Chapter IV - The Economy: Evidence for First-Best Policy

Economic issues have always been at the forefront of the immigration forum in the United States, from its embryonic foundations to contemporary debates.  While socio-political factors are certainly pertinent as they provide tangibility to the emotionalism underlying personal and societal identity and membership issues, individual Americans, as rational utility-maximizers, are concerned primarily with their respective pieces of the economic pie.  This is evidenced by the historical emphasis in the United States on the economic factors in the immigration equation, even when disguised in socio-cultural cloaks and appealing to the sentimentalities of nationalism or ethnic, educational, work-ethic or even biological distinctions.  In this way, debates over immigration are similar to those involving international trade and issues of domestic wealth distribution, where the clash of ideological ideals and economic advantages are equally pronounced in public discourse and where greater value is generally placed on the latter when determining official policy, as evidenced through increasingly liberalized trade policies and the maintenance of a fairly strong class structure particular to capitalist dogma.


This section provides an overview of the literature and statistical data addressing the contemporary economic realities of immigration.  It will address migrant incentives, highlight the basic economic platforms of restrictionists and expansionists, unpack substantial empirical evidence connecting immigration to its private and public economic effects in the United States, and weigh the results on a type of cost-benefit scale through which resultant economic reason will bring us closer to formulating a best-choice policy formula.  The true economic effects of each individual migration would be an arduous if not subjective and therefore impossible task.  Moreover, it would not frame the economic question in an appropriate light as the issue is one of cumulative analysis with a primary focus on the national effects of immigration rather than on affected individual, familial, municipal or state accounts.  Therefore, the average U.S. revenues and expenditures attached to migrants as a singular class is the most appropriate and useful technique.  Nevertheless, there is a general consensus in the literature that the economic effects of immigration greatly depend upon the skill levels of migrants 39 and therefore a certain level of effort will be made to separate low- from high-skilled migrants in the analysis.

39 Pugel, International Economics, 365.