Thursday, March 23, 2017

Demographic Changes in Mexico, Latin America Will Slow Immigration of Young Workers to Zero by 2050, Border Wall Unnecessary, According to New Brookings Research


Gordon Hanson

Immigration to the U.S. of young, low-skilled workers will continue to slow until it reverses in 2050, thanks to weak labor-supply growth in Mexico and other Latin American countries—even without changes to U.S. immigration and border policy, according to a new paper presented today at the Brookings Panel on Economic Activity (BPEA). Instead, a more pressing issue is dealing with the aging population of long-term, undocumented residents who are already here, given that many will lack health insurance and could end up in emergency rooms.

In “Along the Watchtower: The Rise and Fall of U.S. Low-Skilled Immigration,” Gordon Hanson, Chen Liu, and Craig McIntosh of the University of California San Diego find that labor market supply—as opposed to other macroeconomic factors—plays a dominant role in influencing migration patterns from Latin America to the U.S., and that a reversal of labor market supply trends will push the U.S. into an era of far more modest low-skilled, undocumented immigration. At the same time, the population of Latin American-born residents over age 40 in the U.S. will grow by 82 percent over the next 15 years.

From the early 1980s to the mid-2000s, the U.S. experienced a huge wave of low-skilled immigration, due in part to several macroeconomic factors—such as high U.S. incomes, relatively stable U.S. GDP growth, and slow U.S. labor-supply growth—that made immigration attractive to young, low-skilled workers from Mexico and elsewhere in Latin America, the authors note.

However, around the time of the Great Recession, the undocumented population declined by an annual average of 160,000 individuals between 2007-2014. By 2015, 75 percent of low-skilled immigrants had resided in the U.S. for 11 or more years, while the share of the population aged 18 to 33 had dropped to 27 percent. The authors believe that the Great Recession may have simply advanced forward in time a lessening of low-skilled immigration thanks to changing demographic factors. Whereas the U.S. baby boom came to a halt in the early 1960s, Latin America’s baby boom didn’t abate until two decades later. Though the supply of working-age Americans began to slow markedly in the early 1980s, they kept growing in Latin America until the 2000s, creating an incentive for migration that is now disappearing along with the later Latin baby boom. Looking forward, demographic pressures for U.S. immigration are set to weaken significantly; indeed, an easing of pressures is already occurring, the authors find.

In addition to demographic changes reducing incentives for migration, the authors note that there has already been a massive increase in U.S. immigration enforcement. Between 2000 and 2010, the number of U.S. Border Patrol agents policing the U.S.-Mexico border doubled, from 8,600 officers to 17,500 officers, and has since remained at historically high levels. Deportations of non-criminal aliens rose from 116,000 individuals in 2001 to an average of 226,000 individuals per year over 2007-2015.

With demographics, current immigration policy, and other macroeconomic factors working together to slow drastically the growth of unskilled undocumented immigration, the authors argue that policymakers should instead focus on troubling evidence of an aging immigrant population already living in the U.S.

The authors write: “The current U.S. debate about immigration policy has a backward-looking feel to it. The challenge isn’t how to stop large-scale labor inflows, which has largely been achieved, but how to manage a large, settled population of undocumented immigrants. Massive investments in building border barriers or expanding the U.S. Border Patrol are not going to address this challenge.”


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