America’s immigration wars are at an impasse. As illegal crossings at the southern border soar and backlogs of green card petitions reach new heights, there is a widespread feeling that the US immigration system is deeply broken. And yet there’s no chance of bipartisan agreement on what exactly it would mean to fix it — at least not in the near future.
Conservatives are largely united in believing that the system should focus primarily on deterring unauthorized migration, enforcing the rule of law and ensuring that the United States can elect newcomers best positioned to succeed in a modern market democracy. The left, meanwhile, has adopted a more open approach, creating more legal avenues for the poor and ambitious.
With that in mind, Ran Abramitzky and Leah Boustan, economists at Stanford and Princeton universities respectively, have published Streets of Gold, an interesting short account of immigrant optimism. While some on the restrictionist right warn that openness to immigration is creating a new underclass, the authors urge their readers to “think about immigration policy in terms of generations, not years.” In a generation or two, they argue, the descendants of today’s immigrants will be just as comfortable as the children and grandchildren of immigrants of earlier eras, regardless of their wealth or level of education.
But while Abramitzky and Boustan’s argument about optimism about the very long-term prospects of second- and third-generation Americans is plausible enough, their main takeaway from this is that it would be “wrong” for the US government to pre-select educated immigrants who, upon arrival, would easily admit that they “enjoy high earnings, contribute to scientific innovation, and pay more than their fair share of public funds” because the children and grandchildren of even the poorest immigrant workers will be fine—is less convincing.
Streets of Gold: America’s Untold Story of Immigrant Success, Ran Abramitzky and Leah Boustan, PublicAffairs, 256 pp., $29, May 2022
Given that Abramitzky and Boustan acknowledge that “open borders” are a political undesirable, a more selective skills-based immigration system would, by their own logic, prove to be at least as beneficial as a skills-blind approach if not much more, and in a much shorter period of time. In an era of economic volatility and intense political debate over migration, this is no small matter. Almost all of the world’s market democracies have moved to point systems that select migrants based on language skills, education, job offers and other characteristics that predict labor market success and rapid integration, and for good reason.
The target countries that most adhere to this scenario, notably Canada and Australia, where it was introduced, have admitted a significantly larger influx of immigrants relative to their smaller populations than the United States, while provoking significantly less backlash, a lesson that would immigrants. well taken into account.
While I may disagree with the political approach of Abramitzky and Boustan, it is important not to minimize their significant achievement. Drawing on multiple sources of data and synthesizing its own ground-breaking academic work, Streets of Gold is not merely a polemic. In addition to being a pleasure to read, the book greatly enriches our understanding of how immigrants are integrated into American economic and cultural life. Although the authors are supporters of a more permissive immigration policy, they are extremely honest in presenting their findings.
One of the familiar aspects of the modern immigration debate is that pessimism about more recent immigrants and their prospects is often linked to the feeling that previous generations of immigrants have gone from “rags to riches” quickly. However, as Abramitzky and Boustan have shown, while immigrants in the era of mass migration from Europe, which lasted from 1850 to 1913, earned much higher incomes than they would have in their homelands, their wealth improved only modestly. when they were making their way to America. life, a pattern quite similar to that seen among recent immigrants.
As a result, our overly romantic notion of how European immigrants navigated the labor market in the past leads many Americans to overlook the gains made by more recent immigrants from Latin America and elsewhere.
However, it is also true that between the era of mass immigration and the modern era, the income gap between native workers and newcomers has increased significantly. Abramitzky and Boustan note that newly arrived European immigrants in the 1900s held, on average, “similar jobs [to] US-born workers,” meaning that they mostly started in the middle rungs of the occupational ladder. By contrast, in the modern era, they find that the average immigrant has starting earnings 30 percent below the native-born average, a reflection in part of the fact that the skills gap between, say, the United States and Honduras in 2022 is greater than that which separated it in 1902 USA and Germany.
In both periods, Abramitzky and Boustan observe, immigrants gained relative to natives by gaining experience in the labor market. Low-wage immigrants in the 1900s earned about 10 percent less than their native-born counterparts and closed about a third of that gap over the course of their working lives. The difference in earnings between modern immigrants and modern natives is also decreasing, falling to 16 percent after 20 years.
But to the authors, the solid but unspectacular gains made by immigrant workers over the course of their working lives are far less important than what happens in subsequent generations, which is the heart of the Golden Streets narrative. By carefully matching the tax records of individuals born around 1980 with those of their parents, Abramitzky and Boustan are able to compare intergenerational progress between children of native and foreign parents. They find that if a child has native-born white parents with earnings in the 25th percentile, they tend to climb to the 40th percentile as adults. Children of foreign-born parents, who start at the 25th percentile, rise further to the 50th percentile. Based on census data, the authors find that this pattern of intergenerational improvement is similar to that observed a century ago.
With an immigrant parent, what could be the reason for this advantage? This is where Streets of Gold really shines. Instead of suggesting that immigrants are somehow more virtuous than their native counterparts—for example, it’s not uncommon for people to praise immigrants over, say, native-born black Americans, or to claim that “Asian culture” is responsible for immigrants’ academic success, and second . -generation of Asian Americans – Abramitzky and Boustan focus on two more prosaic options that shed a lot of light on how immigrant assimilation actually works in practice.
First, because immigrants are by definition less tied to a particular location in the US than native-born Americans, who may have deep multigenerational roots in their communities, they are more open to moving in search of opportunity. As a result, immigrants tend to settle in cities and neighborhoods that have more opportunities, which favors their children. This is true even when communities with rich opportunities are more expensive, as immigrants are more willing to live in multi-unit housing that is cheaper and often care more about sending remittances to family members in their country of origin than keeping up . with the (American) Joneses, meaning they care little about the local cost of living.
“One implication of our findings,” Abramitzky and Boustan note, “is that it is very likely that US-born families would have achieved the same success if they themselves had moved to places with such great opportunity.” Although the authors do not dwell on this point, it is a reminder that excessive land-use regulation and other policies that raise the cost of living in America’s most prosperous regions are severely damaging the prospects of future generations.
Second, there is a sense that the apparent mobility advantage experienced by children of immigrants stems from the disadvantage of their immigrant parents. Immigrants, especially recent immigrants, often face barriers that create a mismatch between their earnings and their underlying talents, such as a language barrier, or the need to accept low-paying jobs instead of investing in higher education, or difficulty taking advantage of education or skills acquired in their home country.
As Abramitzky and Boustan put it, “think of the proverbial Russian scientist who ends up driving for Uber.” In these cases, children of immigrant parents are “upwardly mobile” in terms of their parents’ actual earnings in the US labor market, but not nearly as much in terms of their parents’ capabilities, which parents can pass on to their children in greater numbers. ways. Similarly, sociologists of immigration refer to the “class-specific resources” of immigrant parents who were raised in the upper classes of their homelands, ie. cultural practices, social networks, and narrative self-understandings that can help their children climb the professional and social ladder.
Abramitzky and Boustan, however, do not fully consider the possibility that immigrants from a particular country of origin are less likely to be among the most enterprising of their countrymen when the costs of migration fall. The late Stanford economist Edward Lazear famously noted that because the United States allocates immigration space in a way that treats some countries more generously than others, the most successful immigrants to the United States come from countries that send the fewest immigrants to America relative to their population. .
To illustrate, Lazear compared immigrants from two developing countries, Nigeria and Tonga: Nigerian citizens have a much harder time securing a green card than Tongan citizens, and Nigerians who do make it to the U.S. earn more than twice as much as their Tongan counterparts on average.
In the absence of this distribution of immigration slots with formal rules and restrictions, international migration became cheaper than in previous periods, which in turn meant that only the most ambitious seekers could not move. Cheap air travel and long-distance communications have greatly lowered the material and psychological barriers to migration, and life can be much easier for migrants who join existing ethnic enclaves than for the pioneers who establish them.
This is one aspect in which immigrants in the age of WhatsApp really differ from those who arrived in the United States in the age of Steam, and it is not unreasonable to expect that this could have implications for the pace of immigrant success. One could argue that explicit modern efforts to select immigrants based on skills provide a proxy for the ways in which the high cost of transatlantic sea crossings or the absence of distance-bridging tools like WhatsApp or WeChat have deterred the less ambitious. And that is why Abramitzky and Boustan’s proposal for a relatively non-discriminatory approach to immigration is ultimately unconvincing.
In essence, Streets of Gold is asking policymakers in the United States and other migrant destinations to be patient. Over time, past experience strongly suggests that the descendants of newcomers will eventually converge with the natives, so why give up the gift of global talent? As an argument against calls to reduce the influx of immigrants, this is compelling. Given the rapid aging of the US population, immigration represents an important source of demographic vitality. But as an argument against immigration selection, the book fails.
Even if we determine that the descendants of all immigrants will do equally well in the long run, a claim that goes beyond the historical evidence that Abramitzky and Boustan painstakingly present, a more selective approach could pay big dividends in the interim. As immigration advocates Alec Stapp and Jeremy Neufeld of the Institute for Progress recently put it, “for a given level of immigration, scientists, engineers, inventors and entrepreneurs reap the greatest benefits.” Faced with two job candidates—one of whom will add value to the company as soon as they start, while the other, despite having the same underlying talent, will need months of training and practice—no one would expect an employer to shrug at the difference with the shoulders. .
So it is telling that nowhere in Streets of Gold do Abramitzky and Boustan offer a sustained case against immigration selection. In fact, they probably offer more evidence against their case for a skills-blind immigration policy than for it. For example, they report that, like children of low-income immigrants, children of high-income immigrants outperform natives raised in similar material circumstances, suggesting that the immigrant advantage is not limited to newcomers with earnings at the 25th percentile.
They further note that even if one narrowly focuses on immigrant parents starting at the 25th percentile, there is a wide range of outcomes across countries of origin. For example, Abramitzky and Boustan note that children of immigrants from highly skilled populations, such as second-generation Chinese and Indian Americans, are exceptionally successful, perhaps because they can draw on social connections from a highly skilled community. even if their own parents do not earn much—a finding consistent with Lazear’s immigrant selection thesis.
Rather anticlimactically, Abramitzky and Boustan’s main argument for openness to low-skilled immigration is that the U.S. economy currently faces a high demand for low-wage labor in sectors such as construction, hospitality, child and elder care, and agriculture, which no doubt true. Leaving aside the fact that this cyclical situation is changing, it is worth considering how these industries might evolve in the coming years.
Note that there is growing political support for raising wages and labor standards in the service sector, as seen in the recent spate of minimum wage increases in states and cities across the country. Over time, efforts to upgrade low-wage jobs in these historically undercapitalized industries can be expected to drive automation and business model innovation, making them less labor-intensive and more attractive to native-born workers.
Then there is the ongoing globalization of the service sector. The rise of telecommuting and strict immigration restrictions are prompting more US employers to embrace offshoring, a form of “virtual immigration” that can complement local workers while serving as a substitute for traditional immigrant labor. At the same time, American retirees are increasingly settling in Mexico and other less expensive destinations—a development that could reshape the senior care industry.
You don’t have to believe that robots or offshoring will destroy jobs en masse to realize that in the coming years they may cause significant displacement of less-educated workers, domestic or foreign. Sophisticated advocates of low-skilled immigration have recently countered that there will always be a demand for low-skilled “core workers” whose jobs cannot be automated or moved overseas, such as caregivers and cooks. But if higher wages and better working conditions are available, these core tasks may just as well be performed by highly skilled workers who find them more attractive, fulfilling, or flexible than serving as members of the laptop class.
If I had to guess, I’d say Abramitzky and Boustan’s political stance is based on a humanitarian commitment. Many Americans, mostly though not exclusively on the political left, believe that immigration selection represents a betrayal of America’s history as a haven for people seeking freedom and a better life. Although Abramitzky and Boustan are careful to avoid harsh language, there are hints of this cosmopolitan commitment throughout the book. However, it is worth reiterating that destination countries that fully accept immigrant selection tend to accept more immigrants per capita than the United States, presumably because their citizens perceive internal migration as more rewarding and less burdensome. This also has humanitarian benefits.
Regardless, the beauty of Streets of Gold is that you don’t have to accept the authors’ conclusions in order to learn from their scholarship. Abramitzky and Boustan have made tremendous contributions to our understanding of the economic history of immigration and what it can teach us about upward mobility in the United States. And in doing so, they may have inadvertently advocated a more selective national immigration strategy.
