IMMIGRATION POLICY IS TOO IMPORTANT TO LEAVE TO POLITICIANS.

Now that the electoral dust has settled, continuing Senate majority leader Chuck Schumer, still fearful of a primary challenge from his left, hopes to get some sort of immigration amnesty through.  "We have a population that is not reproducing on its own with the same level that it used to. The only way we’re going to have a great future in America is if we welcome … [and] get a path to citizenship for all 11 million, or however many undocumented there are here." That's an argument unlikely to convince anybody, as it reduces (the way economist Richard Thaler put it, en Español) to "We need more immigrants to pay pensions". The Social Security and Medicare trust funds are in trouble, but bringing in more taxpayers to work now to support current pensioners continues the Ponzi scheme, it doesn't fix anything.

DO THE RESEARCH.

The political season is upon us, with one spat being whether "comprehensive immigration reform" is a fancy way of saying "amnesty."  That's a topic that has been tackled by a number of researchers over the years (look who's still high in the hit parade!)  The most contested part appears to be the so-called "welfare immigration" (and "anchor babies" and all the rest.)  Donald Boudreaux suggests, pace Milton Friedman, that there's more to the topic than the welfare migration.

The fact that some, or even many, immigrants come to America to bilk U.S. taxpayers does not, standing alone, argue against more-open immigration. Working immigrants' extra private-sector output and contributions to tax revenues might well outweigh the burdens created by other immigrants' use of America's welfare state.

Closely related is the heavy emphasis in U.S. immigration law on preventing immigrants from working.

But that emphasis, and the underground economy that accompanies the policy constraints, can be a coherent policy for managing the welfare migration. "We suggest that border patrols, the apprehension of illegal aliens, and the offering of immigration amnesties may be viewed as different facets of the same policy. A rich country can use this policy mix to attract cheap foreign workers while avoiding low ability migrants, who, once amnestied, become a burden on the public purse."  In fact, a policy that appears internally inconsistent might in fact encourage the more ambitious migrants to self-identify. "Encouraging self-selection is optimal under some, but not all, circumstances, because there are mixes of potential immigrants for which the cost of welfare migration is more than offset by the gains from productive workers enticed by a more lenient immigration policy. Furthermore, under plausible assumptions, the rich country's optimum may require a probabilistic rather than a certain amnesty to fine-tune the mix of migrants. Numerical examples illustrate that probabilistic or certain amnesties, addressed to different partitions of the migrant population, are each optimal as the mix of potential migrants changes." But there are challenges to policy-makers, including what economists refer to as a time-consistency problem, in which amnesty today raises hopes of a future amnesty.  That's a sub-text in a recent Victor Hanson column criticizing sanctuary cities.

Many Americans support a pathway to legal residence for undocumented immigrants currently living in the United States -- if the border is first closed to further illegal immigration, if legal immigration is made ethnically blind and predicated on merit such as education and skills, if undocumented immigrants pay a fine and meet residency requirements, if applicants for legal residence are neither on public assistance nor have committed crimes, and if those with criminal records and without work records are sent back to their countries of origin.

An amnesty concurrent with tighter border enforcement might be allocatively efficient, as well as a way of addressing the time-consistency problem.  There's some heavy mathematics to this point in Arye Hillman and Avi Weiss, "A Theory of Permissible Illegal Immigration."

Under initial conditions where no immigrants are present, the median voter opposes immigration. When, however, a population of illegal immigrants has accumulated, ongoing illegal immigration becomes an endogenous equilibrium policy, at the same time that a majority of voters opposes legal immigration and opposes amnesty that would legalize the immigrants' presence.

In "The Why, When, and How of Immigration Amnesties," Gil Epstein and Avi Weiss take up the resource allocation challenge.

We consider government behavior with respect to allocations on limiting infiltration (border control) and apprehending infiltrators (internal control) and with respect to the granting of amnesties, the timing of amnesties, and limitations on eligibility for those amnesties. We demonstrate the effects of government actions on allocations and the flow of immigrants, and how the interactions between these factors combine to yield an optimal amnesty policy.

Note in all of the research cited that immigration amnesty is not evidence of a failed immigration policy, it is a policy instrument that can be used improperly.  There are still research opportunities in modeling immigration policies where legal and illegal labor force flows coexist, as in the issuance of H-2B visas to circus roustabouts from many of the same countries whose residents board trains for the border.

SENDING THE RECESSION HOME. Illegal immigrants bring a last shipment of gifts home with them.

These personal dramas will shape the stalled debate over how to treat the 12 million illegal immigrants in the U.S. Although Barack Obama's election has revived hopes of a legalization plan, most experts are skeptical, given that the same economic crisis is battering U.S.-born workers.

Mexican officials, meanwhile, are bracing for more Rafael Garcias [a construction worker rendered redundant by the housing crash] and the strains that might be felt on villages accustomed to sending immigrants and receiving a share of their paychecks in the U.S., a figure that topped $25 billion last year.

The cracks in the system had already been felt in Zinapecuaro, a town in northeast Michoacan, the state that by many estimates sends the most immigrants to Chicago.

The state of Michoacan has seen remittances falling steadily since 2006, a danger because it receives about $2.5 billion a year—about one-sixth of its total revenues—from workers in the U.S.

Here's a possible test of the Hillman and Weiss model of illegal immigration and amnesty. If the purpose of an amnesty is to release resources from searches for illegal immigrants in the workforce in order to strengthen border enforcement, we're unlikely to see much enthusiasm for such an amnesty in the near future, as the most effective policy to prevent illegal immigration with many of the potential illegal immigrants out of the country is to enforce the borders.

On the other hand, if the amnesty is part of a policy to elicit favorable self-selection (perhaps we can call that the Karlson and Katz model of illegal immigration and amnesty) there is no point in changing border enforcement from its current status, but there's no rush to grant the next amnesty either.

CONTEMPLATING IMMIGRATION AMNESTY.

There's more action in Congress on an immigration bill, perhaps with more border enforcement, and perhaps without any amnesty. A Time reporter visits Illinois and files a case for amnesty. He sensibly observes that the perceived unfairness of granting immediate amnesty to people who haven't been waiting a long time for legal entry might, just might, be evidence of flaws in the legal procedure.

If people are frustrated, as they should be, by the fact that some eligible immigrants have been waiting for citizenship for as many as 28 years, then by all means, fix that problem. Streamline the process for legal immigration. But don't blame that red-tape nightmare on the millions of low-wage illegals already here, who form a very different (and vastly more populous) group.

The two procedures cannot be tweaked in isolation. The more onerous the legal admission procedures are, the larger is the pool of potential illegal migrants, and under some circumstances that pool will be more skewed toward people with desirable skills. To some extent, that phenomenon appears present in Beardstown.

Economic anxiety animates much of the resistance to amnesty, particularly from the left. Real wages have been stagnant for nearly three decades throughout the U.S., and for a place like working-class Beardstown, having to deal with a huge new influx of Spanish-speaking workers seems like adding insult to economic injury. But if times are tough in rural America, are illegal immigrants to blame? It turns out that the truly good jobs left Beardstown long before the Mexicans came. In the mid-'80s, the Cargill plant was owned by Oscar Mayer. [Beardstown mayor Bob] Walters was the union representative at the plant back then, and he says it offered good jobs and good benefits, but globalization and other corporate pressures caught up with them. The company shuttered and sold the plant in 1987. Five months later, it reopened under a new owner, with lower wages and fewer benefits. "The starting wage went from $11 an hour to $7.50," says Walters. "The meatpacking industry ought to be ashamed of what they did to towns like ours."

The first Hispanics didn't come to work at Cargill en masse until years later. And as Cargill likes to point out, more white workers work at the factory than before. The plant has in fact grown, thanks in large part to hardworking migrants, not just from Mexico but from more than 20 other countries. The business seems robust for the time being. The workforce is unionized again. Salaries are creeping up. A new Wal-Mart Supercenter is on the way. Cargill's strength has turned Beardstown into, if not a boomtown, at least a place that investors are paying attention to. And the town is leading its pitch with the fact that it has a large Hispanic workforce, a bellwether for economic growth. "That's all I need to tell them," says Steve Twaddle, the county's director of economic development. "Businesses understand."

There is some work on the economics of de facto amnesty in Arye Hillman and Avi Weiss's A Theory of Permissible Illegal Immigration in European Journal of Political Economy. I'll quote the abstract at length.

In many countries laws are not enforced against visibly present illegal immigrants. The visibly present illegal immigrants also tend to be concentrated in particular sectors. We explain such permissible illegal immigration in an endogenous-policy model where selective sector-specific illegality transforms illegal immigrants from non-sectorally specialized to sector-specific factors of production. Under initial conditions where no immigrants are present, the median voter opposes immigration. When, however, a population of illegal immigrants has accumulated, ongoing illegal immigration becomes an endogenous equilibrium policy, at the same time that a majority of voters opposes legal immigration and opposes amnesty that would legalize the immigrants' presence. We also establish a basis for domestic voters preferring that illegal immigrants be employed in service rather than traded-goods sectors.

And perhaps the fear of deportation combined with occasional amnesty fine-tunes the mix of workers.

Cargill has long struggled to rid its rolls of illegal workers who are using false documentation. Most notably, a rumor that another raid was imminent swept through the night shift last month. Those workers who had false papers had to make a decision: stay and risk detention and deportation if the rumor were true, or leave and expose themselves as illegal workers. Cargill wouldn't comment on the incident, but locals say that dozens fled the plant that night and were fired or quit after having outed themselves by leaving.

The technical details of a potentially optimal policy that combines sanction with amnesty appear here. The article also raises the possibility that the availability of cheap immigrant labor biases technical change.

It is not easy to replace them. Meatpacking is a hard job at any salary. There's plenty of new technology in the meatpacking industry, but no machine has yet been invented to take over some of the toughest positions, like the role of gut snatcher, whose sole job is to tug the offal out of each freshly killed hog that comes down the line.

Perhaps because there's no incentive to do so? At one time, the job of laying railroad track was very hard, and a form of immigration amnesty made possible the crew of eight Irish rail haulers and several hundred Chinese laborers that still hold the record for track laid in a day. Today, there are machines that will replace the track underneath the repair train. Given the right set of input prices, there well might be a machine that starts with a freshly killed hog and turns out sausage casings, chitlins, and fertilizer. (On the other hand, some of the meatpacking machinery now in use has permitted the replacement of the boner, at one time a skilled trade, with special machine operators possessing fewer specific skills.)

The article also suggests that immigration amnesty is not "rewarding lawbreakers."

U.S. jurisprudence has in fact always been a series of hedged bets, weighing the potential harm of a violation against the costs of enforcement. That's why people get arrested for assault but not for jaywalking. It's time to think seriously about exactly where the act of illegal immigration lies in the spectrum of criminality. Consider the complicity of U.S. employers ranging from multinational corporations to suburbanites looking for gardeners. Factor in the mixed signals that lax law enforcement sent to would-be immigrants throughout the '80s and '90s, and the crime should rank as a misdemeanor, not a felony. Even if we step up border enforcement in the future--as we should--it is true that for a long time, crossing the Rio Grande was akin more to jaywalking than breaking and entering.

Sure, there is a very real national-security threat in having a porous border. But a large--if unquantifiable--percentage of the people crossing that line illegally are not newcomers but rather people who have already established lives in the U.S. and would qualify for amnesty. If they were legalized and free to circulate, we could concentrate on the serious criminals and terrorists crossing the border, not a worker going back to his family.

In Beardstown, amnesty would also help authorities tackle crime. Right now, they spend a lot of their energy sorting out who is who in the community because illegals present local police with a bewildering maze of identities. The illegals of Beardstown work under one name and go to church under another. Parents give their kindergartners fake names to use in school. "We are absolutely unable to identify our own people," says Walters. It sounds counterintuitive, but with immigration, forgiving a crime may be the best way to restore law and order.

There are two different approaches one can take to the use of amnesty. The one that the columnist calls "counterintuitive" is in fact the long-standing tradition of a theft amnesty. (Libraries sometimes recover long-missing items from their collections by declaring a fine amnesty. Many borrowers simply hold onto the book rather than incure an increasing fine, but their sin is one of omitting to pass by the library in time rather than of committing to expand their own library on the cheap.) The second, which Gil Epstein and Avi Weiss address in their "Theory of Immigration Amnesties," (you need calculus to understand it) releases law enforcement officers from disentangling phony papers among the current cohort of gut-snatchers so as better to capture the terrorists and drug-runners endeavoring to sneak in. Whether the 1986 immigration reform failed to commit those additional resources to securing the borders remains an open question.

A popular reading of recent history holds that the amnesty of 1986, which offered a path to citizenship for 3 million illegals, sparked the much larger wave of unlawful immigration that followed. According to that logic, the '86 amnesty showed would-be migrants from around the world that the U.S. was weak-willed and would eventually relent and give citizenship to its illegals. Duly encouraged, Mexicans and others stormed our borders with unprecedented vigor.

Illegal immigration did soar, but that's not why. Studies show that the valleys and peaks in migration have depended far less on changes in policy or policing and far more on the basic economic conditions in the U.S. and Mexico. If you want to truly tamp down illegal immigration, you could induce a recession in the U.S. A better idea might be to help Mexico create more jobs that pay better. A recent Council on Foreign Relations study found that when Mexican wages drop 10% relative to U.S. wages, attempts to cross the border illegally rise 6%. As complex and corrupt as the Mexican economy is, we ignore it at our peril.

While Mexico patches itself up, at least the security options are better today than in 1986. There is both the political will and the technology to make enforcement a serious part of any amnesty plan. National ID cards, real employer verification, high-tech border controls can all aid in making sure that this would be the last amnesty of this size.

Perhaps so. But there's no reason to rule out all future amnesties, as the cheap-labor subsidy and the self-identification of future taxpayers in the underground economy does not go away. And a "national ID card" is not something to be lightly contemplated. Ihre Papieren, bitte.

AN INCENTIVE TO KEEP RESEARCHING. A Fred Barnes post-mortem in Weekly Standard offers an observation about immigration policy.

Already the wails of the immigration restrictionists are rising, insisting Republicans lost because they weren't tough on keeping illegal border-crossers out. Not true. The test was in Arizona, where two of the noisiest border hawks, Representatives J.D. Hayworth and Randy Graf, lost House seats. Graf lost in a seat along the Mexican border, where illegal immigrants flock.

What Americans want is a full-blown solution to the immigration crisis. And that will come only when Republicans come together on a "comprehensive" measure that not only secures the border but also provides a way for illegals in the United States to work their way to citizenship and establishes a temporary worker program. If Republicans don't grab this issue, Democrats will.

Watch the sequencing of events. If the regularization precedes the toughened border measures, we may be witnessing a substitution of resources within the host country so as to preclude additional (undesirable) illegal immigration, as modeled by Hillman and Weiss in the European Journal of Political Economy. If the toughened border measures precede the regularization, the point of those measures might be to fine tune the flow of desirable illegal immigration, as argued by Karlson and Katz in Economics Letters.