Bài giảng MicroEconomics - Chapter 022 Immigration

Chapter 22ImmigrationMcGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter ObjectivesLegal and illegal immigrationEconomic immigration as human capital investmentEffects of immigrationEffects of illegal immigrationReform of immigration law22-2Immigration FactsEconomic immigrantsLegal immigrantsAveraging 1 million per yearQuotas, refugees, and H1-B provisionOne-third of population growthOne-half of labor force growth22-3Immigration FactsIllegal immigrantsEstimated from Census data350,000 per year on averageHigh proportion from Mexico and Central AmericaTotal of 12 million residing in 2007, half from Mexico22-4ImmigrationU.S. Immigrants by Country of Origin, 2007, measured in 1000’sMexicoChinaPhilippinesIndiaColumbiaHaitiCubaVietnamDominican RepublicEl Salvador0 50 100 150 200Source: U.S. Citizenship and Immigration Services22-5Decision to MigrateEarnings opportunitiesIncrease value of human capitalMoving costsDistanceFollow beaten path Age Other factors22-6Economic EffectsPersonal gainsEconomic benefits exceed costsOther issuesUncertainty and imperfect informationBackflowsSkill transferabilitySelf-selection22-7Migration ModelUnderstand economic outcomesAssumptionsU.S. and MexicoLabor demand greater in U.S.No long-term unemploymentLabor quality the sameMigration has no costWage differentials key factorMigration is legal22-8Migration ModelWage RateUnited StatesMexicoQuantity of Labor(Millions)Quantity of Labor(Millions)DuDmaAbdDBWeWage RateWecfFCWu00WmImmigration impacts wages, employment, and outputgG22-9Migration ModelWage rates will equalizeIn the U.S.:Wage rate fallsEmployment upOutput upIn Mexico:Wage rate risesEmployment downOutput down22-10Migration ModelOverall effects:World output upEfficiency gainsOther effectsBrain drainsU.S. natives lose wage incomeU.S. businesses gain income22-11Migration ModelComplications and modificationsMigration costs not zeroRemittances redistribute incomeBackflows: temporary migrationImmigrant workers as complementary vs. substitute laborExpansion of capital in some industries22-12Migration ModelUnemployment in MexicoWhich workers migrate?Fiscal impactsFiscal burden > taxes paidWages will not equalizeResearch findings are mixed22-13Illegal ImmigrationEmployment effectsTwo extreme viewsFixed number of jobs in economyImmigrant employment decreases domestic employment 1-for-1Immigrant work undesirableNo domestic workers displaced22-14Illegal ImmigrationWage effectsSubstitute labor vs. complementary laborUnskilled labor wages stay lowPrice effectsCheap labor keeps prices lowFiscal impacts can be sizeableOther concerns22-15Immigration ReformLong history of immigration quotas Immigration Reform and Control Act of 1986Legal immigration limit up to 700,000 per year2007 proposal to reform immigration law defeatedRemains controversial issue22-16Key Termseconomic immigrantslegal immigrantsillegal immigrantsH1-B provisionhuman capitalbeaten pathsbackflowsskill transferabilityself-selection efficiency gains from migration brain drains remittances complementary resources substitute resources negative self-selection compensating wage differential22-17Next Chapter PreviewIntroduction toMacroeconomics22-18