In June, Representative Mo Brooks took the opportunity to model constructive and reasoned disagreement in his responsetoan article in which I criticized his and Senator Jeff Sessions stances on immigration. On Labor Day, Senator Sessions claimed that unemployment and labor force participation statistics make the case for continuing American restrictions on low-skill immigration. With Congress set to take this up again next week, its a good time to reexamine the evidence. Unfortunately, there is still more fear than fact in the case for restricting immigration.
The most credible evidence published in scholarly economics journals suggests that immigrants are either a net benefit (the optimistic case) or essentially a wash (the pessimistic case) for the American economy. In a 2011 paper for the Center for Global Development that was ultimately published in the Journal of Economic Perspectives, Michael Clemens summarized the literature on immigration. He referred to the potential benefits of more open borders as trillion-dollar bills on the sidewalk and pointed out that the estimated gains [from dropping barriers to labor mobility] are often in the range of 50-150% of world GDP. The World Bank reported that World GDP in 2011 was about $70 trillion, which means dropping barriers to labor mobility could increase the size of the world economy by $35-$105 trillion dollars. Thats a lot of new wealth in the pockets of American residents and our potential foreign customers.
Here is Clemenss summary of the most credible evidence on immigrations effects:
[A]ll serious economic studies of the aggregate fiscal effects of immigration have found them to be very small overallsmall and positive at the federal level...small and negative at the state and local level. He continues: In historical cases of large reductions in barriers to labor mobility between high-income and low-income populations or regions, those with high wages have not experienced a large decline. Again, there is some evidence that wages fall slightly for people at the top and bottom of the skill distribution, but the long-run effect on native wages overall is either zero or positive.
Art Carden is a Research Fellow at the Independent Institute in Oakland, California and an Associate Professor of Economics at Samford Universitys Brock School of Business.