Economists are gaining more understanding of how immigration impacts the economy through examining workforce datasets, Nobel Prize-winning labor economist David Card said at a Gonzaga University event Wednesday.
“Often, these datasets are created from tax basis records, allowing you to look at who is working at what firm and who your co-workers are,” Card said, adding the data has exciting possibilities. “And a lot of that work has already been done in other countries and is starting to come to the United States.”
Card was a keynote speaker at an annual economics symposium hosted by Gonzaga University’s School of Business Administration. The event was held at the Davenport Grand Hotel.
Card, professor of economics at the University of California, Berkeley, won a 2021 Nobel Memorial Prize in Economic Sciences for his “empirical contributions to labor economics.” He is also Gonzaga’s Jundt Visiting Chair of Economics and director of the Labor Studies Program at the National Bureau of Economic Research.
Card has developed statistical methods to better understand key issues in labor markets, including studying the effects of minimum wage laws, immigration, income inequality, and poverty.
A significant amount of research by economists has focused on whether immigration affects wages of U.S. natives in particular job sectors. Most economists have “largely come to the view that immigration is a relatively benign and, in some cases, possibly a positive thing for most countries,” Card said.
“I’m going to argue that my view is that literature has really shown that there’s a range of some modest, positive effects associated with integration. … My view is that the costs of immigration that people feared have turned out to be, if anything, smaller than anyone thought,” Card said.
Card pointed out larger countries do not necessarily have lower incomes. Larger cities in the U.S. tend to have higher-than-average wages, and many countries such as Canada and Australia aim to promote population growth and immigration.
In some respects, the United States still does encourage immigration. Policies allow graduate students from other countries to study and work in the U.S., he said.
In the national labor market, immigrants make up 50% of those with fewer than eight years of education. For those with doctorate-level degrees, immigrants make up 22% of the labor market. About 16% of immigrants in the U.S. workforce have 12 to 13 years of education.
“The overall population of American workers is concentrated in the middle, and we’re kind of filling it out,” he said. “The way I describe it is our immigrant workforce is sort of a combination of janitors and doctors … if you go to a hospital, you’ll see the people cleaning the floors and the people doing the surgery are very often immigrants. All the patients are native.”
Immigration policy has been tightening consistently across countries, especially in the U.S. and Europe, he said.
Card and two colleagues, Ian Preston and Christian Dustmann, surveyed people for the European Social Survey, asking them about economic and “compositional” concerns about immigration and its impact to the labor market.
Some of the compositional questions included asking survey participants their view on if their country should stop immigration to reduce social tension or whether they agree or disagree that immigrants take away jobs from natives.
“I think that’s a really key and simple insight. It really says that the main reason why many people are worried about immigration, potentially post-immigration, is not really about these labor market impacts or even impacts on taxes or government revenue, but about this other sort of compositional set of concerns,” he said.
Card, Preston and Dustmann are proposing to include the compositional questions in next year’s European Social Survey to see if answers differ, he said.
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