Saturday, August 07, 2010

Economic impact of local immigration laws

Huyen Pham and Va H. Pham, "The Economic Impact of Local Immigration Regulation: An Empirical Analysis." Forthcoming from Cardozo Law Review (h/t ImmigrationProf Blog).


A wave of local anti-immigration laws has swept the country, triggering contentious debate and raising significant legal and policy issues. One critical dimension that has been largely ignored, however, is the economic impact of these laws: are jurisdictions with them better off economically than those without them? 
In the first empirical study of this issue, we analyze the economic impact of these laws. The laws take different forms - some authorize local police to enforce federal immigration laws, some restrict benefits like housing and employment to those with legal immigration status, and some require all government transactions to be conducted in English only. Applying statistical analysis to economic data from the U.S. Census Bureau, we find such laws resulted in a 1 to 2 percent drop in employment, or 337 to 675 lost jobs for the average county. This drop in employment includes both authorized and unauthorized workers. We also find that the laws hurt some industries, such as the restaurant industry, while helping others, such as the grocery and liquor store industry. This suggests that affected workers may be switching jobs, rather than leaving a particular jurisdiction altogether. 
Because local immigration regulation has such profound policy impact, local governments considering the efficacy of these laws need to base their decisions on empirical evidence, not assumptions, about the laws’ effect. This Article provides crucial information for that decision making.

So a negative effect, but not very drastic.  This is really interesting, and more of these sorts of studies should be conducted to tease out the ways in which local immigration laws affect communities.  I don't really understand how the laws benefit liquor stores, though I do sometimes cry in my beer.


ConsDemo 10:21 PM  

That's an interesting, if not surprising, conclusion. The anti-immigration crowd (forget their phony distinction of "illegal" versus "legal" since they almost without exception oppose raising legal immigration limits) have always tried to play the populist line and very few call them on it. If you listen to the anti-immigration crowd, getting rid of the illegals would result in spontaneous prosperity for the native born middle and lower class. There isn't much evidence to back up this claim, they simply rely on the "lump of labor" theory that there is some fixed amount of work demanded. To follow, if you eliminate some share of the workforce, bargaining power for those who remain rises. It probably explains why hostility to immigrants has a degree of support (if hidden) in the grassroots left as well.

It probably is true that legal or native born workers in certain job fields would benefit but they wouldn't be anywhere near a majority. Many of the jobs now worked by illegals were low paying before the latest immigration wave started in the 1980s. In some cases, wages would be bid up slightly (but unskilled labor isn't suddenly going to pay "middle class" wage rates), but in some cases positions just won't be filled and some clients won't accept the higher costs. The result: some companies will go out of business, hence the employment decline.

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