The Price of Rights: Regulating International Labor Migration
Exodus: How Migration Is Changing Our World. By Paul Collier. Oxford University Press, 2013, 309 pp. $27.95.
On May 29, 2013, British immigration officers raided the Alternative Tuck Shop, a café just down the road from Oxford University’s economics department, where South Asian and Middle Eastern employees serve tea, scones, and sandwiches. The agents seized two young men, one from Bangladesh and one from Algeria, under suspicion of working in the United Kingdom without authorization. And they shuttered the business temporarily, meaning that hungry Oxford economists would have to walk farther down Holywell Street for their midday panini.
One of their number, Paul Collier, has just published an extended apologia for the tight strictures on immigration that led to this raid, arguing for a global system of coercive quotas on people moving from poorer countries to richer ones. Such quotas, he writes in Exodus, would serve the “enlightened self-interest” of immigrants’ host countries and constitute an act of “compassion” for immigrants and their countries of origin. Collier argues that at a certain point, immigration begins to harm both host and origin countries, that many countries are near or past that point, and that even in countries that have so far remained unharmed, “preventative policies are greatly superior to reactive ones.”
It is refreshing to see the grand case against immigration served up by someone of Collier’s intelligence and credentials. But although Collier styles his book as a balanced review of the research literature, it is in fact a one-sided polemic that stands mostly outside academic research -- by Collier or anyone else. Far from advancing a convincing case for a moderate middle path, the book offers an egregious collection of empirical and logical errors about the sociological and economic consequences of immigration. And they lead Collier to propose policies that would greatly harm, not help, the millions of people seeking to escape their homelands in search of a better life.
THE MASH OF CIVILIZATIONS
Although Collier is best known for his work on Africa, Exodus is preoccupied with the social costs of immigration for rich countries, such as the United Kingdom and the United States. According to Collier, “culturally distant” immigrants threaten “the mutual regard on which high-income societies depend.” To make his case, he takes readers on a fascinating tour of recent research into the political economy of Africa, tracing the roots of modern-day corruption and conflict in the region to centuries-old patterns of war and slave trading. He concludes, "Migrants are essentially escaping from countries with dysfunctional social models. It may be well to reread that last sentence and ponder its implications. For example, it might make you a little more wary of the well-intentioned mantra of the need to have 'respect for other cultures.' The cultures -- or norms and narratives -- of poor societies, along with their institutions and organizations, stand suspected of being the primary cause of their poverty."
Unlike bad institutions or economic conditions, Collier asserts, bad culture is not just a characteristic of poor countries; it is embedded in their people. “Uncomfortable as it may be . . . migrants bring their culture with them,” he writes. For example, he adds, “unsurprisingly, Nigerian immigrants to other societies tend to be untrusting and opportunistic.”
But if you buy the argument that immigrants come from culturally inferior countries, it leads to some strange historical conclusions. For example, between 1850 and 1913, more than a fifth of the populations of Norway, Sweden, and the United Kingdom emigrated en masse, landing in countries with wages several times higher, such as Argentina and Canada. Yet it would be difficult to claim that the United Kingdom and Scandinavia possessed broken social models at the time or that immigrants from these places infected their adopted countries with dysfunction they brought from home.
Another core premise of the book is that diversity per se is bad. In Collier’s view, Bangladeshi immigrants in London are dangerous not only due to their allegedly dysfunctional culture but also because they are “culturally distant” from most people in the United Kingdom. Collier pins his fear of diversity on one study by the political scientist Robert Putnam, which found that residents of racially mixed U.S. neighborhoods trusted one another less than their counterparts in more homogeneous neighborhoods, even after controlling for poverty levels, crime rates, and demographic factors. The statistics in Putnam’s study pertain exclusively to race, not national origin.
Thankfully, Putnam chose not to interpret this finding as evidence in favor of keeping blacks and Hispanics out of white neighborhoods. Collier, however, offers this same data on race relations in the United States to justify limiting the entry of immigrants into wealthy countries. Although he no doubt opposes racial segregation, his conflation of race, culture, and nationality invites this analogy, and he offers no reason why promoting local homogeneity through the use of immigration barriers is any more defensible.
In fact, immigration has been widely shown to have many positive effects. For example, economists have found that crime is significantly lower in the English and Welsh neighborhoods in the United Kingdom with the largest immigrant inflows and that immigration raises local property values in Spain and the United States. But Collier makes no mention of such research.
Nor does he account for the evidence that undermines his assertion that “culturally distant” immigrants from poor countries fail to assimilate in rich countries. And such evidence is abundant. The Manhattan Institute, a conservative think tank, has compiled an “assimilation index” of immigrants in the United States that measures such factors as labor-force participation, earnings, English fluency, intermarriage, legal naturalization, and military service. After Canadians, it turns out that the highest-scoring groups come from the Philippines, Cuba, and Vietnam -- hardly countries with social institutions mirroring those of the United States. Indeed, as U.S. immigration has accelerated, so has integration: the institute’s researchers found that “immigrants of the past quarter-century have assimilated more rapidly than their counterparts of a century ago, even though they are more distinct from the native population upon arrival.”
If you ask entry-level economics students what they would expect a large influx of low-skilled immigrants to do to the economic prospects of natives, most will reason that the increase in the labor supply will reduce wages and increase unemployment, perhaps especially for poorer, less-educated locals. But professional economists have found something very different: study after study has shown that opening up labor markets to more people has not only increased the supply of labor but also raised the return on capital investments, accelerated economic growth, and thus increased the demand for labor -- improving the lives of natives as well as those of the immigrants.
Collier deserves credit for embracing the consensus on this question. But the embrace is fleeting. His argument quickly leaves empirical evidence behind as he speculates about unprecedented bad economic effects that might happen in the future. He argues that although some rich countries do need more immigrants, others can absorb only a few and so should impose caps. The tipping point, he claims, hinges on a country’s population density. It would be “selfish” for countries with lots of open land, such as Australia or Canada, to shut their doors, he writes, yet justifiable for high-density countries, such as Denmark and the United Kingdom, to do so. But it makes little sense to use overall population density as a measure of a country’s ability to absorb new people, since those who immigrate to Australia or Canada these days disproportionately flock to Sydney or Vancouver, not vacant homesteads.
Collier’s fears that immigration will someday doom dense countries are also undermined by evidence showing that even massive inflows of people constitute an economic boon. The most dramatic modern example is the desegregation of South Africa. With the fall of apartheid in 1994, black migrants who had been exiled to remote areas flooded to major cities, where they began competing with white workers for jobs. The scale of this change dwarfed Collier’s worst nightmares of mass immigration to Europe. Yet the results are a staggering rejection of his simple analysis of supply and demand. As the economists Murray Leibbrandt and James Levinsohn have shown, between 1993 and 2008, the average income of black South Africans rose by 61 percent. And white South Africans suffered, well, nothing. Their average income also rose over the same period: by a staggering 275 percent.
Recent U.S. history is not so different. From 1960 to 2011, the number of immigrants in the United States rose from less than ten million to more than 40 million, doubling the foreign-born share of the population. The question of whether this enormous influx of labor has raised or lowered wages and employment has spawned much debate among economists. But the distance between the two sides is quite small; estimates of the cumulative effect of decades of immigration on natives’ wages range from around negative three percent to positive one percent. No serious economists have found evidence of the large hypothetical effects that worry Collier.
Collier compounds this error with another one: he confuses labor markets with the overall economy. In market economies, he argues, the economic gains of immigration accrue to the immigrants, in the form of higher wages, “rather than to the indigenous population.” But Collier forgets that the owners of capital in host countries would never pay such higher wages to immigrants unless those workers added even more value to their employers than what they cost. If one believes that immigrants generally do not displace native workers -- as Collier rightly does -- then one also has to accept that natives actually receive a greater economic gain from immigration than do the immigrants themselves. Collier gets this logic so wrong that he describes admitting immigrants as an act of “charity.” But employers hire workers to make money, not to do good.
Nor are governments providing charity to immigrants, as Collier contends. Ignoring the large literature documenting the positive contribution of immigrants to public coffers, he cites a single study that offers an entirely theoretical model of how immigrants could strain the Scandinavian welfare state. But Collier’s conclusions require empirical data. These exist -- although not in the pages of Exodus -- and they suggest the opposite of what Collier asserts. In a 2013 study of 27 countries, the Organization for Economic Cooperation and Development (OECD) found that immigrants contribute an average of $4,400 more per household to the government than they receive in benefits each year. For 20 of these countries, immigrants’ net fiscal contribution was positive; in the United States, that figure was around $11,000 per immigrant household. These numbers should not come as a surprise, since immigrants tend to be younger than natives, and most of them move to work, not to qualify for benefits. Their age alone means that they will work longer (thus paying more in taxes) than natives and will remain healthy longer (thus receiving less in benefits).
At times, Collier seems to grasp for charges he can level at immigrants. He complains that immigrants compete for the “glittering prizes” of affluent societies, driving up the price of luxury apartments in London and capturing most of the spots in elite high schools in Sydney and New York. But these claims require readers to buy an odd pair of ideas: not only will immigrants become a grubbing underclass that drains public coffers, but they will also snatch up all the spots at the best colleges through their hard work and intelligence.
MOVING ON UP
The median wage of immigrants in the United States is more than four times that of comparable workers back home. Yet Collier describes governments’ putting forcible limits on immigration, to the United States and elsewhere, as acts of “compassion.” This is a strange type of compassion, involving armed agents turning away desperately poor immigrants and deporting them if they somehow slip in.
According to Exodus, however, immigrants gain little by leaving home. Collier supplies three arguments for why this is so -- all of them misguided. The first is that new immigrants “drive down the earnings of existing immigrants.” Although this may be true, all immigrants are still better off for having moved: economists’ best estimate of how much new ones depress the wages of existing ones is on the order of five to ten percent, whereas typical immigrants who have moved from poor to rich countries raise their earnings by several hundred percent. If there is a point at which job competition among immigrants in their destination countries comes close to undermining the benefits of moving, the world is light-years away from it.
Collier’s second argument is that “although international migration responds to global inequality, it does not significantly change it.” Here, his logic is circular, since a key reason immigration has not reduced global inequality is that it is so tightly constrained. According to the economist Branko Milanovic, 60 percent of the variance in real incomes worldwide can be explained solely by one’s country of residence. Yet immigration is a tiny phenomenon: 97 percent of all people live in the country they were born in. Collier’s argument is akin to claiming that freeing a slave will not improve his earnings because while enslaved, he has earned little in the labor market.
Collier’s third argument, about the plight of immigrants, deserves more consideration. He points out that immigrants in Australia and India are not, on average, much happier than the compatriots they left behind, despite having seen their incomes skyrocket. “The massive productivity gains from migration that so excite economists and that migrants capture appear not to translate into additional well-being,” he writes, adding, “the psychological costs borne by migrants may well be enormous, wiping out the income gains that accrue to them.” If future research confirms this point, Collier argues, “migration would not be an investment, it would be a mistake,” and governments should act on that information by preventing such migration from happening in the first place.
This reasoning is bizarre. Using the same logic, one could make the case for barring mothers from working outside the home, noting, accurately, that women with children who work report more sadness and stress than those who do not work. To be blunt: polls showing that immigrants are no happier after leaving home do not justify taking away people’s right to move freely.
Yet the survey evidence Collier cites does reveal a dark side to immigration. In many countries, especially in the Persian Gulf, immigrant workers enjoy few legal protections, have their passports seized by their employers, and are locked into a single company, making them easy targets for exploitation. Collier recognizes the risks that immigrants of precarious legal status face and makes a persuasive case for granting legal amnesty to undocumented workers in rich countries. That conclusion is correct and should be extended further: aiding the victims, not punishing them with quotas and deportations, is the right response to abuse in the labor market.
Having dismissed the enormous gains to immigrants as small and possibly illusory and immigration itself as a mistake, Exodus then asks whether immigration harms the people left behind. Collier notes that from an economic perspective, immigrants’ remittances likely trump any downsides of their leaving. Indeed, the World Bank has estimated that in 2012, the developing world received over $400 billion in remittances; in a handful of smaller economies, such as Liberia and Nepal, such flows accounted for over 20 percent of GDP. “We can therefore safely conclude that migration is good for those left behind,” Collier writes.
But once again, Collier is not satisfied to let historical experience guide policy. He speculates that increased emigration from poor countries could someday prove harmful and concludes that rich governments should cap immigration as an act of compassion. In making that argument, Collier first claims that retaining skilled and motivated workers is necessary to boost the economic prospects of those who do not emigrate, but his policy recommendation rests on a fundamentally different claim: that blocking immigration will lead to economic development in the countries immigrants leave. He offers no evidence to support this claim, because he cannot: there is no country, region, district, or city on earth where coercive policies to restrict departure have been shown to trigger economic growth.
Consider Haiti, which Collier offers as the quintessential case study of the downsides to emigration, since the country “has lost around 85 percent of its educated people.” In fact, the true figure is closer to 75 percent; Collier inappropriately counts university-educated Haitians who left as children and were educated abroad. The bigger problem with this example, however, is his logical leap. It is obviously true that if Haiti is to have a twenty-first-century economy, it will need to convince skilled workers not to leave. But it is wrong to slip from that claim to a different one, for which there is no evidence: that if skilled people born in Haiti were coerced into staying there against their will, because of immigration caps abroad, then the country’s economy would modernize. Eighty percent of Haitians who earn more than $10 per day live in the United States, not Haiti. In other words, emigration is the main way to escape poverty in Haiti. Yet Collier would deny poor Haitians this opportunity on the baseless grounds that forcing them to remain in Haiti will cause the country to prosper.
Elsewhere in the book, Collier appears to reject the ethics of his own proposal. He writes that Afghanistan, Haiti, and Zimbabwe would benefit from coercive policies to forcibly prevent departure but admits that “of course these are neither practicable nor ethical.” Yet he justifies forcible restrictions on immigration to rich countries from these same countries on the grounds that such limits will keep people from emigrating. He cannot have it both ways; the policy prescriptions in Exodus are explicitly designed to undermine the right to leave one’s home country.
ANOTHER BRICK IN THE WALL
Collier’s foregone policy conclusion is that countries need higher walls. The main question, then, is which select few to let in. Collier proposes four criteria: skills, employability, cultural distance, and vulnerability. With the exception of vulnerability, all pose problems. The first two criteria suggest that rich countries should skim the cream of the crop from poor countries’ labor markets -- an odd conclusion for a book that devotes a full chapter to the supposed deleterious effects of the emigration of skilled workers from poor countries. Collier fails to explain the incongruity between his analysis and his policy conclusions, leaving readers to assume that he has chosen to prioritize the preferences of policymakers in rich countries over the fate of workers in poor ones.
The third criterion, by which rich countries would weed out the immigrants who would be unlikely to assimilate, is particularly troubling. Collier writes that the rules determining which nationals to admit should be designed to offset the effects of cultural distance “to the extent possible without transgression into racism.” But such policies have a long history of exactly such transgression. The U.S. Immigration Act of 1924 fixed quotas for immigration in part according to the representation of origin countries among the national origins of the U.S. population and was intended to limit the inflow of immigrants who were deemed less likely to assimilate, such as Asians and eastern Europeans, particularly Jews. The result was that over 85 percent of U.S. immigration slots were reserved almost exclusively for white northern Europeans.
Curiously, even though Collier admits that in many countries, far fewer people emigrate than ideally should, he never grapples with policies that would help would-be emigrants in these places. For every Haiti (with 10.2 percent of its native-born population living abroad), there is a Tanzania (with about 0.7 percent). There is no reason Tanzanians should be denied the enormous increases in income, health, and opportunities for their children that come from moving to a richer country. Yet Exodus never devotes a single line to policies that would help such groups emigrate.
To get a sense of just how big the gains that Collier brushes aside are, consider the following back-of-the-envelope calculation. Assume for a moment that everything Collier says is correct. He argues that there is an optimal level of emigration from low-income countries and that it lies somewhere between Bangladesh’s rate of around four percent, which he deems beneficial, and Haiti’s level of around ten percent, which he deems harmful. Many low-income countries have emigration rates far below four percent. If those rates were raised to four percent, that would mean about 13 million new immigrants (using the World Bank’s definition of low-income countries and its 2010 estimates of cross-country migration numbers). If all of them moved to OECD countries, the foreign-born population of the OECD countries would rise from 12 percent to 13 percent -- the same level found in the United States and far below the 20 percent share in Canada and the 27 percent share in Australia.
Those people would move from countries with average annual incomes of about $600 to countries where average incomes are over $30,000, transforming their lives and adding hundreds of billions of dollars to the world economy every year. In other words, even if one concedes Collier’s dubious moral and empirical claims about immigration, his own analysis suggests colossal potential gains from new immigration without substantial offsetting harm. But somehow, in his policy conclusions, Collier preoccupies himself exclusively with restricting immigration.
FACT AND FICTION
Soon, the young sandwich-makers incarcerated and then deported from Collier’s doorstep will have arrived in Algeria and Bangladesh, if they have not already. Some of the effects of their removal have been proved by stacks of economic studies; others are hypothetical. What research shows is that the economic value of those men’s labor will decline by 60 to 80 percent or more, reducing the size of the world economy; the job prospects of British workers will be essentially unaffected, given how little interest they have in low-wage service work; the British government will collect less tax revenue; Collier and his colleagues will pay slightly more for tea and cakes; and Algeria and Bangladesh will lose whatever money those men may have been sending home.
Beyond those well-documented effects, Collier posits other, wildly hypothetical effects: that the Oxonians strolling down Holywell Street will be able to gaze at one another with more trust and mutual regard, and that somehow people working in Algeria and Bangladesh will become more motivated to improve their lots and their countries. British national identity will also be protected, like an endangered species, for were England to become “an extension of Bangladesh,” Collier writes at one point, “it would be a terrible loss to global cultures.” Social science may one day prove all this speculation right, but not before other and better books arrive to lift the heavy burden of proof, serving up evidence in place of portentous insinuations and fearful “preventative policies.”
Collier laments the fact that the immigration debate has been marked by “high emotion and little knowledge.” That is true, yet Exodus exemplifies the problem. This book could have seriously engaged with the large literature on immigration and helped people without Collier’s training and position think through the complexities of the issue. Instead, Collier has written a text mortally wounded by incoherence, error, and overconfident leaps to baseless conclusions.