Global Affairs Expert Webinar: Migration and Labor Economics
Giovanni Peri, the C. Bryan Cameron distinguished professor in international economics and founder and director of the Global Migration Center at University of California, Davis, leads the conversation on migration and labor economics. Edward Alden, senior fellow at CFR, moderates the discussion.
Speakers
Giovanni Peri
C. Bryan Cameron Distinguished Professor in International Economics; Founder and Director, Global Migration Center
University of California, Davis
Presider
Edward Alden
Senior Fellow
Council on Foreign Relations
Transcript
ALDEN: Thanks very much, Emily. And welcome everybody. Welcome to today’s session of the Winter/Spring 2025 Global Affairs Expert Webinar Series. I’m Ted Alden. I’m a senior fellow at the Council on Foreign Relations. I’m a visiting professor at Western Washington University in lovely Bellingham, Washington. And shameless self-promotion, the author of the book over my shoulder—or, coauthor of a new book about the COVID border closures called When the World Closed its Doors: The COVID-19 Tragedy and the Future of Borders. Thank you all for joining us.
I think Emily has already noted today’s discussions on the record. The video and transcript will be available on education.CFR.org. And if you’d like to share the materials with your colleagues or classmates, feel free to do so. As always, CFR takes no institutional positions on matters of policy.
So I’m delighted, all the way from a little town just outside of Rome, to have with us Giovanni Peri to discuss migration and labor economics. I’ll read you his formal background here, but for those of us who follow these issues—I did for many years as a journalist, and now work on them through CFR and in my academic work—Giovanni has been the go-to scholar on issues of trying to understand how immigration affects the U.S. labor market. So I am one of a huge number of people very appreciative for your work in this field. Dr. Peri is the C. Bryan Cameron distinguished professor in international economics and the founder and director of the Global Migration Center at the University of California, Davis. He’s also a research associate at NBER (National Bureau of Economic Research) and was previously coeditor of the Journal of the European Economic Association. He serves on the editorial board of several economics journals. And he is the author of the 2016 book, The Economics of International Migration. So welcome, Giovanni. Thank you so much for coming to speak with us today.
PERI: Thank you, Ted. Such a kind introduction. Too generous.
ALDEN: Thank you. So Giovanni’s got some slides he’s going to share with us. I’ll have a follow up or two, and then we will open it up for questions and discussions. We have a wonderful large group here, so I want to make sure there’s time for everybody to interact with our speaker. So over to you, Giovanni, for an introductory set of slides and comments.
PERI: Great. Thank you very much, Ted.
And I thought that is useful to start with a few facts and a little structure on this economics of immigration, which has a lot of talk sometimes and not a lot of clarity. So, allow me to share the screen and to talk about—a little bit about trends and what economists—what research in economics says about the impact of immigration. So, I will proceed as follows, and will just show you a few slides. But first, I will give you a couple of aggregate trends in terms of foreign-born in the U.S., how many they are, and what has been their evolution.
Then, we’re going to talk a little bit of how economies characterize what impact immigration has in the longer run on income, gross domestic product, which is the measure we have of income created, on productivity, on investment, on wages, and unemployment in the U.S. And then, I will talk a little bit about twenty years up to COVID, what we saw in immigration there, and then the four years after COVID, what we see—what we saw since then on the U.S. economy and labor market.
So the first slide that I want to show, and I want to start a conversation here, is that there are a lot of noise and rumor and data about immigration. But the way in which the presence of foreign-born in the U.S. has changed is illustrated by this graph. This graph shows in millions how many foreign-born, immigrants, of different education level—the education level will be very linked to the type of jobs that immigrants do—how immigrants of different education level have changed from 1970, actually 1960, up to 2000. And then from 2000 up to 2023, which is the last year in which the U.S. Census has a very precise measure of these things.
And the different color are—the red ones are immigrants who don’t have a high school degree. The two dashed are immigrants who have some high school or some college. And the blue are the college educated immigrants. Two things jump out in this graph to you. First, that immigration has been growing steadily from 1970 until now, I would say, but in two different ways. Up to 2000, all groups were growing quite fast, and the largest group was the group with particularly low education, the people with no high school degree.
Since 2000, the group of people with low education has remained relatively flat. Only in the last year there is this bump. We’ll go back to talk about this. This is the bump that a lot of people have talked about—‘22, ‘23 were years of particularly large immigration relative to the previous. But if you look at this bump in perspective, this doesn’t look like a shocking bump, to tell you the truth. It looks like a little bit of a bump. And here we will discuss.
But the college educated instead, since 2000, have increased a lot. So immigrants in the U.S. have always been quite a large number of college educated. But in the last twenty-four years, they have become predominantly college educated, relative to the one who have lower education. Now this is a fact. And keep it in mind when we talk about the consequences. Keep in mind that other countries in the world have not been able to attract such a large group of college and highly educated. While many European countries, other countries, have also attracted some laborers, many fewer have attracted the amount of brains that the U.S. has attracted, I am simplifying here a little bit, of high skill.
In fact, if you look at the concentration of foreign-born in groups that go from lower to higher educated, so as a share of the population there are in the late 2010s, 14 percent of the U.S. population was foreign-born, but 17 percent of the college graduates, 22 percent of people with a STEM degree. And if you go on to PhD in science, master’s in science, one-third to—up to one-third of the people are foreign-born. So, immigrants contribute to the whole spectrum of worker and skill in the U.S., but certainly the U.S. is able to attract a lot of highly skilled immigrants.
So then, how do the immigrants do when they arrive in the U.S.? Are they integrating in the U.S. economy or not? These are graphs that show for the three biggest groups of immigrant—Mexican, Chinese, and Indian—and keep in mind, these groups in terms of education, are very different. Mexicans are predominantly low-educated immigrants, Chinese are intermediate, Indians are very high. But this line show you the employment rate of this immigrant relative we standardize the U.S. natives to zero. So, we compare different cohort of immigrant that arrived recently or in the past. And we can track how their employment probability, so their employment rate—how many of them are employed relative to the population, fare relative to native.
One thing that you notice is that all groups after ten years they have been in the U.S. are at or above the employment rate of the U.S. So, not only immigrant come from all groups, but they quickly integrate in the labor markets in the U.S. Again, this is not common in the world. In Europe, the situation is quite different. Immigrants take longer to integrate than the U.S., and sometimes they don’t fully. With these two facts, that a lot of immigrants come in with a lot of different skills and they relatively quickly integrate in the U.S. market, what is the effect of immigrants?
So, the way in which economists first approach this idea, I would say, is to look at how they affect the growth of U.S. GDP, the growth of income in the United States. And the growth of income in the United States is made up of two parts. One is more workers you have in the economy, the more you produce. This clearly depends on how many bodies you have. And then how more productive these people are, either because they use more machines, computer, equipment, they use more investment in physical capital, or because they have more productivity, innovation—because of innovation, better efficiency, the more people produce.
Now, immigration, you can think—and for long time, economists have been stuck on the idea that immigrants were bodies that increase the number of employed. And that’s certainly true. They increase the size of the American economy. And as we will see, they have. But immigrants also have contributed substantially to these two parts, to investment and to productivity growth. And let me give you the intuition. There is a ton of research, and we can talk.
Investment because immigrants themselves are firm creators. They are entrepreneurs. They start companies. And they generate a faster rate of entrepreneurship—and productivity growth because, as I told you, a lot of them are scientists, engineers, people who work in technology. They have different type of skills than natives. They come up with different idea. They generate new idea for new restaurants, new products. And so, both entrepreneurs at the high end of technology and low end benefit in terms of productivity from this variety.
So in fact, if I put up here a couple of numbers, recent estimates of the impact of immigrants in U.S. states or across rich country—OECDs are all of the rich countries—then 1 percent more immigrants means 0.27 percent more investment, on top of 1 percent more workers, obviously. They are a worker, but they also stimulate investment. And almost 1 percent more in growth in productivity. And in the other countries outside of the world, maybe even a little bit more contribution to capital growth, and a little bit less to productivity.
Productivity is where the innovative immigrants, entrepreneurial immigrants, that grow the variety and the quality of goods which are produced, and the variety and quality of firms which are there. So immigrants, on average—on average, generated in the twenty years up to 2020 a growth of employment of population employed by 6 percent in the U.S. And in turn, the 6 percent more employment generated another 5-6 percent in larger productivity per worker, which is the main determinant in the long run of wages per worker. So on average, they have really helped the U.S. economy.
Now one question is, OK, they have helped everybody, but did they hurt somebody? Did they hurt the people who are less skilled, less educated? And this depends on two things. One is how is the composition of immigrants? How many skilled, highly educated, versus unskilled you have. If you only have unskilled immigrants, and there is only competition on the side of unskilled, maybe you have a stronger effect. I’ve already showed you that that’s not quite the case. But that’s important. And the other, which is an interesting thing which is emerging more and more, is did these people take jobs, displace jobs? Or did they help to fill vacancies?
Meaning, did the U.S. in this period generate more job potential than they have employed people for, or the other way around? They have a lot of employed people crowding a lot of job potentials. So, let me speak to these things for the last couple of minutes, and then I’m done. So, what is the distribution of immigrants that came? Here, in another way, I’m showing what I’ve showed in the previous graph. In the period 1980 to 2000, this is the net inflow of immigrants as percentage of non-college—sorry—non-high school, some high school, college, and college-plus. And this is the contribution of immigrants in percentage of the group in the post 2000s.
So already, you see that already in the ’80s up to 2000 there were a lot of college educated, and there were also a lot of people with low education coming in. But the distribution was balanced. But in the recent period, it has been even more concentrated among the high skilled. So, the competition that immigrants have brought at the low end of the spectrum has not even been as strong as the as the inflow of highly skilled immigrants. And because of that, they didn’t really depress wages. They didn’t—they weren’t really responsible for this—for this effect.
But even more interestingly, let’s talk about the post-2020. In the post-2020, new things happen in the U.S. labor force. And this thing is that the U.S. labor force, for the first time in history, starts shrinking. This is the net number of million people which are added or subtracted to the labor force every year in the period 2010-14, 2015-19, and 2020-23. You see that while the U.S. labor force was growing by one and a half million per year in the ’80s, and ’90s, and early 2000s, it recently has been growing much slower. But in the last four years, it has actually been shrinking.
It has taken away 400,000 people in the last five years. Why? Well, COVID was one reason that people left. Because the age structure of the population is the U.S. is that we have huge cohort, the baby boomers, exiting, and smaller cohorts. Now, what did foreign-born do? Foreign-born offset, in part, this decline of the population by, in the last period, this bump of immigrants has generated a little bit of an offset of this loss of natives. However, if you look at the economy, it has not offset enough because, on the right-hand side, I have the average number of unfilled jobs at the end of each month, on average, that the U.S. economy has generated.
This number has been steadily increasing over time in the last decade-plus. In fact, in the 2020-23 period was an extraordinary period in terms of the number of unfilled vacancies—jobs which stay open month after month. This means nine million at the end of each month per—there were nine million job openings which were not filled at the end of each month in the period 2020-2023. So this is interesting. But I say even more interesting is to look at the composition of these jobs by college and non-college. It’s true that the U.S. labor force is not growing as fast. This rate of growth have declined in the last period. But the college educated are still growing in the labor force. A little bit offset by foreign-born.
It’s the non-college educated which are disappearing fast from the U.S. labor force, because the new generation are more educated than the old. And immigrants, which are making up a little bit this decline—again, as I said, non-college educated immigrants in the last period bumped back a little bit—are still not enough to fill the vacancies. And I put here two sectors, which are typically generating a lot of non-college job opening, construction and leisure and hospitality. And the openings, the unfilled jobs in each one of these sectors, have been, in fact, growing. OK, so I am over time. So let me conclude.
I think that overall, there is strong evidence in the economic facts and data that immigrants have had a very strong positive impact on U.S. income per capita. College educated have a very important role in this. But even non-college educated have found employment at very high rates. And given that labor force is shrinking since 2020, non-college immigrants could be economically even more relevant to fill some of these jobs. And this 2022-23 bump of immigrants maybe was a good news in economic terms, at least, for sure. Then Ted will tell us what tragic consequence this had politically. But for now, let me stay economist, and we don’t find that it had a negative economic impact. Sorry, I went a bit long. That’s it.
ALDEN: Thank you, Giovanni. That was tremendous. That’s a—that’s a model for how to convey a lot of important information very efficiently. I actually have one question—one kind of comment/question. I want the rest of you who are watching this to start teeing up your questions. Deanna will field those and get them to both of us.
So two quick questions. Giovanni. A country that I follow quite closely is Canada, which also has very high levels of immigration, has tried, through its system, to attract highly educated immigrants. And yet, really struggles with productivity. Canada has a major productivity challenge. And when you looked at the numbers you presented, sort of comparing the productivity bump in the U.S. from immigration compared to the OECD average, clearly, for whatever reason, we are gaining more of a productivity boost here in the United States than most other countries. What’s the explanation for that? Is that a feature of the immigrants were attracting? Or is it a feature of the American labor market, or the way we handle innovation? Is it something about the way our economy is structured? So how would you explain that rather large discrepancy on the productivity gains coming from immigration between the United States and other OECD countries?
PERI: Great question. I would say there are three plausible contributors to this. Number one is the selection of immigrants who come to the United States. There is no doubt that the United States, because of the very high quality of its universities and of some of these companies, attracting people from the world who are real, genuinely talented, innovative, smart. And there is no doubt that wherever you are in Europe, in Africa, in Asia, when you think about, oh, where can be the top physicists, the top chemists, the top scientists, the U.S. come to mind. So one, selection of brilliant, creative people.
Two, variety of brilliant and different people. The U.S. is not only the country that gets more in number. It is also the biggest number of countries that contribute. I mean, people talk about this—I put down just India, Mexico, and China, which are three very different countries that contribute a lot. But the rest of Latin America, but Europe, but some countries of Africa. So people from all over. There is a lot of research that says difference of country imply difference of ideas, difference of skills.
And the third, I would say that the U.S. has a particularly good environment for thriving of entrepreneurship and innovation. That’s certainly a little bit the freer action, activity of entrepreneurs, the friendly type of legislations that they have, and this variety of people and ideas. So entrepreneurship, variety, and talent of immigrant contribute. And I agree with you, even more than Canada. Canada is the country that I take, sometimes, an example of smaller U.S. in terms of what they have done so far. Let me say one thing, Canada is in a position that it can benefit a lot if the U.S. changed this drastically, because they are the most similar in terms of number of people they have, attracting talent. If the U.S. were to change direction and close, I think Canada would become the beneficiary of that.
ALDEN: Excellent.
(Gives queuing instructions.)
The other one, just to elaborate a little more on the 2022-23 period, because it was obviously significant economically and also, as you hinted at, quite significant politically. I mean, I think the way most of us look at that period is that there were two things going on. One was a sort of post-COVID bump. You had natural migration restricted in a variety of ways because of the COVID border closures and travel restrictions, the shutdown of immigration visa processing for many months in the United States. So, some of that was a rebound from that period of restraint. But the other thing, of course, that went on was that the Biden administration was actively welcoming a lot of people, particularly from Latin America, from Haiti, from Cuba, from Nicaragua, from Venezuela, as part of its border control strategy. And that had political impacts that may well come up in the questions.
But what I found really interesting about your presentation is that you seem to be suggesting that what happened in that period coincided with a sort of gradual, but then perhaps a little more sudden, shrinking of the native labor force. Kind of crystal ball a little bit. And as I say, I’m sure they are going to be questions that come up about the current administration’s policies. But one of the things I think we do know is you’re not going to see that kind of bump again, and you may actually see some significant reduction. We’ve had the administration cancel temporary protected status programs and say that they’re going to move to deport a lot of people who came in in that period under these parole programs. What is the likely economic impact of restrictions? And that that fits more in your lower-educated level, I think, on average. There’s certainly highly educated people coming in these streams, but on balance I think lower. So what is your analytical framework tell you about the likely consequences of the of the restrictions that we’re already seeing and are going to see?
PERI: Yes. So let me address both. So you’re absolutely right that the post-COVID bump of 2022-23, in particular, as peak year, was, in part, some pent-up pressure that was blocked during COVID. In part, these policies in which a couple of things changed. As you say, a lot of temporary protected status for several groups, allowing people to come in and claim asylum, or apply for asylum and stay. Which was also not done before, so it generated a larger inflow.
As you say, this was happening at a time in which a lot of these people found employment because the labor markets were tightening up. After COVID, there was these two phenomena happening in the labor market. One, a group of aging people decided to retire. So retirement went up. And a lot of people decided that it was very risky for them to do this in-person manual jobs, and the remote type of job became more available. And a lot of Americans jumped on that. And so, a lot of these manual, in-person jobs became hard to fill. And these people who arrived in that period actually did contribute to fill those.
I want to say, political or policy thinking clearly seemed a little odd. There would have been, I think, an economic case to make to say this is a period of tight labor market. Let’s try to open up for some job or work visa to this type of immigrant, which that was not even tried. Of course, this would have needed some legislative—all were done with this special authority, temporary visa status. This, to me, speaks to the way in which the immigration policy is done in this country. There is never a little bit of an economic planning. We do need these people. What I want to say, the bump was very beneficial. But the way in which it was done—chaos at the border, a lot of people coming, gave the impression that was a totally overwhelming experience.
I think that the same number of people coming with cleaner visa, clearer situation, would have found employment and been more effective. Going forward, tightening, deporting, reducing, I think it will, in terms of trend, generate more tightening of the labor market, with two results. One, some sectors will not be able to grow as they have grown in the past. Hospitality, food, construction, they rely a lot on this. So what will happen? Well, it will be harder for them to fill the jobs. Therefore, they will not grow. Companies, hotel will not be open. Maybe the prices of some of these goods will go up somewhat. And this will reduce their growth.
And so, the economy in those sectors will not grow for the people who work and also for the connected, as it could have. And I think this will become at some point a real concern, I would say, for an administration that looks at the economic consequences of this. So we will see how much deportation really affects the number. So far it seems to me very in your face, some of these cases, but maybe in terms of number it has not been so huge. But certainly there has been a reduction in the number of people coming in. So harder to fill position, slowdown in growth, increase in prices. Those are the three things that I think we’ll see for a little while. And then the question is, will that push a little bit more of changing of legal immigration policies for workers, for people who can come to work in the U.S.?
ALDEN: Thank you very much. Yeah, and I watched the trade stuff very closely as well. And tariffs are also likely to be inflationary. So I think that’s the theme we’re going to be watching.
Deanna, it looks like we’ve got a series of questions that have come in, so I’ll turn it over to you. And let’s get some of the other folks on the call involved.
OPERATOR: We will take the raised hand from Mojúbàolú Olufúnké Okome, who is a professor at Brooklyn College.
Q: Thank you very much.
I think this immigration thing, for me, also has to do with the education sector, because decisions that are being made in the larger policy scenario is affecting some institutions such that they’re not admitting PhD students from abroad. And so, if innovation and brilliance is what gives America the bump, the productivity bump, isn’t it—can’t we just speculate and say that this is going to be affected? Also, you know, the whole variety of people, ideas, and all that is being challenged because of this obsession about DEI being the problem. So how would this—moving forward, how would this affect policies on immigration? And then, you know, the favorable effects from this movement of people who see the U.S. as a place where they could thrive?
ALDEN: Thank you. This is a great question. Giovanni, I’m just going to offer a slight addition to this. Because one of the striking things from some of the graphs you showed there is seemingly how immune a lot of these trends are to policy changes. I mean, I wrote a book about the post 9/11 immigration and temporary visa restrictions and others, speculating that this could have a negative impact on how attractive the United States was to immigrants. Didn’t really seem to have any long-term effect. The questioner raises some real questions about the research enterprise here in the United States, and if it’s weakened. So what’s your best guess at the effect some of these moves might have?
PERI: Yeah. So one thing that I’m very clear—thank you for the question—is that universities in the U.S. have been the gateway of a large part of these high skilled flows, both admitting these people as undergraduates, as masters, as PhDs, allowing them to stay a little bit. I just wrote the paper they came out on the importance of foreign master’s student as creators of startup companies in the U.S. Almost half of the startup companies in the U.S. are created by this foreign master’s student, who are only 15 to 20 percent. This is crucial.
Now I really think—and, again, maybe it’s a little early to see—but if there is a strong effect of some of the policies on the ability of University of attracting foreign students—high-quality foreign student, this will have a long-term impact. You’re right, Ted, that that graph shows that the growth of college educated has continued. However, if you look at the growth of the foreign visa students in the U.S., this foreign visa instead—and is slow down already during the first—from 2017 to 2020. This visa peaked almost in 2017, then they slow down. Then during COVID they little bit collapsed. Then they bounced back significantly.
Those students who are on visas are going to be in ten years the people who are going to produce, you know, the high-skilled, that are entrepreneurs, that are innovators, that are scientists. In an environment that make for university harder to fund the student, to attract these students, to allow these students in will create, I think, a significant effect. And the question of DEI, I mean, variety of ideas needs to be in there to be strong for science. And so we will see. If we lose this freedom of diversity and differences, that can be an issue as well. But certainly I think the role the university will play is going to be very important.
ALDEN: Great question. Thank you for the response. Deanna, next question.
OPERATOR: We will take a written question from Rey Koslowski, who is professor and director of the Master of International Affairs Program at SUNY Albany. He asks: What percentage of college educated immigrants managed to secure jobs in their fields that enable them to fully utilize their education and skills? What percentage, alternatively, are underemployed or unemployed, such as brain waste?
ALDEN: Great question. Great to have you on the call here, Rey. Greetings. We haven’t talked in too long.
Giovanni.
PERI: Great question. Very important question. So I actually would say the following. We have a couple of recent papers that look at the career of foreigners who study in the U.S., and what happens afterwards. So the number-one thing, the number-one brain not used—I don’t know if it’s waste—for the U.S., is that a lot of these students who study in the U.S. leave the U.S. when they have finished their study, because their visa, by definition, does not allow them—there are millions of visa students. Twenty percent of them can stay and find a job. One thing that helped a lot was the extension of the OPT, this optional practical training period in which student can find some job for three years, that bumped up this 20 percent to 25 (percent). But only 20 percent of them stay.
I would say that you don’t observe too much this brain waste because people who stay, they need to stay on very specific either H-1B, or because they are hired, or because they have a clear plan. So the waste is not, I would say, that these people study in the U.S. and then are, I don’t know, taxi drivers, with all respect, but—or do something which only—but is that a lot of them get this education, would have a company that hired them, would have a position, but they cannot find a visa to stay in the U.S., with the H-1B limitation. So, this is a large kind of hemorrhage. And we were very surprised finding that even for a master’s students, in spite of almost half of the master’s students going back, the one who remain are very likely to create company and create high-quality company. So, I think these students who graduate do pretty well, but not so many stay.
ALDEN: Yeah. Just if I can just add a little something here. Rey, you’ll appreciate this because it’s a U.S.-Canada story. But there are real challenges in terms of the visa categories. I’ve been going to a chiropractor for the last little while. It’s helped me a lot. I have way more freedom in my neck. Appreciate it. And that young man working on me is a Canadian who’s been down here, studied here, went to four years of chiropractor school, is working here. But his permission’s about to run out. And he would like to be able to apply for what they call the NAFTA visa, or the TN visa, which allows Canadians to work in the U.S. and Mexicans to work in the United States.
Turns out that there’s no category for chiropractors. That’s not a category that fits under this relatively easy to obtain North American visa. There’s been discussions for years about updating that list, but immigration has become so controversial here in the U.S. that the Americans refuse to negotiate on it. So he’s looking at maybe an H-1B, but then you get into the lottery situation, right? Does his number come up? And so I think your point is a very important one. There’s a lot of students who would like to stay, but they can’t find a visa category that allows them to stay. And we haven’t updated those categories in a long time. So it’s punishing me if he has to go back, right? (Laughs.)
PERI: Yeah, the same type of issue—same type of issue arose with the OPT, which only were for STEM. And so some—we had to classify—so, for instance, economics was not considered STEM. And then when this passed, we were reclassified as STEM to allow students to stay and take advantage of these years extra in the U.S. So it’s a little crazy, the taxonomy there.
ALDEN: Yeah, absolutely. And complicated.
PERI: And complicated.
ALDEN: From talking to lots of migrants, it dominates their lives in different ways. The choices that they’re able to make in terms of career and family and other things are very strongly influenced by their status here in the United States, their visa status.
Deanna, let’s move on.
OPERATOR: We will take the raised hand from Edoh Agbehonou, who is an assistant professor at Bethune Cookman University.
Q: Good afternoon. Thank you so much for this presentation. My name is Dr. Edoh Agbehonou. I teach at Bethune Cookman University, political science and international relations.
I’m an African-born. And recently, President Trump have issued some restriction on a visa, the DV visa, also known as lottery visa. That’s the visa that I came. I was part of that visa process. And he gave a red restriction to some, meaning no visa to U.S. at all, including Sudan, Egypt, and Somalia, and other twenty or nineteen other countries, have some restriction. But the DV visa was banned for all the fifty-four countries in Africa. But if you look at Africa, Africa is a continent that is rich in terms of resources. But I don’t think—I don’t know if they think about those resources before they are making this kind of immigration policy.
So, you know, he’s banning Africans to come to the United States, but what happened to their resources that all the powers—the great powers are fighting for? If you look at the DRC, where—DRC, Democratic Republic of Congo, where about 80 percent of the world resources in cobalt, needed for the chips, and the battery, and so on and so forth for our computer and cellphone are there. And the United States is fighting for, China is fighting there, Turkey, and so on and forth. All those great powers are fighting. But yet, he doesn’t want African to come to the United States, but wants African mineral.
So what’s the consequences that will lead? At the same time, he provided about the forty non-white countries, allow those to—the visa—the DV visa to continue going on in those forty non-white countries. So is it making American white again the issue—the great issues? So those are the questions that I’m asking.
ALDEN: That’s a good set of questions. Giovanni, maybe I’ll start just with some of that, and maybe you can talk a bit more about the diversity visa lottery, if there’s research out there that you know about. I mean, there is reporting—as far as I know, it has not been announced yet—that President Trump is going to do a much broader travel ban than we saw in his first term. The New York Times has reported that it’ll affect forty-three countries, and a lot of those are in Africa. So that’s going to have significant impacts on our relationships with Africa.
We do know from the research, and I think just from history—we looked into this, you know, more than a decade ago when I worked with Jeb Bush and Mack McLarty on the CFR Immigration Policy Task Force. But immigrants coming to the United States, the ties they create here end up paying a lot of dividends down the road in terms of strengthening relationships with the countries that they come from. And there is—you know, as many of you on the on the call will know now—some significant competition over African resources. They’re so important for electric vehicles and other technologies of the future. The Chinese are very active there.
So I think to the extent that we are cutting those personal ties with Africans who want to come to the United States, will be unable to come to the United States, that’s likely to harm U.S. efforts in Africa to secure resources that are going to be very important for the future.
Giovanni, do you want to talk about any aspects of that?
PERI: Yeah. I just want to add two things, from an economist point of view here in particular. So, one is that it is well known that immigration networks and links—so you’re talking about Africa—are also generating other economic links, more trade, more foreign investment, more technological flow. So, the idea that by stopping the inflow of a group you are punishing that group and you’re helping yourself is, for an economist, so foreign, because there are mutual gains to be done—gain from trade, gain from mobility, again. So I agree, yes, with the question that it seems odd, this idea of generating that.
It seems that another part is that the immigrant, or a foreign scholar in the U.S., seemed to me an incredible form of the soft power that the U.S. had, which is the U.S. has educated a lot of people who have been world leaders through this, they come to study and they go. And by limiting this encounter, so important as Africa, where, for sure, the resources in the future are, but any other, this will be also reduced. And going in a world where the U.S. does not play this important role, I think also is going to come to the detriment to the U.S.
ALDEN: Yeah. There have been some good pieces in Foreign Affairs and other publications about the Trump administration’s very different approach when it comes to soft power. I think other administrations, Republican and Democratic, have recognized exactly what Giovanni is talking about. This administration, much more so, I think, even than in Trump’s first term, has a very different view on the virtues of these very soft power tools. I mean, you look at the—at the attempt to shut down the Voice of America and the other American radio broadcasts, which are classic example of that.
PERI: Right. Exactly.
ALDEN: All right. Let’s move on.
OPERATOR: We will take a written question from John Eldon, who is a professor at the University of California, San Diego: How many lower-skilled job opportunities will disappear with continuing automation and robotics?
PERI: Yes. So that’s a good question. And it’s a question that everybody asks in the labor market. So, robotics is going to play a role in the future, particularly in some of these jobs. However, it seems that there are a lot of jobs that we’re still far from efficiently making robotics, that humans are still doing much better at a much lower cost, and in which I don’t think that the research and the innovation will be. So, there will be a massive robotics research for a lot of military goals, military replacing. These are high value, high cost. But in terms of—in terms of replacing, you know, waiters who work in a restaurant, or people who take care of the kids and the elderly, I think we are still not so close to do that.
This means, I think, that maybe fifty years from now robotics will play a very big role in this. In the transition to then, though, immigrants will provide. In the next decade many of these jobs will either be done by humans or probably be too expensive and some of them will not be done. Think about care of the elderly, for instance. The likelihood in the next ten years is that if we don’t have enough people who do those jobs, those jobs are done in the family by people who have to give up jobs, and daughters and sons. They’re not going to be robots, likely in such a short term.
So in the longer run, if the shortage continues, because the U.S. is continuing to be relatively closed, I think you’re right that the research and the pressure will be to replace some with robotics and technology in general, and automation. But I think in the medium run still there is going to be a lot of potential for jobs for immigrants. If that doesn’t happen, the cost of those jobs will go up, the cost of the services and the availability will go down.
ALDEN: And, Giovanni, just one thing I’m wondering. This is, I think, early still, but if you look at AI, my sense is a lot of the impacts there are actually more in language-based fields. So probably more likely to affect native-born workers than immigrants. I think the shock we’re going to see coming may affect native-born workers more than it would affect immigrant workers. It may be too early to tell, but—
PERI: Absolutely, you’re right. So AI will also be another technology that has big effect. Maybe those would be even more consequential for highly educated type of jobs, what we consider. And there, as economists say, it will really depend on how much AI technology replaces and complements which skills, right? Because you can think that some of that AI help people to write a better essay, but you still need the creativity of the essay. Otherwise, what are you producing? So maybe some people who are creative research, but if you were just the copyeditor of that, that job is going to go. So we will see how that balance works.
ALDEN: Yeah, very good. I’m certainly encouraging my students to use it and get creative with it, because they’re going to need to know how to use AI in their—in their work. I’m not discouraging it at all among my students.
PERI: I agree.
OPERATOR: We will take the raised hand from Luisa Blanco, who is a professor of public policy and economics at Pepperdine University.
Q: Hi. Good afternoon. Thank you—or, good morning. (Laughs.) Thanks for these—
ALDEN: Or good evening, in Giovanni’s case.
Q: (Laughs.) Yeah, exactly. I know we’re all over the place. But I’m in California, so. So, well, you know, thank you for giving me the opportunity to raise these questions. So I think, you know, in the economics field there’s been a lot of conversation about the demographic cliff. There, you know, are statistics showing that, you know, the amount of population in the prime age, the working age, is really going to be shrinking. And that is something we know for a fact, right? It’s not like—you know, whoever is going to be twenty years later has to be born now, right? So we know for sure that this is happening.
And one thing that I would like to hear more from the speaker on their expertise is why we are not having more conversations in thinking how immigration policy can be a useful tool to address the demographic cliff. I was hoping, you know, that during the elections this will probably come up, but never did. I am hoping, you know, that we can have more conversations around these. Of course, it is—because the demographic cliff is there. So I’m really curious from—you know, to hear what are your thoughts on this, and how we can move the conversation into that direction.
ALDEN: Giovanni, you want to start and I can talk a little bit about—
PERI: Yeah. Well, so the question, why is this not more part of the conversation, I really cannot answer because—well, let me say one thing. So, Luisa, you’re right that this idea that demographic decline and aging is something that is happening at fast speed, in Europe faster than in the U.S. In some Asian countries, even faster. So, let me say one thing, and then I leave it. I think that the economic case for having more immigration in response to an aging society, not just to replace a worker but also to do a lot of the jobs which are linked to the aging economy, is clear to everybody. However, I think that you also see some countries which are more advanced than the U.S. in the demographic decline, and decided not to go for the way of immigration as a solution—Japan and South Korea are countries where the aging is even more advanced, and they have more older elderly people, and if you look, their immigration policy are definitely more restrictive.
So, I think here there is a tension between the economic case, the demographic case, and the more cultural, ideological case. And maybe even with an aging population some of the topics that make immigration a little culturally different, or even a little kind of anxiety generating, kind of have some impact. And so, maybe we will live in a world in which countries will be aging, will need immigrants, will make an economic case. But from a cultural openness point of view, they will become less open to accept them. And so, the balance of these two things will determine what kind of policy the country will take. I don’t know how to make the economic case and the demographic case more central for people, that instead argue about other—on other ground that immigration is scary, is different, is changing things.
ALDEN: Yeah, that’s—I mean, it’s a great answer. The only thing I would add, I think that that’s about 75 percent of the reason here in the United States. The conversation around immigration is rarely about the economics of immigration. It’s much more about security and the border, cultural issues, that whole set of issues. But one thing I think people do need to be aware of is that this administration—and Stephen Miller is the figure who has most clearly articulated that—has adopted a very different view about the economics of immigration.
His basic view—and it’s belied by your research, Giovanni, and I think most of the other economic research out there—his view is very much that immigrants are direct competition for American workers. And one of the explanations for low wages in the United States—which, you know, by OECD standards we have a lot more low-wage workers than a lot of these countries—that immigrant competition is an explanation for that. And by reducing immigration, we will drive up those wages. I don’t think experience has tended to play that out, but he’s certainly very persuaded. And I think this administration is persuaded.
PERI: I agree. I agree with you, sort of, the administration, in particular, Stephen Miller, is somebody who will talk abundantly about this negative economic impact, which has really very little basis. And as soon as you dig, you see in reality the positivity. In a sense, it’s almost—it seems to me almost more intellectually dishonest to go for the economic and then around the economic effect. One could say, look, maybe there are some benefits, but we are worried about our culture, we worry about security, and base all the anti-immigration sentiment on this other topic, on which we can disagree. And is no for me to bring data facts. But on that there are a lot of data, facts that are a little bit denied in that. So I agree, we should become better in order, at least, to continue to debunk that part of the immigration claim. And then kind of the policy debate, of course, we left the other 70 percent, as you say.
ALDEN: Yeah. It would make for a much more reasonable discussion.
Deanna, next question.
OPERATOR: We will take a written question from Xochitl Bada, who is a professor in the Department of Latin American and Latino Studies at the University of Illinois, Chicago: What do we know about the job competition between foreign-born workers who came without a high school degree and U.S.-born workers without a high school degree? Do we know to what extent those two groups fiercely compete for precarious, low-wage jobs?
ALDEN: A perfect question in light of this discussion. And, Giovanni, if you feel like it, maybe talk a little bit about George Borjas’ research and his work here, because I think he’s been the most prominent economist arguing that there really is very direct competition at that level.
PERI: Yes. So, I mean, it’s logical. And also has a sound economic ideas, that if you have a very large increase in one type of workers—so let’s call the people without a high school degree—and these workers are similar to the American workers, there is going to be competition. And this competition will potentially result either in some displacement of jobs or in depressing wage. Now, we have had somewhat different—so this is a fact, that if you let a very large number of low skilled doing jobs that are American in general, the tendency will be that of depressing a little bit their wages. However, these workers will have a lot of other effects also in the economy. They also demand goods, so they increase the demand. So, some of this pure competition effect is not really only pure competition.
And with Borjas, we’ve had a lot of back and forth on arguing how similar immigrant and native were in doing certain job. And I have a lot of research that shows that immigrants do job which are somewhat different, even in the same sector, even in the same occupation. If you look at, you know, maybe a construction worker, the immigrants are more doing the, you know, building of the wall. The natives are doing more interaction between the worker and the supervisor. So, because they have different language skills, manual skills, physical skills, they tend to do different jobs. And this is called comparative advantage and specialization. Specialization is good for the economy, if you have some worker doing one thing and another, another.
So in a complex economy, like the United States, you cannot just say, oh, you need one job. If we have only immigration in this one job, say, construction, brick wall builder, then, of course, just adding workers will depress the wages of the group. Yes, but immigrants are not just this. They move across occupations. This generates complementarity. So, the bottom line is that I think they’re looking at the number—although this competition effect exists—looking at number and looking at the fact that immigrants are somewhat different than natives. They stimulate local demand. There are also high skill immigrants that generate other type of dynamics. Immigration in the last twenty years in the U.S. has not contributed almost anything to the decline in wages of the low skilled.
In fact, the effect on wages of low skill has been roughly zero. Or, as we’ll say, is minus 1 percent, minus 2 percent. If you look at these estimates which are negative, they are not massive. And they were much bigger when a lot of low skilled came, which was the 1980s and 1990s, rather than the 2000s. So, here we disagree on detail. But they are not the cause of this stagnation of wages, which I think instead have some technological causes, maybe a little bit of trade and outsourcing causes, also de-unionization, also change in minimum wage. Immigration does not seem to be the reason why low skills have not done very well. And in fact, immigrants have filled some jobs, and they’ve given some complimentary tasks that have not hurt natives so much. They have not helped them a lot. So that low skill has not been had very much by immigration, I agree. But there’s not been too much of this competition effect going on.
ALDEN: That’s a great question, and a lovely, comprehensive answer. Thanks. Giovanni.
Deanna, hopefully we got time for a couple more questions here. Who’s next?
OPERATOR: We will take the raised hand from John Mathiason, who is a visiting lecturer at Cornell University.
Q: Thank you very much.
I’m an old-time international civil servant, in addition to all of that. And migration is a fascinating thing because, to a certain extent, part of the rules-based order on which the United Nations was set up was based on migration. We look at it right after World War II there was a major refugee problem. And one of the ways you solved the long-term refugee problem was to deal with migration. And the International Organization for Migration was set up to do that. And I know some of those have been put in there. On the other hand, there has been more concern with it, and in 2016, there was an International Compact on Migration that was adopted by the General Assembly.
Now I’m going to move now to the narrower thing of the current of our country. In terms of the IOM, the International Organization for Migration, the United States basically pushed it, and for most of its history, its heads were always from the United States. But now, hmm, there is some question about what’s happening. Secondly, when they adopted the Compact on Migration, five countries voted against it, and the U.S. was one of them. So in other words, there is an international rule system in which the U.S. is, hmm-hmm, maybe not participating so much.
And the question is, to what extent does the connection between the U.S. and its economy, and the rest of this rules-based order, important? And I’ll put one thing on the table for that. Yesterday, the government of Florida began to try to deal with a problem. They had a shortage of low-wage workers in undesirable jobs. And their solution would have been to loosen child labor laws, so that you could allow fourteen years olds for, for voting. And the good news is they can get away with it because the United States is the only country on the planet which never ratified the Convention on the Rights of the Child. Over to you.
ALDEN: Thanks. Thanks for the question, John. I actually—in the book I shamelessly hawked, we write some about the International Compact on Migration, and other efforts to coordinate and regulate migration at more of an international level. Unfortunately, it’s not been terribly successful, on the whole. The rules in that area have not been widely followed, not just by the United States but by others. But, Giovanni, are there—you know, are there good examples of international cooperation that help improve labor market outcomes?
PERI: Yeah, that’s a good question. That’s a good question. And it’s hard to think—so, I mean, I would say that there are some countries which have had part of their immigration system design the thinking of really solving some economic issues. You can think, of course, of a small country like Singapore being very open to immigration and attracting people, and becoming a hub for innovation growth. In Europe, Luxembourg, and Switzerland are countries which are—have the largest inflow of immigrants from the rest of Europe, and other places where this has been the basis of their economic strength and economic growth. I would say that Canada and Australia have also some policies which are quite immigration friendly, and they’ve been working relatively well for their economies.
But this problem that you say, that immigration is a complicated issue. A lot of European countries also are closing rather than opening when they are also aging and they will benefit from immigration. Is hard to find a country which is a model for this, or a larger country. And in the past, I would say that in some part of its history the U.S. has been quite a beacon for some of the immigration policies, although—(laughs)—not now, for certain. And as you say, international cooperation sometimes has been problematic in many sides on this topic.
ALDEN: Yeah. Immigration seems to be an area in which nations protect their sovereignty quite jealously.
PERI: Very jealously.
ALDEN: Trade is an area, of course, where they were willing to give up a fair bit of it. But as we’re seeing today, even that as being clawed back. We’re moving to more national policy across the board.
So I think we are just about at time. So, Giovanni, I just want to thank you so much for sharing your insights. I want to thank the group here for the excellent questions and contributions. I think this was a very rich discussion.
Just looking ahead, the last Global Affairs Expert Webinar of the Winter/Spring Series is going to take place, I guess, is it next Wednesday, April 2, at 1:00 p.m. Eastern time. Jennifer Nuzzo, who’s a professor of epidemiology, director of the Pandemic Center at Brown University’s School of Public Health, is going to lead a conversation on complex public health emergencies—you know, so COVID and beyond.
In the meantime, I encourage you all to learn about the paid internships at CFR for students, fellowships for professors. That’s at CFR.org/careers. And visit our various sites, CFR.org, ForeignAffairs.com, ThinkGlobalHealth.org, for research and analysis. And my book is still in the background, so I’ll put a plug in there. So thanks again, everyone, for joining us. Thank you, Giovanni, for staying up late.
PERI: Thank you. Thank you. Thank you.
ALDEN: And look forward to seeing all of you at our webinar next week. Have a great day, everyone.
PERI: Thank you.
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