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Chapter 10
Worker Mobility: Migration, Immigration, and Turnover
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Table 10.1: Immigrants as a Percentage of the Labor Force, Selected Countries, 2002
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Introduction
• Determinants of worker mobility
• U.S. immigration history
• Characteristics of Mexican immigrants to
the U.S.
• The impact of immigrants on the U.S.
economy
• The immigration controversy
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Characteristics of Movers
• Age is the most important determinant of who migrates
• Within age groups, the more education, the more likely one is to migrate
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Table 10.2: U.S. Migration Rates for People Age 30-34, by Educational Level,
2005 (in percentages)
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Determinants of Worker Mobility
A worker will migrate if the PV of the net benefit is greater than the cost of the move. Costs and benefits will depend on:
• Push and pull factors: Employment conditions in sending and receiving place
• Distance of move - moving, information, and psychic costs
• For international migration, the distribution of earnings in sending and receiving countries. Positive vs. negative selection.
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International Migration and Earnings
Immigrants Earn Less Than Natives On Arrival
The Earnings of Immigrants Rise Quickly
Recent Immigrants Are Unlikely to Achieve Wage Parity With Natives
Migration Investment Yields a Large Monetary Pay-Off for Most Immigrants
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Figure 10.1: Male Immigrant Earnings Relative to Those of the
Native-Born with Similar Labor-Market Experience, by Immigrant Cohort
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U.S. Immigration History
• Immigration was relatively unrestricted until Congress passed the Immigration Act in
1924, which stipulated quotas based on national origin
• In 1965, the Immigration and Nationality Act abolished quotas and made family unification the major criteria for immigration
• Currently, U.S. policy toward illegal immigrants is embodied in IRCA of 1986 and
border enforcement initiatives
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Table 10.3: Officially Recorded Immigration: 1901 to 2006
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A Profile of U.S. Immigration
• Almost 80 % of immigrants come from Latin America or Asia
• In 2005, there were an estimated 41.9 million hispanics in the U.S, of which 16.8 million were foreign-born
• Almost 1/3 of all foreign-born and 2/3s, or 10.9 million, of the foreign-born hispanics were of Mexican origin
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A Profile of U.S. Immigration
• Immigrants tend to settle in “gateway” states
• Immigrants are more likely than natives to have low levels of education
• Immigrants are more likely than natives to be in low wage occupations, but the
immigrants’ wages grow more rapidly
• Immigrants are more likely than natives to receive welfare benefits
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Mexican Immigration
• The Bracero Program brought 5 million Mexicans to the U.S. between 1942 and 1964
• The intent of the program was to alleviate U.S. agricultural labor shortages during
WW11
• Illegal immigration to the U.S. accelerated after the end of the Bracero Program
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Mexican Immigration
• Estimated annual illegal Mexican immigration has risen from 200k in the 1980s to 300k today
• There are an estimated 11-12 million illegal immigrants in the U.S., half or more who are thought to be from Mexico
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Mexican Immigration
• Differences in human capital account for most of the large wage gap between native workers and Mexican-born workers
Annual wage comparsion
Native workers - $45,400Non Mexican Immigrants - 37,000Mexican Immigrants - 22,300
• Mexican-born workers are concentrated in a few low skill, low wage occupations
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What are the positive effects of immigration?
• Effect on consumer prices
• Effect on business profits
• Effect on demand for goods and services
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What are the negative effects of immigration?
• Wage effects - Negative impact is largest on low-skill natives and previous immigrants.
• Income distribution effects - Immigration may be a factor in the increase in income
inequality in the U.S.
• Fiscal effects - Immigration may increase the fiscal burden of state and local governments
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Figure 10.2: Demand and Supply of Rough Laborers
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Are Gains from Immigration Greater than Losses?
Most economists conclude that the overall impact of immigration on the U.S. economy is small, but positive
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What Is The Impact On Mexico?
Benefits
• Absorbs surplus labor
• Remittances are an important source of income for families and foreign exchange for the nation
• Immigration provides a political safety valve
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What Is The Impact On Mexico?
Costs
• Loss of millions of young and ambitious workers
• Tensions with the U.S.
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If The Net Economic Effects Are Positive For The U.S.,What’s The Problem?
• Illegal immigrants and employers are breaking the law
• National security - Porous border increases the terrorist threat
• Impact on native workers wages and jobs
• Problems with assimilation of poorly-educated and low-income hispanics
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Alternative Solutions - Enforcement Only
• Build a border fence and strengthen human and non human border surveillance
• Tighten employer hiring practices and sanctions
• No legalization (amnesty)
• Guest worker program (maybe)
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Alternative Solutions - Legalization and Guest Worker Programs
• Path to citizenship for some illegals
• Guest worker program
• Tighten employer hiring practices and sanctions