Advertisement

Public Choice

, Volume 174, Issue 3–4, pp 351–405 | Cite as

The Grecian horse: does immigration lead to the deterioration of American institutions?

Article

Abstract

Concerns about the institutional impact of immigration, particularly in the United States, are not new. We can trace them back to Benjamin Franklin, Thomas Jefferson, and Alexander Hamilton. More recently, in response to a literature that questions the desirability of current immigration restrictions, Borjas (J Econ Lit 53:961–974, 2015) speculates that immigrants coming from countries with poor institutions could reduce substantially the institutional quality in the United States to a point where it could negate all economic gains associated with immigration in terms of GDP and income. Using the Economic Freedom of North America index since 1980, we find no evidence to corroborate Borjas’s concerns. However, we find mixed evidence that immigration increases minimum wages and union density.

Keywords

Economic freedom Immigration Institutions State government 

JEL Classification

F22 H70 O43 

Notes

Acknowledgements

We thank the participants from the Free Market Institute at Texas Tech University research workshop for their comments. We owe a great deal of gratitude to Andrew T. Young, Jamie Bologna, and Audrey Redford for their comments and assistance in helping us improve on previous drafts of this paper. We also thank the anonymous referees, whose comments and suggestions have helped us to improve our article. The usual caveats apply. Padilla gratefully acknowledges financial support from the John Templeton Foundation.

References

  1. Acemoglu, D., Johnson, S., Robinson, J. A., & Yared, P. (2008). Income and democracy. American Economic Review, 98(3), 808–842.CrossRefGoogle Scholar
  2. Alesina, A., Harnoss, J., & Rapoport, H. (2016). Birthplace diversity and economic prosperity. Journal of Economic Growth, 21(2), 101–138.CrossRefGoogle Scholar
  3. Algan, Y., & Cahuc, P. (2010). Inherited trust and growth. American Economic Review, 100(5), 2060–2092.CrossRefGoogle Scholar
  4. Algan, Y., & Cahuc, P. (2013). Trust, growth and well-being: New evidence and policy implications. Bonn: Institute for the Study of Labor.Google Scholar
  5. Ang, J. B. (2013). Institutions and the long-run impact of early development. Journal of Development Economics, 105, 1–18.CrossRefGoogle Scholar
  6. Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58(2), 277–297.CrossRefGoogle Scholar
  7. Arellano, M., & Bover, O. (1995). Another look at the instrumental-variable estimation of error-components models. Journal of Econometrics, 68, 29–52.CrossRefGoogle Scholar
  8. Basso, G., & Peri, G. (2015). The association between immigration and labor market outcomes in the United States. Bonn: Institute for Labor Study.Google Scholar
  9. Baum, C. F. (2013). EC 823 applied econometrics. Retrieved December 1, 2015, from http://fmwww.bc.edu/EC-C/S2013/823/EC823.S2013.nn05.slides.pdf.
  10. Benhabib, J., & Jovanovic, B. (2012). Optimal migration: A world perspective. International Economic Review, 53(2), 321–348.CrossRefGoogle Scholar
  11. Bennett, D. L. (2016). Subnational economic freedom and performance in the United States and Canada. Cato Journal, 36(1), 165–185.Google Scholar
  12. Berry, W. D., Fording, R. C., Ringquist, E. J., Hanson, R. L., & Klarner, C. (2010). Measuring citizen and government ideology in the American states: A re-appraisal. State Politics and Policy Quarterly, 10(2), 117–135.CrossRefGoogle Scholar
  13. Berry, W. D., Fording, R. C., Ringquist, E. J., Hanson, R. L., & Klarner, C. (2012). A new measure of state government ideology, and evidence that both the new measure and an old measure are valid. State Politics and Policy Quarterly, 13(2), 164–182.CrossRefGoogle Scholar
  14. Berry, W. D., Ringquist, E. J., Fording, R. C., & Hanson, R. L. (1998). Measuring citizen and government ideology in the American states, 1960–93. American Journal of Political Science, 42(1), 327–348.CrossRefGoogle Scholar
  15. Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87, 115–143.CrossRefGoogle Scholar
  16. Borjas, G. J. (2014). Immigration economics. Cambridge, MA: Cambridge University Press.CrossRefGoogle Scholar
  17. Borjas, G. J. (2015). Immigration and globalization: A review essay. Journal of Economic Literature, 53(4), 961–974.CrossRefGoogle Scholar
  18. Card, D. (2001). Immigrant inflows, native outflows, and the local labor market impacts of higher immigration. Journal of Labor Economics, 19(1), 22–64.CrossRefGoogle Scholar
  19. Card, D. (2007). How immigration affects US cities. In Discussion Paper Series CDP No. 11/07. London: Department of Economics, University College London, Centre for Research and Analysis of Migration.Google Scholar
  20. Clark, J., Lawson, R., Nowrasteh, A., Powell, B., & Murphy, R. (2015). Does immigration impact institutions? Public Choice, 163(3), 321–335.CrossRefGoogle Scholar
  21. Clemens, M. A. (2011). Economics and emigration: Trillion-dollar bills on the sidewalk? Journal of Economic Perspectives, 25(3), 83–106.CrossRefGoogle Scholar
  22. Clemens, M., & Pritchett, L. (2016). The new economic case for migration restrictions: An assessment. Washington, DC: Center for Global Development.Google Scholar
  23. Compton, R. A., Giedeman, D. C., & Hoover, G. A. (2011). Panel evidence on economic freedom and growth in the United States. European Journal of Political Economy, 27(3), 423–435.CrossRefGoogle Scholar
  24. Council, Population. (2010). Alexander Hamilton on the naturalization of foreigners. Population and Development Review, 36(1), 177–182.CrossRefGoogle Scholar
  25. Crissey, S. R., & File, T. (2012). Voting behavior of naturalized citizens: 1996–2010. Working paper, Washington DC: US Census Bureau.Google Scholar
  26. di Giovanni, J., Levchenko, A. A., & Ortega, F. (2015). A global view of cross-border migration. Journal of the European Economic Association, 13(1), 168–202.CrossRefGoogle Scholar
  27. Docquier, F., Machado, J., & Sekkat, K. (2015). Efficiency gains from liberalizing labor mobility. Scandinavian Journal of Economics, 117(2), 303–346.CrossRefGoogle Scholar
  28. Easton, S. T., & Walker, M. A. (1997). Income, growth, and economic freedom. American Economic Review, 87(2), 328–332.Google Scholar
  29. Faria, H. J., & Montesinos, H. M. (2009). Does economic freedom cause prosperity? An IV approach. Public Choice, 141(1/2), 103–127.CrossRefGoogle Scholar
  30. Franklin, B. (1904). The works of Benjamin Franklin, including the private as well as the official and scientific correspondence, together with the unmutilated and correct version of the autobiography, compiled and edited by John Bigelow. The federal edition in 12 volumes. Vol. 2, letters and misc. writings 17351753. New York: G.P. Putnam’s Sons.Google Scholar
  31. George, H. (1899). Chinese immigration. In J. J. Lalor (Ed.), Cyclopaedia of political science, political economy, and of the political history of the United States by the best American and European authors (Vol. 1, pp. 409–414). New York: Maynard, Merrill, & Co.Google Scholar
  32. Gochenour, Z., & Nowrasteh, A. (2014). The political externalities of immigration: Evidence from the United States. Washington, DC: Cato Institute.Google Scholar
  33. Grieco, E. M., Acosta, Y. D., de la Cruz, G. P., Gambino, C., Gryn, T., Larsen, L. J., et al. (2012). The foreign-born population in the United States: 2010. Washington, DC: US Census Bureau.Google Scholar
  34. Gwartney, J. D., Holcombe, R. G., & Lawson, R. A. (2004). Economic freedom, institutional quality, and cross-country differences in income and growth. Cato Journal, 24(3), 205–233.Google Scholar
  35. Hall, J. C., & Lawson, R. A. (2014). Economic freedom of the world: An accounting of the literature. Contemporary Economic Policy, 32(1), 1–19.CrossRefGoogle Scholar
  36. Hamilton, B., & Whalley, J. (1984). Efficiency and distributional implications of global restrictions on labour mobility: Calculations and policy implications. Journal of Development Economics, 14(1), 61–75.CrossRefGoogle Scholar
  37. Hero, R. E., & Preuhs, R. R. (2007). Immigration and the evolving American welfare state: Examining policies in the US states. American Journal of Political Science, 51(3), 498–517.CrossRefGoogle Scholar
  38. Higgins, M. J., Levy, D., & Young, A. T. (2006). Growth and convergence across the United States: Evidence from the county level data. Review of Economics and Statistics, 88(4), 671–681.CrossRefGoogle Scholar
  39. Kennan, J. (2013). Open borders. Review of Economic Dynamics, 16(2), L1–L13.CrossRefGoogle Scholar
  40. Lawson, R. A. (2010). Economic freedom and the wealth and well-being of nations. In E. Chamlee-Wright & J. Kodl (Eds.), The annual proceedings of the wealth and well-being of nations, 20092010. Beloit, WI: Beloit College Press.Google Scholar
  41. Lewis, E., & Peri, G. (2015). Immigration and the economy of cities and regions. In G. Duranton, J. Henderson, & W. C. Strange (Eds.), Handbook of regional and urban economics (Vol. 5). Amsterdam: Elsevier.Google Scholar
  42. Mayda, A. M., Peri, G., & Steingress, W. (2015). Immigration to the US: A problem for the republicans or the democrats?. Bonn: Institute for the Study of Labor.Google Scholar
  43. Moses, J. W., & Letnes, B. (2004). The economic costs to international labor restrictions: Revisiting the empirical discussion. World Development, 32(10), 1609–1626.CrossRefGoogle Scholar
  44. Müeller, D., Torgler, B., & Uslaner, E. M. (2012). A comment on “Inherited trust and growth”. Economics Bulletin, 32(2), 1481–1488.Google Scholar
  45. Murphy, R. H., & Nowrasteh, A. (2017). The deep roots of economic development in the US states: An application of Putterman and Weil (2010). Journal of Bioeconomics, 1–16.  https://doi.org/10.1007/s10818-017-9255-x.
  46. National Research Council. (1997). The new Americans: Economic, demographic, and fiscal effects of immigration. In J. P. Smith & B. Edmonston (Eds.), Panel on the demographic and economic impacts of immigration. Washington, DC: National Academy Press.Google Scholar
  47. Nickell, S. (1981). Biases in dynamic models with fixed effects. Econometrica, 49(6), 1417–1426.CrossRefGoogle Scholar
  48. Ottaviano, G. I., & Peri, G. (2008). Immigration and national wages: Clarifying the theory and the empirics. Cambridge, MA: National Bureau of Economic Research.Google Scholar
  49. Powell, B., Clark, J., & Nowrasteh, A. (2016). Does mass immigration destroy institutions? 1990 Israel as a natural experiment. Lubbock: Texas Tech University, Free Market Institute.Google Scholar
  50. Putterman, L., & Weil, D. N. (2010). Post-1500 population flows and the long-run determinants of economic growth and inequality. Quarterly Journal of Economics, 125(4), 1627–1682.CrossRefGoogle Scholar
  51. Ruggles, S., Genadek, K., Goeken, R., Grover, J., & Sobek, M. (2015). Integrated public use microdata series: Version 6.0 (machine-readable database). Minneapolis: University of Minnesota.Google Scholar
  52. Schmidley, A. D. (2001). Profile of the foreign-born population in the United States: 2000. US Census Bureau; current population reports. US Government Printing Office: Washington DC.Google Scholar
  53. Sequeira, S., Nunn, N., & Qian, N. (2017). Migrants and the making of America: The short- and long-run effects of immigration during the age of mass migration. Cambridge, MA: National Bureau of Economic Research.CrossRefGoogle Scholar
  54. Spilimbergo, A. (2009). Democracy and foreign education. American Economic Review, 99(1), 528–543.CrossRefGoogle Scholar
  55. Spolaore, E., & Wacziarg, R. (2013). How deep are the roots of economic development? Journal of Economic Literature, 51(2), 325–369.CrossRefGoogle Scholar
  56. Stansel, D., & Patrick Tuszynski, M. (2017). Sub-national economic freedom: A review and analysis of the literature. Journal of Regional Analysis and Policy, 1–20. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2986353.
  57. Stansel, D., Torra, J., McMahon, F., & Palac, W. (2016). Economic freedom of North America 2016. Vancouver: Fraser Institute.Google Scholar
  58. Stansel, D., Torra, J., McMahon, F., & Palac, W. (2017). Economic freedom of North America 2017. Vancouver: Fraser Institute.Google Scholar
  59. Stimson, J. A. (1999). Public opinion in America: Moods, cycles, and swings (2nd ed.). Boulder, CO: Westview Press.Google Scholar
  60. Uslaner, E. M. (2012). Segregation and mistrust: Diversity, isolation and social cohesion. New York: Cambridge University Press.CrossRefGoogle Scholar
  61. Walmsley, T. L., & Winters, L. A. (2005). Relaxing the restrictions on the temporary movement of natural persons: A simulation analysis. Journal of Economic Integration, 20(4), 688–726.CrossRefGoogle Scholar
  62. Wiseman, T. (2016). Economic freedom and growth in US state-level market incomes at the top and bottom. Contemporary Economic Policy, 35, 93–112.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of EconomicsMetropolitan State University of DenverDenverUSA

Personalised recommendations