Immigration myths: Economic arguments for closed borders

This post deals with common economic arguments people use to defend the "we need to close our borders for immigration"-position. I should say that economics is not my research focus, but the overview will show that there is not much evidence from findings in that discipline, as far as I know, that would substantiate an economic rationale for closing the borders. If politics was genuinely driven by an ambition to do what benefits the economy, borders would be opened up, not closed down.

Economic arguments

"Refugees don't need help, because they have cellphones so clearly they are well off"

Is that a reason to close the border? If they don't need our help, they won't use government services and can support themselves, so what is the problem with keeping the border open?

"We should take care of our own people before we let new people in"

This seems straight forward: "The pie in our country is limited. If more people get in, we all get a little less to get by." The problem with this line of thinking is that it doesn't take time into account. The pie actually grows over time. Most countries have experienced population growth over the past century, but in most cases, that did not result in lowered standards of living, but rather the opposite. Most of us are much better of today than our ancestors were a century ago. The number of jobs in modern democracies has increased together with population growth . It doesn't really matter if that growth is from fertility or immigration. As the population grows, so does the economy.

"We need to protect our jobs so that outsiders don't take them away from us"

This is related to the above argument and also frames the labour market as a zero-sum game, which means that it has the same weakness as the above. People who argue this apparently have such low confidence in the skills and productivity of your own compatriots that they want to use force to keep people out of the country. In fact, research shows that most immigrants a) do not compete for the same types of jobs as the native born do, because skill sets only partially match up and b) immigrants often create jobs over time that can end up employing the native born. See this overview, for example:

When South Africa was desegregated, a massive migration from remote areas to metropolitan centres started. If large numbers of migrants really do have negative effects on the economy, it should have happened. It didn't. Instead, average incomes rose by more than 50 %. White South Africans were not disadvantaged, their incomes rose by even more than average; 275 %.

Over time, immigrants contribute staggering numbers to the economy of their host countries, as well as to the public coffers. This has been consistently showed by the OECD and is a general consensus among economists, even economists who like closed borders.

"We need to stop poor countries from losing their best and brightest to brain drain, and should therefore close the borders to help them develop"

The brain drain issue arose as a concern in the 1980s and 90s and was given attention in the scholarship. It turns out that, over time, it wasn't much of an issue. Two things generally happened, sometimes both. 1) The migrants would send money to their relatives. This is known as remittances. These help the local economies in poor countries substantially, even more, some claim, than foreign aid.  2) The migrant gets professional expertise and education/training in the new country and then returns to the country of origin, bringing valuable experiences to benefit these economies. Closing the borders would hurt the economies of poor countries considerably.

It's quite cynical to say that armed guards should stop people from crossing the border "for their own good". One of the best policies any democratic government could adopt today to combat global poverty would be to open the borders for immigration to both refugees and others.

"There are too many refugees, the system can't handle them/it will cost too much to let them all in"

The problem with this assertion is that a) it is always made, regardless of how many refugees there actually are, and b) even when refugee streams peak, time is not taken into account (which seems like a theme for this category of concerns). Europe has confronted many periods when greater numbers of refugees emerged for one reason or another. One was in the aftermath of World War II, when millions of people were on the move, either going back home, or fleeing because they had been displaced by the changed borders. Another moment when refugee numbers rose was during the wars that developed as Yugoslavia collapsed.

Did these events create situations that were challenging to address for existing systems? Most likely. What happened over time? Answer: the refugees settled in, found work and became residents of those countries, many of them as naturalized citizens. It might have taken some months and sometimes even some years, but over time, problems dissipated. Twenty years later, nobody talks about Bosnian refugees as a problem group. The same thing happened to the Vietnamese refugees in the mid-70s, and the same will happen for the Syrians fleeing the war today if they are let in. They will form new communities, find work, start companies and settle in,

Also, refugee numbers have only limited effect on how well the post-migration situation develops. Instead, I propose paying more attention to the settlement bureaucracy. In my dissertation, I find that Sweden's poor integration outcomes are a result of a highly centralized bureaucracy that disempowers immigrants and pacifies them, effectively channeling them into permanent unemployment. But that is the system's fault, not the immigrants', and it is solved by less micro-management and by supporting decentralized services designed by immigrant communities, much as is being done in Canada and the United States. Thus, the greatest challenge for the successful integration of Syrian refugees, I would argue, will likely be government bureaucracies that make it difficult for them to settle.

Thus, most of the problems we are seeing now are created by the attempts of governments to close borders, not by people trying to move from one place to another. If the borders to Europe (and elsewhere) were open, people would be able to move and settle in new places without the tragic loss of life we currently see and with much lower economic costs to governments (those border policing and rescue efforts are not for free) and migrants. That lower cost would be translated into a quicker settlement and integration process. Everybody would win with less micro-management of borders.

"They are abusing the system and enriching themselves on arrival"

This is the "social tourism"-argument. "Immigrants", it says "are only out to become welfare moochers and come to live on the tax dollars of hard working native born people". Again, no. The argument has been used by politicians in many countries to close borders. When the EU expanded to include the Eastern European countries in 2005, the Swedish Prime Minister Göran Persson wanted to close the Swedish borders to migrants from the new EU countries using this argument as a rationale. He was defeated by parliament. Did the "mass invasion of welfare moochers" materialize? No. One reason is that access to social welfare occurs through a fairly complex regulatory framework which can be difficult enough for the native born to learn if they don't have to use it themselves, and even harder for migrants to learn about before arrival. Another is, simply, that migrants come to work. When they don't work, it's because governments have put regulations in place that prevent them from working. The primary outcome of Persson's play was to damage the government's relation to the Polish and other Easter European governments, whose citizens had just been stereotyped as lazy moochers. Meanwhile, the Poles went to the U.K. and Ireland, where there was work.

"Accepting too many refugees/immigrants will destroy the welfare state"

This argument, like many above, also builds on the "the pie isn't big enough to open the borders"-argument. Unlike some of those above, this argument can be construed to have some support from Milton Friedman in the sense that he is on record saying that a state with a welfare state cannot have open borders. His argument is that the social entitlements and programs will become too costly when too many immigrants arrive. He concludes that new arrivals should not have access to social programs for an open border policy to work.

I believe Friedman is wrong in this case. Most immigrants are of a working age and in good health. They will thus work and pay taxes, and since they've already gone through education somewhere else, the host society has to pay lower costs for schooling the new arrivals than it has to for those who are native born.

That is, if they are allowed to work. Friedman does have an important point with his critique of the welfare state - the programs that are supposed to do good actually end up doing a lot of bad. A perfect case in point is social welfare, which locks people into poverty through humiliating means-testing. There's a comprehensive literature showing how paternalist and disempowering the programs are (but that topic deserves a separate blog post). If the bureaucratic systems channel immigrants to social welfare, then they will be blocked from the labour market. Like I mentioned above, my dissertation argues that this is a problem in Sweden. That problem, however, is one that is best remedied by reforming the welfare system for everyone, not by closing the borders for immigrants.