Will Immigration Save America?

Adapted from my opening statement at last week's UATX debate with Bryan Caplan

No, immigration will not save America, because America won’t choose the kind of massive, high-skilled immigration policy that could save it.

If, hypothetically, America did want to save itself through good immigration policy, what would that look like?

It would require a mass migration big enough, and skill-focused enough, to raise average American IQ by 3 to 6 points. That requires a lot of people, not just a few Nobel Prize winners: on the order of 100 million immigrants with skills at least a standard deviation (e.g., 15 IQ points) above the current US average. That’s proportionately bigger than—maybe twice as big as—America’s first great age of migration.

That wouldn’t just boost American productivity by 18% to 36% (there’s a 6x social multiplier on IQ, by the way). It’d also improve America’s long-run fiscal health, it would import better, smarter voters and better, smarter future bureaucrats—creating a gloriously great replacement—and improve American innovation. Together, all those changes would amount to saving America.

A smaller version of this gloriously great replacement already happened before, during that first age of mass migration to the US, 1865 to 1924. That wave of immigration reduced the fraction of historically disadvantaged peoples and raised the fraction of historically advantaged peoples in the USA. The estimates from Comin, Easterly, and Gong’s “Was the Wealth of Nations Determined in 1000 BC?” can be used to suggest what that did to US income per person: it probably made the typical American 6% to 9% richer.

If America wanted to save itself through high-skilled immigration, how should it go about it? Yes, America could just use SAT and GRE scores as strong filters in a better points-based immigration system to add 100 million better Americans—but America can do better than that.

A good immigration policy doesn’t just look at your resume; it looks at your nation’s resume. Why? Because you can fake your resume, but you can’t fake your country’s resume—and the apple doesn’t fall too far from the family tree, especially in the second generation.

This is key to my view of immigration: that we should focus on the very long run, on how second- and third-generation immigrants turn out. And here, the wise words of Harvard’s Alesina and UCLA’s Giuliano from 2010 should be engraved on our hearts:

Cultural values are persistent; when immigrants move to a place with different institutions, overwhelmingly their cultural values change gradually, if ever, but rarely within two generations.

My favorite version of this, because nobody can argue with it, is the cultural transmission of savings rates. People import much of their savings behavior from their ancestral countries of origin: there are high-savings cultures and low-savings cultures, and on average people import those attitudes and behaviors to their new homes and pass them on to their children. Jason Richwine of the Center for Immigration Studies found that in the US, for example, American-born Chinese Americans have about 3x the retirement savings of American-born Haitian Americans, and second-generation South Korean-Americans save about 6x as much as second-generation Salvadoran-Americans.

That means less need for welfare spending for people from high-savings countries. But more importantly, it is one of many signs that some cultures are just more patient than others. And America should import patient people—people who give thought for the morrow, who do better at planning for the future. They’ll usually be better at life.

This kind of culture transplant—where second-generation immigrants are a lot like people back home, for better or worse—has been found not just for savings rates but for women’s labor choices, for self-reliance versus reliance on government, for whether you think strangers can be trusted, and for much else. The apple doesn’t fall too far from the country of origin’s tree, so a smart nation would use that information in building a good immigration policy.

The downside of getting immigration policy wrong is huge—historically disadvantaged peoples tend to spread that disadvantage around, alas. Consider the wise words of Bryan Caplan from 2012:

Imagine if immigrants all carried bubonic plague. As soon as plague-infested immigrants moved to an area, natives would flee in terror, and local real estate prices would plummet.

That’s exactly what happened in the UK, according to Filipa Sá in the Economic Journal in 2015: every 1% increase in recent low-education immigrants caused a 1.7% fall in home prices—more than one for one. A 20% rise in disadvantaged immigrants, then, causes home prices to plummet by around 30%: that’s a Caplanian plague. And the Caplanian plague can happen in America too: famed immigration researcher Leah Boustan of Yale found a similar result in “Was Postwar Suburbanization ‘White Flight’? Evidence from the Black Migration,” QJE 2010. Boustan reported that “each black arrival [to Northern cities from the South] led to 2.7 white departures.”

In the US case, why were so many people departing from high-immigration neighborhoods? Princeton’s Ellora Derenoncourt, in her work “Can You Move to Opportunity? Evidence from the Great Migration,” found that the same 20th-century wave of African-American migration studied by Boustan caused higher murder rates, higher police spending, and higher incarceration rates in Northern cities.

That kind of decline in quality of life for native residents obviously makes those neighborhoods less productive. It is little surprise that the effects of the Caplanian plague show up in both falling home prices and the outmigration of natives. While most people expect a rise in immigration to boost housing demand, these waves of low-skilled migration to the UK and the US North caused declines in housing demand, a sign that natives were responding to a Caplanian plague.

I’ll close with a line motivated by Bryan Caplan’s excellent 2007 book, The Myth of the Rational Voter: choose your future neighbors wisely, because in a democracy, your future neighbors are your future rulers.