IMMIGRATION, JOBS & WAGES: THE MISUSES OF ECONOMETRICS

• Donald L. Huddle
• April 1, 1992
• Forum Papers
• Forum Paper
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IMMIGRATION, JOBS & WAGES: THE MISUSES OF ECONOMETRICS
An NPG Forum Paper
by Donald Huddle
April 1992

Conventional wisdom has a life of its own. One frequently hears that “immigrants do not displace U.S. labor”. The statement is ostensibly based on econometric models, but models are built on assumptions and simplifications. When those simplifications are further simplified in the popular press, it is very easy to come to “know” something that isn’t so. In this issue of the FORUM, Dr. Huddle looks at the available studies, explains what they really report, and examines the assumptions, biases, and other sources of error in such studies. This report will probably be rather formidable reading for the uninitiated, but it is a useful reminder of the pitfalls of conventional wisdom, as conjectural studies harden into `facts’ in the public mind.

We would get a very different view of the problem if more people would get out and talk to the people affected. In a forthcoming FORUM article, Dr. Huddle, who is a Professor of Economics at Rice University, reports on his on-the-ground research over a period of years in the Houston area.

— Lindsey Grant, Editor

The New Orthodoxy: Immigration is Good for U.S. Labor

There is a new orthodoxy that immigrants, legal and illegal, create jobs and improve wages. In this paper, I will challenge that orthodoxy.

Open-border advocates such as Julian Simon and Karl Zinsmeister of the Heritage Foundation and the American Enterprise Institute assert that immigrants do not threaten even vulnerable, minority unskilled workers. They believe that immigrants complement rather than compete with native workers by filling minimum wage jobs which domestic workers will not take, by attracting industries that otherwise would move off-shore to find cheap labor, and by expanding the macroeconomy through spending wages earned in the United States. Simon and Zinsmeister also believe that the U.S. is entering an era of long-term labor shortage in which more and more immigrants are needed to reach national goals of robust economic growth, rising labor productivity, and stable prices.

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