Monday, August 22, 2005

More on Immigration

Inconsistent positions abound:
  • Matt Yglesias thinks we should have controlled levels of immigration, but that free trade should be relatively uncontrolled. He also thinks that these controlled levels should be high, but with a large welfare state. This may not be as teneble as Matt expects.
  • Meanwhile, Nathan Newman, of TPMCafe's House of Labor, thinks that we should have *uncontolled* immigration, but *controlled* trade in goods. This is the exact opposite of what Matt is saying and is inconsistent for the same reasons. Why should we treat flows of people differently from flows of goods?
  • Via Tyler Cowen comes this new David Card paper, which says that Mexican immigration has had relatively small wage effects. But, using a very simple supply and demand model, it seems that this may contradict his previous much-popularized result that a higher minimum wage has little effect on unemployment. It's because the former implies a high elasticity of labor demand and the latter implies a low elasticity of labor demand. There may be something else going on that would explain this, I haven't read the paper.


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