Should the United States
Allow More Immigration?
Jack Britton
Econ 428
November 15, 2007
Professor Horlacher
Outline
• Should we or should we not allow more
immigration?
• Positives and negatives
• Two policy reform options
• The effects of Illegal Immigration
• Conclusion
The Big Question
• Should we combat or liberalize
immigration?
– The issue has been a political one
– The answer lies in economics
Overview of the Two Sides
• The first, usually addressed by the political
Right, is that allowing more individuals into
the country will increase the number of
people who are overly dependent on US
taxpayer funded programs and services
• The second, addressed by the political Left,
argues that it is not fair to prohibit
immigrants because America itself is a
nation of immigrants that prides itself on its
diversity of citizens
Allowing more people would be
beneficial to the economy?
• The fiscal impact of immigration in the US
has a substantially greater positive effect
than negative on the US economy
• Increasing Immigration:
– Main reason for population increase in America;
current citizens fertility is dropping
– Help spread the costs of public goods, such as
defense
– Help service the pre-existing federal debt and
thereby reduce taxes at the federal level for pre-
existing population
The Positives cont.
• May help pay for Social Security and
public health care
• Help hinder the population aging
problem
• Increased levels of employment-based
and family-based immigration would
raise national economic welfare as well
as global economic welfare
Negatives
• Many immigrants have low education,
high fertility
• Security Threat
• Net fiscal impact may be costly rather
than beneficial
• Crowding
Policies
• 1) liberalize or eliminate quotas on skilled immigrants as well
as “labor certification” requirements
– Promote economic welfare of natives with a greater benefit to US
employers
2) liberalize the existing guest-worker programs to allow more
unskilled aliens
Both policies have not been enacted
- result in opposition by unskilled native workforce
These fiscal policies could ensure that all income classes
share in the economic benefits produced by increased and
liberalized immigration policies
Effects of Illegal Immigration
• Rise in number of illegal immigrants over the
past ten years from 5 to 12 million has
prompted charges that America has lost
control of its borders
• Governor’s of New Mexico and Arizona have
declared a state of emergency over illegal
immigration
• President Bush signed “Secure Fence Act”
which authorized spending $1.2 billion for
the construction of a 700 mile long fence on
US-Mexico border
Illegal Immigration as a Benefit
to Economy?
• “Stemming illegal immigration would likely
lead to a net drain on the US economy” –
Gordon Hanson, professor at UCSD
• Has to do with the availability of labor
– Provides US businesses with the types of workers
they want, when they want them, and where they
want them
• If policy reform succeeds in making illegal
immigrants more like legal immigrants (in
terms of skills and occupational mobility), it
is likely to lower national welfare
The US Immigrant Population
40
35
30
Temporary Work
25 Visas
20 Illegal Immigrants
15
10 Total Immigrants
5
0
2000 2001 2002 2003 2004 2005
Y-axis: Millions of Individuals
X-axis: Years 2000-2005
Source: Hanson, 2007, p.6
Conclusion
• Complicated issue with positives and
negatives
• Liberalizing reforms over restrictionist
policies
• Although there is a personal safety threat of
allowing more immigrants, studies have
shown that increased immigration will
reduce federal debt, reduce taxes, help pay
for Social Security, and hinder population
aging problem
References:
• Chang, Howard F. (2000) "The Economic Analysis of
Immigration Law", Migration theory: Talking across
disciplines (2000): Brettell, Caroline B.; Hollifield,
James F. (editors), New York, Routlege, 205-230.
• Hanson, Gordon H. (2007), “The Economic Logic of
Illegal Immigration”, CSR No. 26,
• April 2007 Council on Foreign Relations, pp. 1-36
• Lee, Ronald, Miller, Timothy, (2000), "Immigration,
Social Security, and Broader Fiscal Impacts",
American Economic Review, vol. 90, no. 2, (May
2000), pp. 350-354