The Era of Massive Low-Skilled Immigration May Already Be Over

Wall Street Journal 

By Ben Leubsdorf

March 23, 2017

The Era of Massive Low-Skilled Immigration May Already Be Over 

The flow of foreign workers without a college education into the U.S. is likely to dwindle in the coming decades due to demographic and other forces, new research suggests, even if President Donald Trump doesn’t carry out his pledge to build a wall on the southern border.

“Because U.S. neighbors to the south are today experiencing much slower labor-supply growth, the future immigration of young low-skilled labor looks set to decline rapidly, whether or not more-draconian policies to control U.S. immigration are implemented,” wrote University of California, San Diego, economists Gordon Hanson, Chen Liu and Craig McIntosh in a paper being presented Thursday at the Brookings Institution during the Washington think tank’s biannual economics-research conference.

Today’s political debate over immigration policy “has something of an anachronistic feel to it,” the economists wrote. “The dilemma facing the United States is not so much how to arrest massive increases in the supply of foreign labor, but rather how to prepare for a lower-immigration future.”

About 13.5% of the U.S. population is foreign-born, according to the Migration Policy Institute, a level last seen about a century ago and reflecting the immigration surge in recent decades.

That includes illegal immigration. The number of undocumented immigrants rose steadily in the 1990s and early 2000s, peaking in 2007 at an estimated 12.2 million, according to the Pew Research Center. The population shrank during the 2007-09 recession and has been stable for several years; Pew last year estimated there were about 11.1 million illegal immigrants in the U.S. in 2014.

Did the recession cause a temporary slowdown in immigration that will reverse as the economy recovers? Mr. Hanson and his colleagues think something more is going on.

Their paper focused on low-skilled immigrants, defined as foreign-born residents without college education. Most are from Latin America and the Caribbean and many work in construction, restaurant, personal-services and agriculture jobs.

The forces that drove decades of rising low-skilled immigration have now shifted, the economists said. Their analysis found that “since 2007, relatively slow U.S. income growth and rapid growth in neighboring countries has compressed the income gap between the United States and migration-sending nations, presumably weakening incentives for immigration.” They also found a “massive buildup” in U.S. enforcement efforts likely discouraged illegal immigration.

The most important change, they wrote, was demographic: The U.S. baby boom that ended in the early 1960s continued for an additional two decades in Latin America, creating pressure from the 1980s onward for workers to migrate to the U.S. from countries like Mexico. Fertility rates in those countries declined after the late 1970s, so the 2007-09 recession “may have merely advanced forward in time an inevitable reduction in low-skilled immigration,” the economists wrote.

“Given the strong role that demographic factors play in our estimation model, convergence in fertility rates across the Americas removes a powerful factor pushing workers across borders,” they declared. “We find little support for the idea that Latin American immigration will surge again as the U.S. economy recovers.”

Still, the economists concluded that nothing is certain and large-scale immigration might restart if, for instance, “increased economic or political instability” pushed more workers to leave Mexico and other nations for the comparative prosperity and stability of the U.S.

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