March 24, 2013
Mexican Immigration to the United States
Mexican Immigration to the United States—Posner
Becker is unquestionably correct that economic factors provide the principal explanation for the sharp drop in Mexican immigration in the last four years. Either higher unemployment in the United States or lower unemployment in Mexico would tend to reduce Mexican immigration to the United States, and the combination of both trends in recent years has made the fall in immigration steeper than it would have been had one but not both forces been at work. The unemployment rate is still almost 8 percent in the United States but it has fallen to 5 percent in Mexico.
Although the decline in Mexican immigration is a good illustration of the economics of immigration, its significance for both the United States and Mexico probably is small. The United States attracts more immigrants than any other country in the world, and if it wants to offset the decline in Mexican immigration with an increase in immigration from other countries (including other Central American countries), it can do so effortlessly. How many Mexicans live in the United States rather than in Mexico probably has little effect on Mexico either, since Mexicans living in the United States remit large amounts of money to their relatives in Mexico.
Just as financial capital moves more or less effortlessly across national borders in search of higher returns, human capital as well is increasingly mobile. The ability of Mexicans to work on either side of the U.S.-Mexican border benefits both the United States and Mexico. Immigration reform now being discussed in Congress will if enacted reduce barriers to the international movement of human capital even further, and can therefore be compared to the successful post-World War II movement for the reduction of tariff barriers to international trade.
The diminution in Mexican immigration to the United States has greater political than economic significance. It has reduced the hostility to immigrants, a hostility that played a role in the licking that the Republican Party took in last November's national elections, and by reducing that hostility facilitates immigration reform.
I do not think we should return to the era, which ended in about 1920, of unrestricted immigration to the United States. What has changed since then is that the country is considerably more crowded, and with an existing population in excess of $300 million additional population contributes to pollution, water shortages, extinctions, other environmental harms, infrastructure costs, and traffic congestion. In addition, the expansion in public benefits in recent decades can attract immigrants from very poor countries who have little prospect of gainful employment. So immigration has to be regulated. But so for that matter so does international trade in products, services, and financial capital. The goal of U.S. immigration policy should not be to discourage or encourage immigration, but to admit as immigrants (besides refugees and family members) only persons who have good prospects for making a net contribution to the U.S. economy.
Because of the difficulty of policing our long border with Mexico effectively, our large population of illegal immigrants is largely Mexican. Illegal immigration drives many Americans crazy, although I'm not clear why. Most illegal immigrants are productive workers and receive few public benefits. Their expulsion is neither feasiible nor (because illegal immigrants are a significant part of the U.S. labor force) desirable from an economic standpoint. The diminution in Mexican immigration should make it easier to obtain meaningful reform of our immigration policies.
The Decline in Illegal Immigration From Mexico-Becker
Net illegal immigration from Mexico to the United States has been essentially zero and perhaps even negative, during the past few years. Is this entirely due to depressed labor markets in the US and tougher border policing, or have longer run forces also been at work? The answer is that fundamental changes in Mexico have contributed to the immigration slowdown, and these changes will continue into the future. As a result, the highly controversial American political issue of what to do about illegal immigration should become much less important in the future.
Immigration theory divides the factors determining immigration into "push" and "pull" forces. Push forces refer to conditions in the countries where immigrants come from, such as low incomes, high levels of unemployment, restricted opportunities for children, and religious, racial, and other forms of discrimination that make living there unattractive. Pull forces refer to opportunities in receiving countries, such as good earnings, jobs, and opportunities for children. Individuals migrate when the combination of push and pull forces make the expected gains from moving large enough to overcome the substantial difficulties of moving, including separation from parents, siblings, and even spouses for prolonged periods.
In all major immigration episodes, younger adults do most of the moving since they are less tied down by family responsibilities, and are more willing to take on the various risks involved in moving to another country. For many years, the net gain from moving to the US has been very high to young Mexicans with modest skills and education. The main reason has been much lower incomes in Mexico, even for persons with jobs, and jobs were more available in America since Mexico has had highly restricted labor markets. These forces encouraged millions of younger Mexicans to endure the uncertainties and costs of crossing the border illegally.
The Great Recession put a temporary end to easy availability of jobs in the United States since at the height of the recession the unemployment rate of low-skilled workers ballooned to about 16 percent. The difficulties of finding good jobs even encouraged some illegal immigrants to return to Mexico. That, along with tighter border patrols, greatly reduced the number of illegal border crossings.
Once the American economy resumes its long-term growth path with full employment (it has not been on this path for the past 4 years), the economic pull from the US should return to where it had been before the economic crisis. However, the push from Mexico has been decreasing and should continue its downward path for the foreseeable future. One important cause is the sharp decline in Mexican birth rates during the past couple of decades. Not long ago Mexico was a country with high birth rates that produced many young adults who had trouble finding jobs. Now, the Mexican total fertility rate (TFR)- the number of children born to a typical woman over her lifetime- has plummeted to about 2.25. This rate is only a little above the population replacement rate of 2.1. Unlike in the past, the number of young people in Mexico will no longer be growing rapidly over time, so that the numbers looking for work in the Mexican labor market will be on the decline.
The push from Mexico has also diminished because its economy has been growing at a good clip during the past 9 years. Excluding the large drop in 2009, the growth rate in real GDP has been over 4% per year. Mexico's growth rate after 2009 considerably exceeds the American rate of under 2%, which is remarkable since about 80% of all Mexican exports go to the depressed American economy. One consequence is that the gap between earnings in Mexico and the United States is narrowing. This clearly reduces the demand to immigrate to America, especially under the difficult circumstances illegal immigrants face.
The US must find a way to offer a path to citizenship for the millions of illegal immigrants in the country. I have suggested elsewhere ("The Challenge of Immigration: A Radical Solution", IEA, 2011) that the best approach is to sell the right to immigrate. Since illegal, as well as legal, immigrants could buy this right, such an approach would help solve the problem of illegal immigration.
But even if no new policies are adopted to reduce the flow of illegal immigrants, the number of new immigrants from Mexico will not return to pre-recession levels because economic opportunities are rising in Mexico, and there will be fewer young Mexicans who need to find jobs.