Illegal Migration: Lecture 5

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Illegal Migration Lecture 5

• Gordon H. Hanson
• UCSD and NBER

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Introduction

• What weve done so far
• Scale, selection and sorting in international
  migration
• Labor markets impacts of emigration and
  immigration
• Public finance consequences of international
  labor flows
• Todays lecture
• Illegal migration

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Introduction

• One morning in San Diego
• As neighborhood residents depart for work,
  illegal immigrants arrive to mow lawns, clean
  homes, care for children, and build houses
• Down the road, they prepare restaurant meals,
  clean hotels, harvest crops, assemble apparel,
  and process food
• What is exceptional about this scene is not that
  it happens in CA (or FL, TX or NY) but that it is
  repeated in Las Vegas NV, Little Rock AR, Atlanta
  GA, Detroit MI, and cities throughout Europe
• Illegal immigrants are an integral part of the US
  economy
• With a population of 10 million, 6-8 million of
  whom work, illegal immigrants are no longer a
  marginal segment of the US labor force
• Gone are days when illegal laborers were confined
  to farms theyre now a part of US construction,
  service and manufacturing industries

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Legal status of US immigrants, 2005
Legal Permanent Resident Aliens 10.5
million (28)
Unauthorized Migrants 11.1 million (30)
Temporary Legal Residents 1.3 million (3)
Naturalized Citizens 11.5 million (31)
Refugee Arrivals 2.6 million (7)
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Introduction

• Mexico is the main source country for US illegal
  immigration
• In 2006, the 11.5 million Mexican immigrants in
  US were 31 of US foreign-born population and
  10 of total population of Mexico
• Of Mexican immigrants in the US, 6 million appear
  to be here illegally
• 56 of Mexican immigrants are illegal, compared
  to 17 of those from other countries (Mexico
  accounts for 57 of all US illegal immigrants)
• Policy issues
• US Give amnesty to illegal immigrants? Admit
  more guest workers? Militarize US borders? Deny
  benefits to illegals? Issue national ID cards?
• Mexico Loss in labor supply, disappearance of
  young men in many regions, rise in remittances,
  easing of pressure on policy makers to make hard
  choices
• In this lecture, I review academic literature on
• Stocks and flows of illegal migrants
• The supply of and demand for illegal migrants
• Policies to regulate illegal immigration

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Measuring Illegal Immigration

• Most common measure is the residual foreign born
• Enumerated immigrants (legal immigrants
  departures deaths)
• Specialized surveys
• Mexican Migration Project (1982, 1987-1997)
• Household survey conducted in winter months in
  several dozen high-migration rural communities in
  western Mexico
• In each community, MMP surveyed a random sample
  of households (not panel data) on current and
  past migration behavior of members
• National Survey of Demographic Dynamics (ENADID
  1992, 1997)
• National survey by Mexican government similar in
  design to the MMP
• Survey of Newly Legalized Persons (1989, 1992)
• Covered illegal immigrants residing in CA granted
  permanent legal residence in US under amnesty
  provision of IRCA
• Other methods (enforcement data from US Border
  Patrol)
• Apprehensions of those attempting illegal entry
  at US-Mexico border

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Estimates of US Illegal-Immigrant Population,
1990-2004
Population of Illegal Immigrants from Mexico in the United States (millions) Population of Illegal Immigrants from Mexico in the United States (millions) Population of Illegal Immigrants from Mexico in the United States (millions) Population of Illegal Immigrants from Mexico in the United States (millions) Population of Illegal Immigrants from Mexico in the United States (millions) Population of Illegal Immigrants from Mexico in the United States (millions)
INS Constanzo et al. Bean et al. (2001a, 2001b) Bean et al. (2001a, 2001b) Bean et al. (2001a, 2001b) Passel
(2001) (2003) Undercount Rate Undercount Rate Undercount Rate (2005)
Year     15 Median 25  
1990 2.040 1.008 -- -- -- --
1996 -- -- 1.524 2.543 3.706 --
2000 4.808 3.872 -- -- -- --
2001 -- -- 3.462 4.510 5.765 --
2002 -- -- -- -- -- 5.300
2003 -- -- -- -- -- --
2004 -- -- -- -- -- 5.900
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Illegal immigrants in the US
Unauthorized Immigrants, millions
Year
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Illegal immigrants by country of birth, 2006
Mexico 6.6 million (57)
All Others 2.9 million (25)
Philippines, Korea, China, and Vietnam
0.9 million (8)
Central America 1.2 million (11)
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Migrant and Non-Migrant Mexican Nationals, Males
Mexico Migration Project, 1989-1991 Mexico Migration Project, 1989-1991 Mexico Migration Project, 1989-1991 Mexico Migration Project, 1989-1991
In Mex. at time of Survey In Mex. at time of Survey In Mex. at time of Survey
    1990 US Census 1990 MX Census 1990 MX Census All Respondents Currently on last migration In US at time of survey 1989 LPS
Percent Male Percent Male 56.2 48.0 48.0 48.7 64.7 55.9 57.2
Years of None 9.6 9.2 9.2 5.2 3.8 2.1 4.0
Schooling 1 to 8 10.3 17.3 17.3 23.4 24.3 15.3 19.7
9 to 15 48.9 35.7 35.7 31.4 28.7 42.8 36.7
16 plus 3.2 7.7 7.7 7.5 1.8 5.6 0.5
Work in Agriculture Work in Agriculture 15.5 23.9 23.9 28.9 31.2 9.1 11.9
Years 0 to 5 28.8 65.6 45.2 36.9 13.9
in US 6 to 10 23.4 14.8 17.3 20.2 19.4
11 to 20 35.7 15.2 28.2 36.3 6.7
  20 plus 12.2     4.5 9.3 6.6 59.9
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Linewatch apprehensions enforcement by US
Border Patrol
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Estimated Attempts at Illegal Entry along
US-Mexico Border
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The Economic Return to Migration

• Who migrates and why?
• Benefit of illegal migration
• Gain in income due to wage differences between US
  and Mexico
• Costs of illegal migration
• Transport to border (small)
• Psychic penalty of leaving home (unmeasureable?)
• Expense of settling in US (not measured)
• Cost of crossing the border (physical, monetary)
• Evidence from fees charged by smugglers (coyotes)
• Selection of migrants
• If benefits and costs vary according to skill,
  wealth, or other individual attributes, then
  migrants will be a self selected group
• Nature of migrant selection matters for impact on
  US and Mexico

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Average Hourly Wages for Mexican Males, 2000
  Years of Schooling Completed Years of Schooling Completed Years of Schooling Completed Years of Schooling Completed  
  Age 0 to 4 5 to 8 9 to 11 12 13 to 15 16
Mexican 18 to 22 7.83 7.60 7.45 8.07 8.76 8.44
Immigrants 23 to 27 8.44 8.19 8.21 9.06 9.53 13.02
in US 28 to 32 8.27 8.56 8.70 9.66 9.56 15.69
(0-3 years) 33 to 37 9.46 9.25 9.34 10.07 11.36 16.84
38 to 42 9.19 9.39 9.33 11.01 12.11 16.26
Residents 18 to 22 1.36 1.56 1.76 2.06 2.61 3.91
of Mexico 23 to 27 1.43 1.80 2.10 2.79 3.77 5.20
28 to 32 1.56 1.93 2.42 3.22 4.80 6.63
33 to 37 1.65 2.08 2.56 3.45 5.25 7.07
38 to 42 1.64 2.14 2.88 3.74 5.62 7.42
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Border Apprehensions and US-Mexico Relative Per
Capita GDP
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Border Apprehensions and Average Wages in Mexico
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Educational Attainment for the Mexico Born
Population, 2000
21-65 Year Olds 21-65 Year Olds   28-37 Year Olds 28-37 Year Olds 28-37 Year Olds
Residents Mex. Imm. Residents Mexican Immigrants in US Mexican Immigrants in US
  of Mexico in US   of Mexico 0-3 Yrs 4 Yrs
Males 0-9 0.694 0.601 0.648 0.538 0.512
Highest
Grade of 10-15 0.193 0.350 0.232 0.399 0.443
Schooling
() 16 0.113 0.050   0.121 0.062 0.046
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Mexican Immigrant Wage Density (counterfactual)
minus Mexican Resident Wage Density (actual) in
1990 and 2000, Males
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Mexican Immigrant Wage Density (counterfactual)
minus Mexican Resident Wage Density (actual) in
1990 and 2000, Females
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Churning in the Illegal Immigrant Population

• Many illegal immigrants do not remain illegal
  forever
• Ultimately, many (one-third?) obtain a US green
  card through sponsorship by a family member who
  is a US citizen or legal resident
• Since queues to obtain a green card are five
  years or longer, many migrate illegally and wait
  for a green card as an illegal immigrant in US
  (during which time they work, settle in
  communities, start families, etc.)
• Evidence
• Many Mexican immigrants who receive green cards
  are at the time they obtain their visas residing
  in US illegally
• From 1992 to 2002, 56 of Mexican nationals
  receiving green cards are adjusting status
  (implying they are already residing in the US)
• Some of those adjusting their visa status are
  temporary legal immigrants who have succeeded in
  obtaining permanent visas
• However, for Mexican immigrants, majority of
  status adjusters appear to have been living in US
  as illegal immigrants

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Migration Rates to US by Mexican States, 1950s
and 1990sIs historical persistence in regional
migration pattern due to presence of migration
networks or US family sponsored immigration
policies?
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Migration Rates to US by Mexican State and
Distance to US
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The railroad connection, 1906
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Braceros en route to the US, 1950s
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The undocumented era, 1964 - present
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Average smugglers fee at US-Mexico border
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US Enforcement Policies and Illegal Immigration

• Illegal immigration
• The US Border Patrol polices US borders,
  apprehends and deports those attempting to enter
  country illegally
• Centerpiece of US policy 12,000 officers police
  border, concentrating on specific points along
  US-Mexico border
• Over the last decade, US enforcement budget has
  increased dramatically (with much of increase
  coming before 9/11)
• Government agents monitor US employers suspected
  of hiring illegal aliens, issue fines to those
  they detect and convict
• Not until 1986 did it become against the law for
  US employers to hire an illegal immigrant
• Employer monitoring is lax, with less than 300
  agents to inspect all US worksites few fines
  levied, most are small
• In practice, US employers are more or less free
  to hire any worker with a social security card
  and a green card without risk of prosecution
  (even if documents are fake)

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Illegal Immigrants Located by US Authorities,
1992-2004
  1992 1994 1996 1998 2000 2002 2004
Total deportable aliens located 1.258 1.095 1.650 1.679 1.815 1.062 1.241
(millions)
Share located by ICE/INS Agents 0.047 0.058 0.061 0.074 0.076 0.101 0.065

Share located by Border Patrol 0.953 0.942 0.939 0.926 0.924 0.899 0.935
Of Border Patrol deportable
aliens located, share that are
Mex. aliens seeking employment 0.888 0.874 0.907 0.899 0.910 0.861 0.860
Mex. aliens at US worksite 0.011 0.013 0.008 0.006 0.002 0.005 0.005
Mex. aliens unspecified 0.076 0.082 0.068 0.073 0.064 0.095 0.070
Other aliens 0.026 0.031 0.017 0.021 0.024 0.039 0.065
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U.S.
Mexico
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Migrants Take More Dangerous Routes Around
Border Patrol Operations
Major Border Patrol Operations
New Migration Routes
SOURCE Cornelius 2005
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Linewatch Enforcement by US Border Patrol Region
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Linewatch Apprehensions by US Border Patrol Region
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Deaths due to unauthorized border crossings
Source Mexican Consulates/Mexican Ministry of
Foreign Relations.
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Enforcement against Illegal Immigration

• Political economy of enforcement
• There is a long history of immigration
  authorities responding to pressure from business
  interests not to enforce too effectively
• Rio Grande Valley of TX, Central Valley of CA,
  onion farmers in GA, meat packing in Great
  Plains, lettuce growers in AZ
• Border enforcement falls 6-10 months after an
  increase in the relative product price in
  labor-intensive industries (apparel, meat
  packing, perishable crops, construction)
• Border Patrol accommodates pressures from
  residents in border cities (by stopping illegal
  immigrants from crossing in their back yards) and
  pressure from industry (by allowing immigrants
  in)
• Enforcement at US worksites has virtually
  disappeared
• From 1993 to 2004, the number of employers fined
  for hiring illegal immigrants fell from 799 to 14
  and the number of fines levied in excess of
  50,000 fell from 30 to 0

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The Supply and Demand for Migrants

• If incomes in US have long exceeded those in
  Mexico, why has Mexico-to-US migration surged
  only recently?
• Changes in the demand for labor
• The demand for labor in Mexico would decrease
  relative to the demand for labor in the US if
• Mexicos productivity or capital supplies
  decreased relative to the US
• Mexicos terms of trade decreased relative to the
  US
• Mexicos economy became more volatile relative to
  the US
• Changes in the supply of labor
• Holding wages constant, Mexico-to-US migration
  would increase if Mexicos supply of labor
  increased relative to the US

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The trajectory of labor supply over time
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Comparing relative changes across countries
Only after peak of baby boom does relative
Mexican growth take off
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Labor demand shocks Post 1980 Mexico slow down
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Labor demand shocks Post 1980 Mexico slow down
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Theory

• US wage is function of labor demand shock and
  labor supply (US population plus immigration
  immigrants less productive t lt 1)
• Mexico wage is function of labor demand shock and
  labor supply (Mexico population minus emigration)
• Current migration is function of lagged wage,
  subject to migration elasticity (0 lt s lt 8) and
  migrant networks (C gt ? gt 0)
• Solution for change in emigrant stock as share of
  Mex. pop.

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Theory

• Linearizing
• Migration is increasing in the initial US-Mexico
  wage differential (increasing in MX labor supply,
  decreasing in MX labor demand)
• Time trajectory of migration depends on
• (1) elasticity of labor demand (given by ? lt 0)
• (2) relative productivity of Mexican immigrants
  in US (given by 1gttgt0)
• (3) network effect (given by ? gt 0)
• If (1)(2) dominate (?(1t?) ? lt 0), emigration
  rate decreases over time as wage effects moderate
  outflow
• If (3) dominates (?(1t?) ? gt 0), emigration
  rate increases over time as network raises
  incentive to go to US

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Specification

• Empirical specification for emigration rate of
  cohort with birth year (i), gender (j), birth
  state (s), in year (t)
• lijs is initial MX-US relative labor supply and
  demand
• xist is subsequent shock to relative labor demand
• A, I, J, S, T are fixed effects for age, birth
  year, gender, birth state, and census year

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Data

• Mexico population census (1960, 1970, 1990, 2000)
• Define cohort as number of individuals born in a
  given year in a given state (base size is first
  time cohort appears in a census)
• Net emigration rate is the intercensal change
  in cohort size
• Measurement issues
• Rounding error (aggregate cohorts around zeroes
  and fives)
• Mortality (use 16-50 year olds age, gender,
  state, birth year FEs)
• Heteroskedasticity (trim tails, vary aggregation
  of cohorts)

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Net emigration

• Estimated share of migrants living in US
• for cohort with birth year (i), gender (j), birth
  state (s) in year (t)
• Measure US cohort size using national labor
  supply
• We implicitly model US low-skilled labor supply
  as function of national labor supply and gender,
  birth-year, time effects
• Problems with using US low-skilled labor supply
  directly
• i) many US natives still in school in key 16-20
  age group, ii) high school completion endogenous
  to immigration, iii) measurement error

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Variation in per capita GDP across states
globalization and the post 1985 divergence in
regional income growth
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Specification

• Empirical specification for emigration rate of
  cohort with birth year (i), gender (j), birth
  state (s), in year (t)
• lijs is initial MX-US relative labor-market
  conditions
• xist is subsequent shock to relative labor demand
• A, I, J, S, T are fixed effects for age, birth
  year, gender, birth state, and census year

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Estimation results
Dependent variable decadal change in net migration rate Men Only Women Only
Dependent variable decadal change in net migration rate IV IV
log (MX State cohort size/US HS dropouts) 0.1876 0.1053
(11.51) (7.54)
log (MX State GDP/US GDP) at age 16 -0.0261 -0.0168
(1.13) (1.01)
10-yr change log(MX State GDP/US GDP) -0.0297 -0.0028
  (0.59) (0.09)
Observations 1124 1134
R-squared 0.25 0.31
Fixed Effects Used State, census yr, Sex, 10yr birth cohort State, census yr, Sex, 10yr birth cohort
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Concluding Discussion

• In the US, illegal immigration now accounts for
  one-third to one-half of net immigrant inflows
• Issue for future research on causes of illegal
  immigration
• Introducing questions about migration status into
  official surveys
• US immigration policy and transitions from
  illegal to legal status
• Sources of heterogeneity in costs and benefits of
  migration
• Effectiveness of border enforcement
• Political economy of immigration policy border
  vs. interior policing