, and more study has been suggested.

Some things are clear. If visas for parents of US citizens were eliminated or trimmed, many working families would scramble for child care. Mothers would trim or eliminate their work hours, whether inside or outside a family business. The bodega or greengrocer would not be able to stay open as late, eliminating its chief comparative advantage over the supermarket.

It is harder to form a complete economic picture of immigrant siblings of US citizens. However, we know that these aunts are a statistically significant source of child care in Latina families. Indeed, under a family investment model, it may be rational for the most recently-arrived aunt to watch all the children while her sisters, better networked and more proficient in English, are in the paid labor force. We also know that siblings are particularly likely to work in family businesses.

Overall, then, it appears that the US is well-served by family unification. Our search for the skilled and talented should not blind us to the crucial kind of economic growth that comes when children are well cared-for and educated; their health needs observed and attended; when family businesses employ family members and obviate their demand for social services; when family members pool earned income while one builds a small business. This kind of economic growth can be observed, with our eyes of course, but in diffuse statistics on the new economics of migration; complementary labor; employment in networks; and the economics of unpaid work and care. Economic statistics that don’t observe this economy will underestimate the economic value to the US of its policies on family unification. We should hesitate before changing policies that have served us so well.

125 Hunt, supra n.5.

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