Here Comes Everybody

Over at the Volokh Conspiracy, Eugene Volokh wonders what would happen if the U.S. adopted an “open borders” policy. The consensus view seems to be “way too many” though exact figures tend to vary greatly, as one would imagine. I don’t necessarily disagree with that assessment, but I do wonder whether people may be overestimating the number of people who would actually come to the U.S. and/or overestimate the negative impact that such unlimited immigration would have.

The first thing a lot of people seem to fail to factor in is that just because the U.S. has decided to fling open its borders doesn’t mean that other countries are going to follow suit. Getting into the U.S. is one thing, getting out of your home country can be quite another. For the most part, the sort of countries one would most want to get away from are precisely the ones that limit your ability to leave, and I suspect that such limits would only grow more strict if the government knew it could lose the bulk of its population to the U.S. in short order.

Second, I think people tend to underestimate the non-financial costs that immigration involves. Moving to a foreign country is hard. You have to leave the place where you grew up and the culture with which you are most familiar and probably for a place whose customs and often whose language you do not understand. There are limits to how many people are willing to do that, regardless of how much they might improve their standard of living in the process. Take China, for example. There are roughly 100 million internal immigrants in China, people who have moved from the mainland to the coast because the economic opportunities available there are so much greater. In terms of non-financial costs, the move from mainland China to coastal China is probably about as low as you’re going to get. Same language. Same history. Same customs and religions. Yet we’re still only talking about less than 10% of the total population who have made the move (I couldn’t find breakdowns on the percentage of the mainland population versus the coastal population, so I realize the number is actually probably higher, but my understanding is that the fraction of people originally from the coast is rather small).

There’s also the question of whether open immigration would be subject to some version of the law of diminishing returns. The idea is that there are only so many job opportunities in the U.S., so that once a certain threshold of immigration is reached, each new immigrant will simply be bidding down the wages of everyone else, and this will continue until the wage premium for working in the U.S. will be so small that it won’t be worth it to come here any more (in the meantime, so the story goes, this process will reduce the standard of living of native born Americans, until it’s not much better than that of the developing world). The story sounds plausible enough, and its the specter of something like this that I think is driving at least some of the anti-immigration types, but the example of China I mentioned earlier gives me pause. If 100 million immigrants aren’t enough to bring down the standard of living along the coast of China, then it’s not the clear to me that any amount of immigration would do so, at least as long as you have a fairly dynamic economy.

Of course, there are factors involved in the American case that aren’t present in China. Immigration can have social and cultural costs beyond whatever economic benefits it provides, there are issues of political economy, and the fact that the U.S. has a more developed social safety net all could change the analysis. And I would note (cause I have this sneaking feeling I’m going to be misinterpreted) that I’m not saying unlimited immigration wouldn’t hurt the standard of living of native born Americans, only that I’m less sure that it would (and less sure that the negative effect would be nearly as great) as most people.

Such are the thoughts that occupy me during the midnight hour of what was and mostly likely will be two very long workdays.