Francesco Fasani IAE-CSIC, Barcelona GSE, MOVE-INSIDE and CReAM

9th Barcelona GSE "Trobada“ IAE-CCSIC; October 21th, 2011

Migration policy and voters’ attitudes

Trade and migration   As economists, we believe in the existence of gains from trade and gains

from factor mobility   Paradox: in the last century, developed countries have progressively

opened to trade (and capital) flows and closed to immigration inflows (Hatton & Williamson, 2006; Mayda, 2008)

  Why free international trade and capital mobility and restrictive migration policies?

Source: Richard Freeman (2006) - Period: early 2000’s

Immigrants are not very popular...

Free markets Vs Immigration

PEW global attitude report (2007)

International trade Vs Immigration

PEW global attitude report (2007)

Explaining hostility towards immigrants   A non-economist view: “We wanted workers, and we got people”, Max

Frisch

  Economists’ explanations: 1.  (perceived) labor market competition

Scheve and Slaughter, 2001; Mayda, 2006; Facchini & Mayda, 2009 & 2011; Ortega & Polavieja,

2.  (perceived) fiscal impact Wellisch & Walz, 1998; Hanson, Scheve and Slaughter, 2007; Facchini & Mayda 2009 & 2011

3.  cultural-social issues / preserving identity Card, Dustmann & Preston 2005; Dustmann & Preston 2007

Migration: perceptions and reality

ESS-1 2002

An easy prediction...   Higher unemployment rates and fiscal austerity will exacerbate the

concern about labour market competition and about the fiscal burden caused by immigrants (and about crime)

  Will governments opt for more restrictive migration policies?

  Substantive restrictive policies (stricter legislation and enforcement) or formal ones (stricter legislation without sufficient enforcement)?

  Governments may have mixed incentives in enforcing their migration policy: pleasing the electorate Vs providing workers to the economy   Restrictive polices are costly and undocumented immigrants are not

necessarily bad...

1) Restrictive policies are costly

  Total estimated cost of deporting 10 million of undocumented immigrants from the US: $206 billion over five years ($22 thousand per deportation) (Goyle & Jaeger, 2005)

  “…unless we hire the illegal immigrants to do it. Then it would cost us a tenth of the normal price." (Jay Leno, The Tonight Show , 2005)

2) Undocumented immigrants are not that bad...

  Illegal migration is an efficient screening device for low-skilled immigration (ex-post selection): motivation and ability are more important than qualifications (Hanson, 2010)

  Undocumented immigrants are highly mobile and responsive to labour demand changes: “...there is little evidence that legal immigration is economically preferable to illegal immigration. In fact, illegal immigration responds to market forces in ways that legal immigration does not...” (Hanson, 2007)

  They are less visible for the electorate (Facchini & Testa, 2010)   Easier to limit their rights (e.g. access to welfare, family reunification,

citizenship, vote, etc.)   They are “disposable”: “They don’t need much. They wouldn’t know what to

do with good wages. Why, look how they live. Why, look what they eat. And if they get funny – deport them” J.Steinbeck, The Grapes of Wrath (1939)

Formally restrictive policies   Evidence of inconsistent behaviour: enforcement which selectively

reacts to labour market demand (US: Hanson & Spilimbergo, 2001; Italy: Fasani, 2010)

But restrictive policies...   Limiting labour market access and worsening living

conditions may (possibly) discourage new inflows,   but it surely makes life harder for immigrants, possibly

inducing more criminal behaviour   Some empirical evidence:

 UK: asylum seekers (no access to legal labour market; “dispersed” by the government) Vs A8 immigrants (free access to labour market; free mobility) (Bell, Fasani and Machin, 2010)

  Italy: lack of legal status may increase incentives to commit crime (Mastrobuoni & Pinotti, 2011)

 Will voters call for even more restrictive policies?

Undocumented immigrants in Spain

Estimates by J. Fernández-Huertas Moraga