Fixing America's Immigration Mess

My column for the Financial Times this week is about immigration policy. What President Obama said in his speech on the subject last week was right: the issue is an "economic imperative".


Increased legal immigration raises the productivity of immigrants; encourages capital accumulation; and broadens the tax base. Research has shown that the additional tax revenue from expanded legal immigration outweighs the additional burden of providing public services to immigrants. Studies that try to gather all these factors together show a clear net benefit for US citizens in the aggregate. The best policy of all for US citizens, it turns out, would be more liberal immigration rules for guest workers combined with a moderate visa tax.

It is true that not all US workers would gain. An increase in legal unskilled immigration might not make US house-cleaners and gardeners better off. But international trade does not make everybody better off, either; nor does labour-saving technological progress. The current US immigration system is not that different, in its effect on US living standards, from a tax on labour-saving technological change - except that, unlike a tax, the policy raises no revenue to pay for better public services. Is anybody proposing a tax on innovation, to protect American wages and jobs?


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