Immigration and Unemployment

Economic forces are unquestionably significant for immigration policymaking in the United States and other receiving countries. From the earliest days of the American republic, political leaders saw cheap immigrant labor as a valuable means of fueling the nation's economic development. Indeed, state actors, businesses, labor unions, and other policy activists have never stopped viewing immigration as an important vehicle of labor recruitment in an international labor market.

Likewise, numerous labor economists persuasively highlight the “cost-benefit” calculations and economic motivations underlying much individual migration (although often in a manner that understates powerful social linkages between sending and receiving countries and between communities and families across national borders). Thomas (1973) found ample evidence that during periods of economic decline and high unemployment in receiving countries like the United States, immigrants can become political scapegoats for a host of societal woes.

During such times of economic distress, immigration often is both more salient and repellent to mass publics in receiving countries (Hollifield 1992; Brubaker 1995; Saxton 1971). The potential importance of economic conditions in the development of American immigration policy is undeniable. However, precisely how economic conditions influence immigration politics and whether they dictate policy choices is quite another matter. Immigration and Unemployment

Both Marxian and non-Marxian versions that emphasize economic interests of employers/capitalists suggest that demand for migrant labor is not constant but varies with the state of the economy. In periods of prosperity and economic growth, demand for immigrant labor will be high; in periods of recession, demand will be low. One way of operationalizing the economic interests of employers in immigrant labor is the unemployment rate. The relationship is anticipated to be negative; as unemployment increase, the demand for immigrant labor decreases; as unemployment declines, the demand for immigrant labor rises.

Another measure of the tightness of labor markets or the organizational strength of labor is the relative wage rate. Where tight labor markets or labor organization have forced employers to bid up the price of labor, the demand for immigrant labor should be stronger. Because labor markets are not fully integrated internationally, firms face different national relative prices of labor. The relative price of labor is operationalized as the standardized hourly real wage rate and is anticipated to be positive: as the wage rate increases, the demand for immigrant labor increases.

Labor market conditions, however, may not be the only reason why the demand for immigrant labor varies. As Zolberg (1983, p. 37) notes, "Because there is no such thing as an absolute labor shortage, importation is always a convenience rather than a necessity. It will be dispensed with should economic or sociopolitical costs go up, and capital often has the alternative of shifting to more capital intensive production or of moving its operations to low-wage sites abroad. " Bhagwati (1984, p. 696) also explains "the differential resort to importation of foreign labor" by the "differential demand factors across .

. . industries. " If competition for economic, social, and cultural resources is large, society prefers lower levels of immigration, whereas cooperative or complementary relationships generate neutral or positive attitudes. Competition, however, is not constant but is intensified by a variety of factors. Economic recession decreases the availability of resources and magnifies competition; a rapid increase in the number of immigrants can also increase the competition between the native and immigrant populations.

The structural features that generate greater competition are operationalized as unemployment and the proportional change in the annual immigration intake. Both relationships are expected to be negative. As unemployment and immigration rates increase, ethnic competition increases, and the state responds by decreasing the level of immigration. Statistically, the only economic variable that is systematically associated with immigration flows is unemployment. It reflects the hypothesized direction that “as unemployment increases, immigration decreases” (Money 1999, p.

41). Both unemployment and immigration growth remain statistically significant, regardless of time frame. Conclusion and Immigration Policy Proposal Gaps between policies intended to control immigration and immigration outcomes are not peculiar to the United States. These gaps are common to most immigrant-receiving countries. Unintended outcomes of immigration policies often result from external pressures, such as increasing economic openness in developing countries. In the short run, economic instability may stimulate even more emigration.

Moreover, domestic pressures to restrict immigration may conflict with fundamental human rights guaranteed by liberal democracies. As a result, current immigration policies of the Unites States still necessitate reviews and enhancements. Despite the fact that unemployment is greatly associated with immigration, there is still a need for the U. S. to numerically increase immigration. This is for the reason that in the near future the economy will continue to globalize, and it will force countries to adopt more free-market policies in order to remain competitive with other nations.

It seems unlikely that legal immigration will be drastically limited in an era of free trade and free markets. As proimmigrationists point out, “immigrants provide the United States with tremendous human capital at little cost”. On one the other hand, immigration policy proposal can be strongly based on the root cause of unemployment – illegal immigration, since real labor recruitment immigration policy comes through illegal immigration. This condition satisfies employers and some ethnic group mobilization leaders and service providers.

In line with this, employer sanctions and penalties on employers who hire undocumented workers is the most prominent policy proposal in reducing illegal immigration. These proposals are not new to the debate over U. S. immigration policy but over time such implementation were unsuccessful. After several researches, it is proven that the only consistently robust determinants of immigration levels were unemployment and rate of change in immigration flows. Apparently, the rise in unemployment is connected to decreased levels of immigration.

Immigration does not always promise to solve labor shortage nor it is the sole accountable of unemployment.


Bhagwati, Jagdish N. (1984). "Incentives and Disincentives: International Migration. " Weltwirtshaftliches Archiv. 120(4), pp. 678-701. Brubaker, R. (1995 Winter). “Comments,”International Migration Review. 29(4), pp. 903–8. Hollifield, J. (1992). Immigrants, Markets, and States: The Political Economy of Postwar Europe. Harvard University Press: Cambridge. Money, J. (1999). Fences and Neighbors: The Political Geography of Immigration Control.

Cornell University Press: Ithaca, NY. Saxton, A. (1971). The Indispensable Enemy: Labor and the Anti-Chinese Movement in California. University of California Press: Berkeley and Los Angeles. Thomas, B. (1973). Migration and Economic Growth. Cambridge University Press: Cambridge. Zolberg, Aristide R. (1983). "Contemporary Transnational Migrations in Historical Perspective: Patterns and Dilemmas," In Mary M. Kritz, ed. , U. S. Immigration and Refugee Policy: Global and Domestic Issues. Lexington Books: Lexington, Mass.