New Book Says Immigration Has Varied Effects on U.S. Economy

An in-depth look at immigration and its impact on America's economy is the focus of a new book written by a University of Illinois at Chicago economist.

"The Economics of Immigration" (Edward Elgar Publishing Ltd., 2005) by Barry R. Chiswick, distinguished professor and head of economics at UIC, explores why immigrants move, their labor market adjustment in the destination country, the economic impact they have on their destination, and immigration policy.

The book, organized into five sections, consists of 16 widely cited papers Chiswick published over a span of 25 years. The book begins with a foreward by Nobel Prize-winning economist Gary Becker.

"What I've tried to do is to identify my most important work," said Chiswick, a former senior staff economist at the Council of Economic Advisers under presidents Nixon and Ford.

According to statistics cited by Chiswick, one in every eight people currently residing in the United States was born outside the country, whereas in 1970, it was less than one in 20. And the foreign-born share of the population can be expected to increase in the coming decades, Chiswick says, because all indications are that the pressures and incentives for people to migrate to the United States are on the rise.

The issue of who is helped and harmed by the increases in the foreign-born population has to be addressed by looking at specific skill levels, Chiswick said.

"What we have seen over time in the United States has been a large increase in the number of very high-skilled immigrants," Chiswick explained. "We've also seen a relatively larger increase in the number of very low-skilled immigrants. This has had an effect on income distribution among the native-born workers."

According to Chiswick, lower-skilled American workers have been hurt the worst over the last 25 years. The enormous growth of low-skilled immigration has had a negative effect on the wages and employment opportunities of low-skilled Americans.

But the news is better for high-skilled American workers.

The economic position of high-skilled American workers has improved due to the information technology revolution, economic globalization and the increase in low-skilled immigration. An increase in the number of low-skilled immigrants in low-paying jobs allows high-skilled workers to buy their services at cheaper prices.

What is interesting, Chiswick said, is that most people who talk about immigration tend to focus on one side of the skill distribution or the other, or simply ignore the issue of skills, resulting in poorly informed economic policy.

"We need to consider the entire distribution -- high-skilled and low-skilled workers -- and the impact on the various segments of the population in the United States to understand the consequences of immigration," he said.

When looking at immigration policy, Chiswick thinks the relevant questions should be, "What sort of immigrants, with what sort of characteristics, enhance the American economy -- and which would have a negative net effect?

"If our policy objective is to enhance the economic well-being of low-skilled Americans, one policy instrument would be to reduce the number of low-skilled immigrants," he said. "I think enhancing the economic well-being of low-skilled people who are already in the country is something that is desirable."

Chiswick, who lives in Evanston, has been on the UIC faculty since 1978. He has frequently testified before Congress on pending legislation.

His academic specialties include labor economics, the economics of minorities and income distribution. He is also recognized for seminal research on the economics of language.

UIC ranks among the nation's top 50 universities in federal research funding and is Chicago's largest university with 25,000 students, 12,000 faculty and staff, 15 colleges and the state's major public medical center. A hallmark of the campus is the Great Cities Commitment, through which UIC faculty, students and staff engage with community, corporate, foundation and government partners in hundreds of programs to improve the quality of life in metropolitan areas around the world.

For more information about UIC, visit http://www.uic.edu