(The link from prominent blog type…)
If I had Giovanni Peri here at hand, I think that he would say that increased immigration is very good for new migrants, good for savers worldwide, good for native-born workers, good for previous immigrants who have substantially assimilated–social knowledge, English proficiency, et cetera–and probably bad for previous immigrants who have no assimilated. And he would also say that the model goes haywire and is untrustworthy when the number of non-assimilated immigrants is small, and that that going haywire is where the very large income losses for previous migrants is coming from.
And, of course, the thing to object to in the turn this entire debate has taken has been the failure to focus evenly on the consequences for all stakeholders in global migration–look at what happens to everyone, not just one particular group that is convenient for your current political position.
But I will ask him.
From what I can tell, Peri paper shows that because native born workers and immigrant workers are compliments (i.e. working together they produce more than the sum of their individual production), immigrants can help or at least not harm native workers. He hasn’t said anything about “savers worldwide” or “immigrants who have substantially assimilated.” His innovation was to think of workers as compliments not substitutes and he says nothing about the welfare effects of “all stakeholders in global migration.” I’m not sure were Brad is getting all this, but its not Peri’s paper.
Peri has shown complementarities existed. He didn’t identify the source of that complementarity. Maybe the industries immigrants moved into during the period of Peri’s study (1990-2004), like construction, were especially amenable to this happy division of labor. There was a housing boom, if I recall. Maybe the conditions that produced Peri’s counterintuitive result no longer hold. We keep hearing the housing bust is just around the corner.
Or maybe all the complementarities are “used up.” Industries have found all the ways, given the current stock of native born, to split jobs between natives and immigrants to exploit the division of labor.
I’m not trying to take away from the Professor’s paper and politically his results support my position on immigration. Its just not clear to me how Brad DeLong is reading so much into Peri’s paper.
DeLong’s post really makes me angry (its not the first time and by now I should be used to it, but still). Its fine for journalists or lay folk to misrepresent empirical results, everybody knows science reporting sucks. This is different. DeLong is an economist at a prestigious institution. Why is he treating Peri’s results like they’re simply arguments in a political discourse? Would he want me to claim his paper on despots and growth is an argument for the Iraq War? I doubt it.
Are we doing science here or are we just giving ammunition to political causes?