Tag: Econ 271

The Continuing Debate on Immigration & Wages

I was surprised and pleased at the level of interest and quality of discussion surrounding U.S. immigration policy in my public economics course last term. I was reminded of this when I saw one of the most prominent scholars in this area, George Borjas, has revived his LaborEcon blog.

Borjas is noted for, among other things, his work on the wage effects of the Mariel boatlift, when Fidel Castro sent thousands of unskilled Cuban immigrants to the shores of Miami in 1980.  In September, he circulated a National Bureau of Economics Research Working paper, “The Wage Impact of the Marielitos: A Reappraisal,” that he describes thusly:

At least in my corner of the universe, it created a disturbance in the force reminiscent of the destruction of Alderaan…

There are a couple of excellent summaries of what is going on, including David Frum’s “The Great Immigration Data Debate,” and Noah Smith’s more provocatively titled “An Immigrant Won’t Steal Your Raise.” Here is a summary of Smith’s summary:

The most important and widely cited such study is a 1990 paper by economist David Card… Standard Econ 101 theory says that a big increase in labor supply should reduce wages for local workers,… [b]ut Card found something startling: the negative impact on native Miamians was negligible. Neither wages nor employment fell by a measurable amount…

But in 2015, George Borjas of Harvard University’s Kennedy School came out with a shocking claim — the celebrated Card result, he declared, was completely wrong…

Now, in relatively short order, Borjas’ startling claim has been effectively debunked…

Borjas responded quickly and forcefully with the equally provocatively titled “Lies, Damned Lies, and Immigration Statistics.”

This is certainly a spirited debate, and given the topic’s import for the 2016 elections, one worth paying attention to.

The New New Regulatory State

Earlier this week, President Obama penned an op-ed in the Wall Street Journal about his Administration’s plans for the regulatory state.  The executive branch, as its title suggests, is in charge of executing and administering the laws of the land, and the President expresses his desire to balance the free-market innovation machine while protecting public health and safety:

[C]reating a 21st-century regulatory system is about more than which rules to add and which rules to subtract. As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices. And it means making sure the government does more of its work online, just like companies are doing.

As my students learn in 240, 280, and 271, the executive branch, through the Office of Management and Budget, (potentially) plays a central role in shaping regulations as they make their way through the rulemaking process.  Indeed, President Reagan issued the seminal executive order concerning benefit-cost analysis, and each President since has attempted to put his stamp on the process.

Of course, there is often a disconnect between what politicians say and what regulators actually do, here are a couple of other takes from a pair of scholars who spend more than their fair share of time thinking about administrative regulation: Stuart Shapiro and Lynne Kiesling.