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Fitzstream Immigration

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Fitzstream Immigration

  1. 1. Chapter 23 Immigration Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
  2. 2. 23-2 Number of Immigrants • Economic immigrants • Legal immigrants • Migration averaged 1 million per year • Quotas, refugees, and H1-B provision • One-third of population growth • One-half of labor force growth LO1
  3. 3. 23-3 Number of Immigrants LO1
  4. 4. 23-4 Number of Immigrants LO1 Family- Sponsored I mmigrant s, 65.0% Employment - Based , 13.0% Refugees, 16.0% Diversit y I mmigrant s, 4.7% Ot hers, 1.3% Legal Immigration by major category of admission, 2011
  5. 5. 23-5 Number of Immigrants • Illegal immigrants • Estimated from Census data • 250,000 per year on average • High proportion from Mexico and Central America • Total of 11.1 million residing in the U.S. in 2012; 58% from Mexico LO1
  6. 6. 23-6 Number of Immigrants Total 1,062,040 1. Mexico 143,446 2. China 87,016 3. India 69,013 4. Philippines 57,011 5. Dominican Republic 46,109 6. Cuba 36,452 7. Vietnam 34,157 8. South Korea 22,824 9. Columbia 22,635 10. Haiti 22,111LO1
  7. 7. 23-7 Decision to Migrate • Take advantage of superior economic opportunities • Escape political or religious oppression • Reunite with family members LO2
  8. 8. 23-8 Decision to Migrate • Earnings opportunities • Increase value of human capital • Moving costs • Distance • Follow beaten path • Age • Other factors LO2
  9. 9. 23-9 Global Perspective LO2
  10. 10. 23-10 Economic Effects • Personal gains • Economic benefits exceed costs • Other issues • Uncertainty and imperfect information • Backflows • Skill transferability • Self-selection LO3
  11. 11. 23-11 Impacts on Wages, Efficiency, Output • Understand economic outcomes • Assumptions • U.S. and Mexico • Labor demand greater in U.S. • No long-term unemployment • Labor quality the same • Migration is legal and has no cost • Wage differentials key factor LO3
  12. 12. 23-12 Impacts on Wages, Efficiency, Output WageRate United States Mexico Quantity of Labor (Millions) Quantity of Labor (Millions) Du Dm a A b d D B We WageRate We c f F C Wu 0 0 Wm Immigration impacts wages, employment, and output g G LO3
  13. 13. 23-13 Impacts on Wages, Efficiency, Output • Wage rates will equalize • In the U.S.: • Wage rate falls • Employment and output rise • In Mexico: • Wage rate rises • Employment and output fall LO3
  14. 14. 23-14 Global Perspective LO3 Emigrant Remittances, Selected Developing Countries, 2011
  15. 15. 23-15 Impacts on Wages, Efficiency, Output • Overall effects: • World output rises • Efficiency gains • Other effects • Brain drains • U.S. natives lose wage income • U.S. businesses gain income LO3
  16. 16. 23-16 Complications and Modifications • Migration costs not zero • Remittances redistribute income • Backflows: temporary migration • Immigrant workers as complementary resources vs. substitute resources • Expansion of capital in some industries • Full employment vs. unemployment • Negative self-selection LO3
  17. 17. 23-17 Fiscal Impacts • Fiscal burden > taxes paid • Wages will not equalize • Research findings are mixed LO3
  18. 18. 23-18 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 • Compensating wage differential LO4
  19. 19. 23-19 Optimal Immigration • Immigration can either benefit or harm a nation, depending on several factors • Immigration should be expanded until its MB = MC • The level of immigration is set through quotas, special provisions, border enforcement and immigration laws LO5
  20. 20. 23-20 Startling Slowdown in Illegal Immigration • Number of illegal immigrants in the U.S. tripled between 1990 and 2007 • That number fell 8% in 2009 because of deceased job prospects during the recession • Illegal immigration population leveled off 2010 and 2011 at 11.1 million • Falling birthrates • Better local job opportunities • Government policies • Stronger border enforcement

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