Selected Quotes from The Economic Logic of Illegal Immigration by Professor Gordon H. Hanson.

Quotes Selected by Chuck McGlawn.

It is a 52-page report commissioned by the Council on Foreign Relations. I am not going to try to abbreviate the contents of the Dr. Hanson Report. I am just going to share with you some of the quotations that should have some effect on your thinking about so called Illegal Immigration. We will quote some of Dr. Hanson remarks found in the Foreword, Introduction, Current U.S. Immigration Policy, Illegal Immigration and the U.S. Economy, Benefits and Costs of Immigration, Reforming Immigration Policy and Final Considerations

In the FORWARD, Professor Gordon H. Hanson approaches immigration through the lens of economics.

By focusing on the economic costs and benefits of legal and illegal immigration, Professor Hanson concludes that stemming illegal immigration would likely lead to a net drain on the U.S. economy.

Hanson argues that guest worker programs now being considered by Congress fail to account for the economic incentives that drive illegal immigration, which benefits both the undocumented workers who desire to work and live in the United States and employers who want flexible, low-cost labor.

In the INTRODUCTION Professor Hanson says, “From a purely economic perspective, the optimal immigration policy would admit individuals whose skills are in shortest supply and whose tax contributions, net of the cost of public services they receive, are as large as possible. Admitting immigrants in scarce occupations would yield the greatest increase in U.S. incomes, regardless of the skill level of those immigrants. In the United States, scarce workers would include not only highly educated individuals, such as the software programmers and engineers employed by rapidly expanding technology industries, but also low-skilled workers in construction, food preparation, and cleaning services, for which the supply of U.S. native labor has been falling.”

[T]here is little evidence that legal immigration is economically preferable to illegal immigration. In fact, illegal immigration responds to market forces in ways that legal immigration does not.

Illegal migrants tend to arrive in larger numbers when the U.S. economy is booming [When they are needed.] and move to regions where job growth is strong. Legal immigration, in contrast, is subject to arbitrary selection criteria and bureaucratic delays, which tend to disassociate legal inflows from U.S. labor-market conditions.

Two-thirds of legal permanent immigrants are admitted on the basis of having relatives in the United States. Only by chance will the skills of these individuals match those most in demand by U.S. industries.

[T]emporary legal immigrants come to the country at the invitation of a U.S. employer, the process of obtaining a visa is often arduous and slow. Once here, temporary legal workers cannot easily move between jobs, limiting their benefit to the U.S. economy.

Quotes from ILLEGAL IMMIGRATION AND THE U.S. ECONOMY: “Between 1960 and 2000, the share of working-age native-born U.S. residents with less than twelve years of schooling fell from 50 percent to 12 percent.”

Native-born U.S. workers with low schooling levels are increasingly hard to find. Yet these workers are an important part of the U.S. economy—they build homes, prepare food, clean offices, harvest crops, and take unfilled factory jobs.

Illegal immigration also brings low-skilled workers to the United States when the productivity gains of doing so appear to be highest. During the past twenty years, Mexico has experienced several severe economic contractions, with emigration from the country spiking in the aftermath of each downturn. In terms of the economic benefits, this is exactly when one would want workers to move—when their labor productivity in the United States is highest relative to their labor productivity at home. Long queues for U.S. green cards mean there is little way for legal permanent immigration to respond to such changes in international economic conditions.

Quoting from BENEFITS AND COSTS OF IMMIGRATION:  “Overall, immigration increases the incomes of U.S. residents by allowing the economy to utilize domestic resources more efficiently”

Immigration generates extra income for the U.S. economy, even as it pushes down wages for some workers.

More workers allow U.S. capital, land, and natural resources to be exploited more efficiently. Increasing the supply of labor to perishable fruits and vegetables, for instance, means that each acre of land under cultivation generates more output. Similarly, an expansion in the number of manufacturing workers allows the existing industrial base to produce more goods.

The annual immigration surplus in the United States appears to be small, equal to about 0.2 percent of GDP in 2004.

[L]ower wages for low-skilled labor mean lower prices for labor intensive goods and services, especially those whose prices are set in local markets rather than through competition in global markets. Patricia Cortes finds that in the 1980s and 1990s U.S. cities with larger inflows of low-skilled immigrants experienced larger reductions in prices for housekeeping, gardening, child care, dry cleaning, and other labor-intensive, locally traded services.

Lower prices for goods and services raise the real incomes of U.S. households, with most of these gains going to those in regions with large immigrant populations.

The total impact of immigration on U.S. residents—the sum of the immigration surplus (the pretax income gain) and the net fiscal transfer from immigrants—would be unambiguously positive.

If immigrants are a net fiscal drain, the total impact of immigration on the United States would be positive only if the immigration surplus exceeded the fiscal transfer made to immigrants. For low-skilled immigration, whether legal or illegal, this does not appear to be the case.

In REFORMING IMMIGRATION POLICY: [Remember this report was published in April 2007]  Liberty Views suggest that you read this segment yourself. We  make this recommendation because, “There are no easy answers to U.S. immigration problems.”

“One issue on which most members of Congress agree is that border and interior enforcement should be expanded. At current enforcement levels, as many as 400,000 new illegal immigrants are probably still entering the country on net each year, and halting that flow will require a further increase in the already substantial resources devoted to the task.

“The expenditures on border enforcement (more than 0.1 percent of GDP) are already greater than the fiscal benefits of reducing illegal immigration (less than 0.1 percent of GDP).

Currently [2007], U.S. employers, by virtue of asking workers for identification at the time of their hiring, can plausibly deny having knowingly hired illegal immigrants. A system of electronic verification would potentially eliminate plausible deniability, placing a greater burden on employers to screen out workers who are unauthorized for employment. But by any measure, halting illegal immigration is likely to be a net drain on the U.S. economy.

 Professor Gordon H. Hanson is the director of the Center on Pacific Economies and professor of economics at University of California, San Diego, where he holds faculty positions in the Graduate School of International Relations and Pacific Studies and the department of economics. Professor Hanson is also a research associate at the National Bureau of Economic Research and coeditor of the Journal of Development Economics. He obtained his BA in economics from Occidental College in 1986 and his PhD in economics from MIT in 1992.

Prior to joining UCSD in 2001, he was on the economics faculty at the University of Michigan (1998–2001) and at the University of Texas (1992–1998).

Professor Hanson has published extensively in the top academic venues of the economics discipline. His current research examines the international migration of high-skilled labor, the causes of Mexican migration to the United States, the consequences of immigration on labor-market outcomes for African-Americans, the relationship between business cycles and foreign outsourcing, and international trade in motion pictures.

In recent work, he has studied the impact of globalization on wages, the origins of political opposition to immigration, and the implications of China’s growth for the export performance of Mexico and other developing countries. His most recent book is Why Does Immigration Divide America? Public Finance and Political Opposition to Open Borders (Institute for International Economics,

For more current recommendations, read A Better Immigration Policy for America
Each year, the United States turns away thousands and thousands of highly skilled immigrants who want to join the U.S. labor force. It does this by setting aside more work visas for people chosen randomly by a lottery than for those who possess demonstrably greater abilities, by sending home many of the foreign graduates it has helped to educate, and by admitting an absurdly low number of immigrants for the size of the U.S. economy. As a result, the United States squanders a fantastic opportunity to foster innovation and accelerate economic progress, according to Independent Institute Research Director Alex Tabarrok. READ MORE

The No-Brainer Issue of the Year: Let High-Skill Immigrants Stay, by Alex Tabarrok (The Atlantic, 12/20/11)

Launching the Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast, by Alex Tabarrok; a TED Kindle book

Entrepreneurial Economics: Bright Ideas from the Dismal Science, edited by Alex Tabarrok