After completing this chapter, students will be able to: Describe the extent of legal and illegal immigration into the United States; discuss why economists view economic immigration as a personal human capital investment; explain how immigration affects average wages, resource allocation, domestic output, and group income shares; relate how illegal immigration affects employment and wages in low-wage labor markets and impacts state and local budgets; demonstrate how economics can inform current immigration discussions and attempts to reform immigration laws. | Immigration McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Number of Immigrants Economic immigrants Legal immigrants Averaging 1 million per year Quotas, refugees, and H1-B provision One-third of population growth One-half of labor force growth LO1 22- Number of Immigrants LO1 22- Number of Immigrants Illegal immigrants Estimated from Census data 350,000 per year on average High proportion from Mexico and Central America Total of 11 million residing in the . in 2009; 62% from Mexico LO1 22- Number of Immigrants Total 1,130,818 1. Mexico 164,920 2. China 64,238 3. Philippines 60,029 4. India 57,304 5. Dominican Republic 49,414 6. Cuba 38,954 7. Vietnam 29,234 8. Colombia 27,849 9. South Korea 25,859 10. Haiti 24,280 LO1 22- Decision to Migrate LO2 Take advantage of superior economic opportunities Escape political or religious persecution Reunite with family members Earnings opportunities Increase value of human capital Moving costs Distance Follow beaten path Age Other factors 22- Decision to Migrate Earnings opportunities Increase value of human capital Moving costs Distance Follow beaten path Age Other factors LO2 22- Economic Effects Personal gains Economic benefits exceed costs Other issues Uncertainty and imperfect information Backflows Skill transferability Self-selection LO3 22- Impacts on Wages, Efficiency, Output Understand economic outcomes Assumptions . and Mexico Labor demand greater in . No long-term unemployment Labor quality the same Migration is legal and has no cost Wage differentials key factor LO4 22- Impacts on Wages, Efficiency, Output Wage Rate United States Mexico Quantity of Labor (Millions) Quantity of Labor (Millions) Du Dm a A b d D B We Wage Rate We c f F C Wu 0 0 Wm Immigration impacts wages, employment, and output g G LO4 22- Impacts on Wages, Efficiency, Output Wage rates will equalize In the . Wage rate falls Employment and output rise In Mexico Wage rate rises Employment and output fall LO4 22- Impacts on Wages, Efficiency, Output Overall effects World output rises Efficiency gains Other effects Brain drains . natives lose wage income . businesses gain income LO4 22- Fiscal Impacts Fiscal burden > taxes paid Wages will not equalize Research findings are mixed LO4 22- Illegal Immigration Employment effects Two extreme views Fixed number of jobs in economy Immigrant employment decreases domestic employment 1-for-1 Immigrant work undesirable No domestic workers displaced LO5 22-
