July 10, 2011
Immigration from Mexico
The Decline in Immigration from Mexico: What It Means for the United States—Posner
In 2008 there were believed to be 7.03 million unauthorized Mexican immigrants in the United States, and by 2010 that number had fallen to 6.64 million, a drop of 390,000—6.64 percent. (I am dubious that these statistics are accurate, but doubtless there has been a significant decline in illegal Mexican immigration.) There are three possible reasons for the decline: reduction in employment opportunities in the United States, as a consequence of the severe economic downturn, involving heavy unemployment, that began with the financial crisis of September 2008; increased efforts at border control and apprehension of illegal immigrants to prevent unauthorized immigration, especially from Mexico (which is believed to be the source of nearly 60 percent of all illegal immigration to the United States); and improved employment opportunities in Mexico. The first two factors are probably the most important—especially the first. Many unauthorized Mexican immigrants were employed in the construction industry, and the economic downturn caused a tremendous surge of unemployment in that industry—a layoff of something like 600,000 construction workers, in all. But the second factor has a played a role. There has been toughened border enforcement, which has pushed up smugglers' fees, which are paid for by the unauthorized immigrants; and so an increase in those fees discourages immigration.
I attach less weight to the third factor—Mexico's improved economic situation—because the improvement of the Mexican economy has been a gradual process, beginning in the 1990s. Mexico's per capita GDP is still a third lower than that of the United States. Approximately 18 percent of Mexicans live in extreme povery, and another 47 percent in less extreme poverty, so that a total of 65 percent of the Mexican population is poor. And Mexico has a total population of 113 million. So there is an enormous pool of potential immigrants to the United States, where wages are much higher than in Mexico.
The growing hostility to Mexican immigrants (and to immigrants in general) is understandable, though ill informed. It mainly results from the belief that immigrants "take away" jobs from Americans; a more precise formulation would be that an increase in the supply of labor, if more than proportionte to an increase in demand, will push down wages; and American workers who refuse to accept a reduction in their wages will lose their jobs to immigrants. In addition, immigrants place pressure on U.S. public services, such as public schools and emergency rooms, though unlawful immigrants are not entitled to Medicare or social security, or to many other public benefits.
Unemployment in the United States is very high, and rising, but it is doubtful that restricting immigration would have a positive effect. Immigrant workers spend much of their income in the United States (some of it, however, they remit to relatives in their country of origin), and so increase demand for goods and services, and indirectly employment; and by reducing wage levels they reduce the cost of goods and services, a reduction that also stimulates consumption and hence production and employment, although the net effect on the economy must be small—there are not that many illegal Mexican immigrants. Weakness in consumption is a major factor in the nation's current economic weakness, however, and there is no good reason to weaken it further by expelling or preventing entry of worker-consumers. And efforts to curtail illegal immigration are costly, without doing much for employment. Probably, therefore, restricting immigration is not a sensible policy from the standpoint of stimulating the U.S. economy. A better policy would be to increase the lawful Mexican immigration quota, since lawful immigrants are likely to be more productive workers with better educational backgrounds and to place less strain on U.S. public services.
Will Large-Scale Illegal Immigration from Mexico Come to an End? Becker
Illegal immigration into the United States, Western Europe, Japan, and other rich countries grew rapidly from about 1990 to the beginning of the financial crisis, and has sharply declined since then. The largest number of illegal immigrants enter the United States, especially from Mexico, but the number of Mexicans crossing the border illegally has apparently slowed to a trickle during the past several years. Some observers have attributed much of the decline from Mexico to tightened border security, stricter search laws against illegal immigrants enacted by Arizona and some other border-states, and greater enforcement against employers who use illegal immigrants. These are part of the explanation, but the main factors are economic and demographic, and some of these are likely to be permanent.
The great majority of immigrants all over the world, both legal and illegal, move for economic reasons: to find jobs that pay a lot more than they can earn in their origin countries. For example, the average illegal immigrant in the United States from Mexico appears to earn about three to four times what he would earn in Mexico. This is why virtually all the illegal (and legal) immigration is from poorer to richer countries. Immigration increases when poorer countries are hit by recessions and financial crises, and by internal conflicts that make life there dangerous and more uncertain.
Illegal immigration is especially sensitive to recessions and other causes of weak job markets in richer destination countries. Illegal immigrants are usually the first to be laid off partly because they tend to be unskilled, and unskilled employees are let go in much larger numbers than are skilled employees. In addition, illegal immigrants tend to have low seniority since they are young, and employees with lower seniority are generally fired first when bad times hit.
Laid off illegal immigrants usually do not qualify for unemployment compensation, and other safety net benefits. This is why many illegal immigrants return home after losing their jobs, even though that means they must bear the costs and risks of possible future illegal entry. It also explains why the flow of illegal immigrants to the United States has slowed to a trickle, given the sharp and sustained rise in American unemployment, especially among younger and unskilled workers.
High unemployment in the United States is presumably only temporary, although it has already persisted for several years. Other more permanent factors have also been reducing the flow of illegal immigrants from Mexico. One important long-term force is the sharp decline in birth rates in Mexico during the past 30 years. The total fertility rate- that is, the number of children born to the average women over her lifetime- has declined in Mexico from almost 7 children in 1970 to over 3 children in 1990, and to only about 2 children at present. This means that Mexican fertility is now not any higher than American fertility, even though Mexico is much poorer.
The very high fertility rates in Mexico in the 1970s and 1980s produced many young Mexicans in the 2000s. This is an important determinant of why illegal immigration from Mexico peaked during 2000-2006 since most illegal immigrants are young. They can more easily bear the hardships and risks of crossing illegally into the United States, and they can look forward to higher earnings for a longer time. Moreover, high Mexican fertility rates in say 1980 produced many Mexican workers in their twenties after the year 2000, which put downward pressure on their earnings and job prospects.
Outmigration from poorer countries like Mexico, especially of illegal immigrants, tends to fall rather sharply when job availability and incomes in their countries are improving at a good pace. This has been happening in Mexico for the past 15 years. The growth in real per capita Mexican incomes since 2000 has raised Mexico's per capita income by about 40%. Job markets have become a little more open as well, and average years of schooling have increased significantly, so that better paying jobs are much more readily available in Mexico.
Most immigrants, especially illegal immigrants, prefer not to leave if economic prospects are reasonably good in their own countries, even if their earnings would be considerably higher in richer countries. Individuals and young families prefer to stay with their parents, siblings, and friends, and with a culture they grew up with rather than becoming strangers in countries with different cultures. This is especially true for persons who would have to migrate illegally from Mexico since they bear the physical and other risks of crossing the Mexican-US border, have difficulty returning to see their families and friends, and they can be sent back at if apprehended.
Low birth rates and hopefully also growing incomes are likely to be part of the Mexican landscape for a long time. These forces should greatly reduce the long-run flow of illegal immigrants to the US after the American economy recovers from the financial crisis, and even without stepped up apprehension of illegal immigrants. Mexicans who would like to immigrate to US could better afford to wait for visas and other permits to cross the border legally since they now have decent economic prospects while in Mexico.
I argued before on these pages that immigration, especially legal immigration, is good for a country like the US that has many opportunities for ambitious and hard-working men and women. The US should respond to the economic progress and fertility declines in Mexico, elsewhere in Latin America, and also in Asia by expanding greatly the number of legal immigrants accepted (see my monograph The Challenge of Immigration, 2011 for a proposal to sell openly the right to immigrate). Expansion of legal immigration would be good for America, and it would also further cut down the number of illegal immigrants by enabling more of them to come legally and gain the many advantages of legal status.