Tuesday, January 31, 2012
At a recent debate in Florida, Republican candidate Mitt Romney suggested that the solution to the problem of undocumented immigration is to make it so difficult for undocumented people to get a job and remain in the United States that they will “self-deport.” Romney’s idea comes from a simple, though flawed, line of reasoning that was first proposed by restriction advocates in the legal community. The reasoning is that individuals will act in a “rational” manner which means that they will calculate the benefits of staying in the United States against the new, increased cost resulting from intensified enforcement and employment restrictions. The calculation goes something like this: I now make $7 an hour washing dishes. With these new measures, it is likely that I will lose my job and also likely that I will be caught at a traffic stop, arrested, maybe imprisoned for a time, and then deported. This is not a good bet to take, so I better “self-deport.”
As you may have noticed, there are three basic assumptions at play here. To make rational analysis work, first, we must assume that people’s response to risk is fixed, and second that they generally tolerate only small risks. Finally, the theory of rationality assumes that individuals disregard sunk costs. Sunk costs are the investments that a person has already made: in the case of the immigrant, “sunk costs” reflect the home she has made and other assets she has accumulated, not to mention the family and community ties. If individuals are intolerant to risk and willing to disregard “sunk costs,” then “self-deportation” would be a preferred response to intensified enforcement.
If only humans behaved in the way expected by rational economic logic, Mr. Romney would have an effective, if harsh and inhumane, policy. However, research in behavioral economics exposes the faults in the logic of “self-deportation.” Through a series of experiments, scientists have determined that people do not seek to maximize what they have. Rather, humans are concerned about positive and negative change in assets from a specific reference point known as “the status quo.” In essence, our happiness is reflected in winning and losing not in how much we have.
Because people care most about change in assets not about the absolute value of their assets, they worry about avoiding losses not achieving maximum wealth. The experiments also suggest that when people expect losses from their current position, they tend to take on risks that otherwise they would not. The economic logic requires that people are risk averse asset maximizers; the human logic suggests that people tend to accept more and more risk in hopes of avoiding setbacks.
The first implication of these findings is that humans do take into account “sunk costs” when making decisions. In the case of the undocumented immigrant, this means that what she stands to lose by leaving the U.S. will weigh heavily on her decisions. The second implication of the behavioral theory is that when faced with tighter enforcement and employer penalties, immigrants will take on more risk in order to not lose their lives in the United States. This suggests that people will go deeper underground, rely more on the private economy and accept more exploitation. Behavioral economics thus tells us that “self-deportation” as a result of intensified enforcement will be marginal and surely not proportionate to the financial cost to states.
Empirically, we already know the limited effectiveness of restrictions from the failure of earlier attempts such as California’s Proposition 187. We also know it from history and sociology: many persecuted people did not seek to leave their homes in the face of major restrictions. Most people don’t leave their homes just because they are poor or getting poorer. If they did, international migration flows would be much larger than they are today. It takes mass violence and organized removal, as in the case of Nazi Germany, 15th century Spain, or the Balkans in the 1920s for large numbers of people to seek exit.
What intensified enforcement will produce is not an exodus to the border. Instead, it will create a permanent underclass of scared immigrant families with bleak opportunities and no access to justice. An enforcement-based response to the problem of undocumented immigration will not be effective except at the margins. Behavioral economics tells us as much. But it will be inhumane and unjust, inconsistent with the founding principles of this country.