Immigration and liberty

One of the areas of legitimate discussion amoung libertarians (and all groups, I suppose) is the attitude toward immigration. There are any number of formal an informal institutions that develop that shape immigration - Benjamin Friedman in The Moral Consequences of Growth presents an interesting thesis that the short term attitude toward immigration and immigrants is shaped by both the level and health of economic activity and the perception of agents within the society regarding their relative position in the economy.

Voluntary exchange and processes are generally positive sum while contraints on the ability to use ones' own knowledge for ones' own aims in the absence of coercion generate perverse are negative sum and lead to unintended consequences and, due to the path dependent nature of change, long term threats to liberty and freedom, expansion of the state (the enforcement mechanism for limits on freedom) and reinforce the intolerance that undermines a civil society.

Tyler Cowen writes persuasively about this issue (Oct. 31 NY Times):

How Immigrants Create More JobsBy TYLER COWEN
Published: October 30, 2010

The campaign season now drawing to a close, immigration and globalization have often been described as economic threats. The truth, however, is more complex.

Over all, it turns out that the continuing arrival of immigrants to American shores is encouraging business activity here, thereby producing more jobs, according to a new study. Its authors argue that the easier it is to find cheap immigrant labor at home, the less likely that production will relocate offshore.

The study, “Immigration, Offshoring and American Jobs,” was written by two economics professors — Gianmarco I. P. Ottaviano of Bocconi University in Italy and Giovanni Peri of the University of California, Davis — along with Greg C. Wright, a Ph.D. candidate at Davis.

The study notes that when companies move production offshore, they pull away not only low-wage jobs but also many related jobs, which can include high-skilled managers, tech repairmen and others. But hiring immigrants even for low-wage jobs helps keep many kinds of jobs in the United States, the authors say. In fact, when immigration is rising as a share of employment in an economic sector, offshoring tends to be falling, and vice versa, the study found.

In other words, immigrants may be competing more with offshored workers than with other laborers in America.



The study referred to above:

http://papers.nber.org/papers/w16439

Immigration, Offshoring and American Jobs
Gianmarco I.P. Ottaviano, Giovanni Peri, Greg C. Wright
NBER Working Paper No. 16439
Issued in October 2010
NBER Program(s): ITI LS


How many "American jobs" have U.S.-born workers lost due to immigration and offshoring? Or, alternatively, is it possible that immigration and offshoring, by promoting cost-savings and enhanced efficiency in firms, have spurred the creation of jobs for U.S. natives? We consider a multi-sector version of the Grossman and Rossi-Hansberg (2008) model with a continuum of tasks in each sector and we augment it to include immigrants with heterogeneous productivity in tasks. We use this model to jointly analyze the impact of a reduction in the costs of offshoring and of the costs of immigrating to the U.S. The model predicts that while cheaper offshoring reduces the share of natives among less skilled workers, cheaper immigration does not, but rather reduces the share of offshored jobs instead. Moreover, since both phenomena have a positive "cost-savings" effect they may leave unaffected, or even increase, total native employment of less skilled workers. Our model also predicts that offshoring will push natives toward jobs that are more intensive in communication-interactive skills and away from those that are manual and routine intensive. We test the predictions of the model on data for 58 U.S. manufacturing industries over the period 2000-2007 and find evidence in favor of a positive productivity effect such that immigration has a positive net effect on native employment while offshoring has no effect on it. We also find some evidence that offshoring has pushed natives toward more communication-intensive tasks while it has pushed immigrants away from them.