8

Historical Background to Current Immigration Issues

Susan B. Carter and Richard Sutch

Immigration has had a long history in the United States. For the most part, however, it was seldom treated dispassionately even when an attempt was made only to ascertain the pertinent facts and their reliability. Books and innumerable articles were written to "prove" that immigration did not contribute to the population growth of this country because immigration depressed the fertility rate of the native population: that immigration, if it continued, would result in race suicide of the Nordic element; that immigration was a threat to "American" institutions, etc. For this reason much of the literature on the subject is almost worthless.

Simon Kuznets and Ernest Rubin (1954:87)

INTRODUCTION

As background for the work of the Panel on Demographic and Economic Impacts of Immigration, we present a broad overview of the scholarly literature on the impacts of immigration on American life in the late nineteenth and early twentieth centuries.

We emphasize at the outset that this is a formidable undertaking. There is an enormous literature on the subject ranging over every conceivable genre. These include nineteenth-century political broadsides, serious and masterfully written histories, the 42 volume report of the first Immigration Commission appointed in 1907, focused cliometric studies appearing in scholarly journals, autobiographies that witness the era of high immigration, two forthcoming economic histories of pre-World War I immigration (Ferrie, 1997; Hatton and Williamson, 1998), obscure statistical compendia, and theoretical analyses some of which are highly abstract and mathematically intricate.

The subject is also emotional and controversial. In the past, as today, immigration policy arouses strong feelings and in some cases these have colored the analysis offered. As Kuznets and Rubin suggested, dispassionate inquiry is hard to find. Many authors express their conclusions with a degree of certitude that is difficult to justify from the evidence they offer. Writers on opposite sides often have failed to take account of the evidence and arguments of their opponents. On



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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration 8 Historical Background to Current Immigration Issues Susan B. Carter and Richard Sutch Immigration has had a long history in the United States. For the most part, however, it was seldom treated dispassionately even when an attempt was made only to ascertain the pertinent facts and their reliability. Books and innumerable articles were written to "prove" that immigration did not contribute to the population growth of this country because immigration depressed the fertility rate of the native population: that immigration, if it continued, would result in race suicide of the Nordic element; that immigration was a threat to "American" institutions, etc. For this reason much of the literature on the subject is almost worthless. Simon Kuznets and Ernest Rubin (1954:87) INTRODUCTION As background for the work of the Panel on Demographic and Economic Impacts of Immigration, we present a broad overview of the scholarly literature on the impacts of immigration on American life in the late nineteenth and early twentieth centuries. We emphasize at the outset that this is a formidable undertaking. There is an enormous literature on the subject ranging over every conceivable genre. These include nineteenth-century political broadsides, serious and masterfully written histories, the 42 volume report of the first Immigration Commission appointed in 1907, focused cliometric studies appearing in scholarly journals, autobiographies that witness the era of high immigration, two forthcoming economic histories of pre-World War I immigration (Ferrie, 1997; Hatton and Williamson, 1998), obscure statistical compendia, and theoretical analyses some of which are highly abstract and mathematically intricate. The subject is also emotional and controversial. In the past, as today, immigration policy arouses strong feelings and in some cases these have colored the analysis offered. As Kuznets and Rubin suggested, dispassionate inquiry is hard to find. Many authors express their conclusions with a degree of certitude that is difficult to justify from the evidence they offer. Writers on opposite sides often have failed to take account of the evidence and arguments of their opponents. On

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration many aspects of the question a modern consensus of scholarly opinion cannot be found. The economic impact of immigration is a complex issue and one that simple models of supply and demand do not address very well. Indeed, even predictions derived from elaborate general equilibrium models are only as good as the assumed linkages across disparate sectors of the economy. Because of the complexity of the social science, it has become easy for partisans in the debate to ignore scholarly work altogether or to pick and choose studies compatible with their preconceptions from the wide array of findings reported in the literature. Nevertheless, we believe that it is possible to survey the literature and extract a list of tentative conclusions. These identify rather dramatic differences in the immigrant flows and in immigration's probable impacts between the earlier era of mass immigration and immigration today. Not everyone will agree with our distillation nor welcome our attempt to cover such an intractable subject with the guise of apparent order. Our "findings" might be better read as provocation for further research. Nevertheless, the process of writing this chapter has convinced us, at least, that this entire area is ripe with important and researchable topics. To encourage debate, we begin by summarizing our findings regarding four interrelated topics. FINDINGS The Magnitude and Character of Immigrant Flows Immigrant flows were larger in the past. This is true whether the flows are measured relative to the size of the resident population or to its growth rate. Immigration around the turn of the century was dominated by single males of young working ages. Today's flows include many more women and children. Many of the immigrants during the period of high immigration were sojourner workers who came to the United States to work for a few years and then return to their home country. Today's immigrants are far more likely to be reuniting with family members in this country or to be refugees. Far more than was ever true in the past, today's immigrants come to stay. In the past, immigrant flows were highly responsive to economic conditions in the United States. The numbers swelled when the U.S. economy was booming, wages were rising, and unemployment was low. They ebbed when the economy was depressed. Emigration, the return flow, was highest during American depressions and was reduced during booms. Today the ebbs and flows over time are related to political —not economic—conditions. In particular, some of the largest annual flows in recent years occurred during periods of economic recession in the United States. In the past, America selected people with above-average skills and backgrounds from their countries of origin. Today this pattern still holds for some sending countries, but is less clear for some others.

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration In the past, immigrants took jobs that were concentrated near the middle of the American occupational distribution. There were significant numbers of native-born American workers both below and above the strata occupied by the foreign-born labor force. Today the occupational distribution of immigrants is bimodal, with one group displaying much higher and the other much lower skills than the resident American work force. Immigration and Economic Growth Immigration's impact on American economic growth has been the major focus of the scholarship on the previous episode of high immigration. This work suggests that immigration caused the size of the American economy to grow more rapidly than would have been the case in the absence of immigration. The key mechanisms emphasized in the literature are the high labor force participation rate of immigrants; immigration-induced capital flows from abroad, particularly from immigrants' countries of origin; high immigrant saving rates; much of this saving was invested in residential structures and in the capital necessary to operate self-owned businesses; the role of immigration in stimulating inventive activity; the role of immigration in allowing the economy to take advantage of economies of scale; and immigrants' importation of significant stocks of human capital into the United States. Immigration and the American Income Distribution Immigration's impact on American income distribution has been much less emphasized in the scholarship on turn-of-the-century immigration. Income inequality appears to have grown over the period of mass immigration, but it is not clear what role immigration played in this development. Key conclusions in the literature are There is no evidence that immigrants permanently lowered the real wage of resident workers overall in the nineteenth and early twentieth centuries. There is no evidence that international immigrants increased the rate of unemployment, took jobs from residents, or crowded resident workers into less attractive jobs. There is no evidence that the early twentieth-century immigrant community placed a disproportionate burden on public charitable agencies or private philanthropies. The turn-of-the-century educational system does not appear to have been

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration an important arena for transferring resources between the foreignand native-born populations. There is some evidence that immigration may have reduced regional differences in income inequality. On the other hand, there is no consensus regarding the impact of immigration on racial wage differentials. A number of scholars argue that the flow of European-born workers into the rapidly growing industrial cities of the North may have helped to delay the migration of blacks from the South to the North. If it delayed black migration, then immigration from abroad also would have delayed the convergence of black and white incomes. Immigration and the Character and Quality of American Life There is a broad consensus that immigration did not depress the fertility of the native-born population. The children of nineteenth- and early twentieth-century immigrants appear to have assimilated rather quickly into the mainstream of American life. THE MAGNITUDE AND CHARACTER OF IMMIGRANT FLOWS Immigration to the United States has increased steadily in the post-World War II period.1 In 1995, the latest year for which data are available, the number of immigrants admitted into the United States was three times the annual flow between 1951 and 1960 and nearly double that of the 1970s. 2 Figure 8-1 displays 1   ''Immigrants" are aliens who have been admitted into the United States for legal, permanent residence. In the post-World War II period, immigrants account for only a small fraction of the total number of aliens who arrive in the United States each year (Bureau of the Census, 1996:Table 7, p.11). In recent years the number of nonimmigrant aliens exceeds the number of immigrants by approximately twentyfold. Note that the data on nonimmigrants count arrivals rather than individuals so a person making multiple visits would be counted once for every visit. The overwhelming majority of these nonimmigrants are tourists, business travelers, and people in transit. Students are another important category of alien nonimmigrants. The number of alien nonimmigrant student arrivals each year is about half as great as the total number of people admitted as immigrants. Over the past ten years the number of temporary workers and trainees has grown very rapidly to become another important category of alien nonimmigrants. In 1995, the latest year for which data are available, the number of temporary workers admitted was almost as great as the number of students. Illegal border crossers, crewmen, and "insular travelers" are a third category of aliens who enter the country. They are not included in any of the totals reported here. 2   The number of immigrants admitted in 1993 was 880,000 exclusive of those admitted under the legalization adjustments permitted by the IRCA. The number of immigrants admitted during the years 1951 –1960 was 2.5 million and between 1971 and 1980 it was 4.5 million (Bureau of the Census, 1996: Tables 5 and 6, p.10). 3   These are the "official" numbers as published by the U.S. Immigration and Naturalization Service in its annual Statistical Yearbook (1997:Table 1, p. 27). Also see Bureau of the Census (1975/ 1997, series C89; 1996:Tables 5 and 6).

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration FIGURE 8-1 Immigrants to the United States, 1950–1995. the number of legal immigrants arriving in the United States annually between 1950 and 1995.3 The spike in the graph for the years 1989 through 1992, shown by the dashed line, includes persons granted permanent residence under the legalization program of the Immigration Reform and Control Act (IRCA) of 1986. Even excluding these "special" immigrants, the figure shows a pronounced upward trend in immigration over the last third of the century. Moreover, if the response to the IRCA can be interpreted as some measure of the "excess supply" of potential immigrants, then the pressure on American borders may have grown much faster than the numbers plotted in Figure 8-1 would suggest. As a direct consequence of the recent increase in immigration, the fraction of the American population that is foreign born has risen dramatically. Figure 8-2 charts this change for the post-World War II period.4 In the 1950s and 1960s, the small number of immigrants, together with the high fertility of the native population, meant that the fraction of the population that was foreign born actually declined. In 1950 the foreign born comprised 6.9 percent of the population; by 1970 their share had dropped to only 4.8 percent. The increasing numbers of immigrants after 1970 led to a reversal of this downward trend. By 1990 the foreign born had surpassed their 1950 share, accounting for 7.9 percent of the 4   Bureau of the Census (1975/1997, series A91; 1990:Table 253; 1993:Table 1).

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration FIGURE 8-2 Foreign born as a percentage of the U.S. population, 1950 –1990. population. A recent news release by the Census Bureau puts the 1996 share at 9 percent. Because immigrants tend to be young adults, the recent increase in immigration has had a disproportionate impact on the population in the age range of 20 to 40 years. This is shown in Figure 8-3, which plots the fraction of the foreign-born population by age at three post-World War II census dates.5 In 1950, and even more so in 1970, the foreign born tended to be older than the average American. These people had migrated to the United States in the early decades of the century when they were in their late teens and early twenties. By the post-World War II period, they had aged, but the long period of reduced immigration beginning in the 1920s and lasting through 1970 meant that there were far fewer new recruits at the lower end of the age spectrum. The resumption of heavier immigration in the 1980s and 1990s substantially altered the age structure of the foreign-born population. Because the new immigrants were disproportionately 5   Bureau of the Census (1975/1997, series A119-A134; 1984:Table 253; 1993:Table 1).

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration FIGURE 8-3 Foreign born as a percentage of the U.S. population, 1950, 1970, and 1990. young adults, their arrival increased the foreign-born fraction of the population in the economically active age groups. It is no wonder that the current policy debate over immigration centers on labor market and employment impacts (Borjas, 1995). Current Flows in Historical Perspective The level of immigration in the 1980s and 1990s is certainly high in the context of the immediate post-World War II decades—and, indeed, in the experience of almost all of the native-born population of the United States today. Yet it is relatively modest from the perspective of the experience in the period 1880–1914, the era of "mass immigration." Figure 8-4 displays the numbers of immigrants admitted into the United States over the period 1820–1995. This is the same series as the one displayed in Figure 8-1; Figure 8-4 presents this series over 6   These are the "official statistics" of immigration which are the result of the Passenger Act of March 2, 1819, that required the captain of each vessel arriving from abroad to deliver a manifest of all passengers taken on board in a foreign port, with their sex, age, occupation, country of origin, and whether or not they intended to become inhabitants of the United States. These reports were collected and abstracted for the period 1820–1855 by Bromwell (1856/1969), for the period 1820–1874 by the Secretary of State, for the period 1867–1895 by the Treasury Department's Bureau of Statistics, and since 1892 by the Office or Bureau of Immigration which is now part of the U.S. Immigration and Naturalization Service (1997). The statistics for the period 1820–1910 were compiled by the U.S. Immigration Commission (1911:Volume 1, Table 1, p. 56). The defects of the official series are well known (Bureau of the Census, Historical Statistics of the United States, 1975/1997:97–98, series C89; Jerome, 1926:29–33; Kuznets and Rubin, 1954:55–64; Hutchinson, 1958; Thomas, 1954/1973:42–50; McClelland and Zeckhauser, 1983:32–35; and Schaefer, 1994:55–59). The chief biases are the following: (1) the figures apparently exclude first-class passengers for the early decades, (2) they may include some passengers who died en route, (3) before 1906 they exclude immigrants arriving by land from British North America (Canada) and Mexico, (4) immigrants arriving at Pacific ports before 1849 and at Confederate ports during the Civil War are excluded, and (5) the data measure gross rather than net immigration. Despite these imperfections the official series is thought to measure gross flows reasonably well.

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration FIGURE 8-4 Immigrants to the United States, 1820–1995. a longer period of time.6 Although the spike of 1991, reflecting the response to the IRCA, still stands out, the chart reveals that the number of immigrants admitted through normal channels in the recent period is decidedly smaller than the number admitted in the first decade of the twentieth century. Moreover, the United States was a much smaller country early in the century. To put the current immigration flows into proper perspective, we deflate the numbers of immigrants by the number of people resident in the United States at 7   The data in Figure 8-5 have been extended back to 1790, and the data before the Civil War have been corrected for the undercounts noted in footnote 6. The figures for 1790–1799 are from Bromwell (1856/1969:13–14) and should be considered as nothing more than educated guesses by contemporaries Blodget (1806/1964) and Seybert (1818). The data for 1800–1849 are estimates made by McClelland and Zeckhauser (1983:Table A-24, p. 113). Those for 1850-1859 are estimates by Schaefer (1994:Table 3.1, p 56). Thereafter the official statistics from the U.S. Immigration and Naturce are used (1997:Table 1, p. 27). The resident population is taken from Bureau of the Census (1975/1997, series A7; 1996:Table 2, p. 8).

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration FIGURE 8-5 Immigrants to the United States, 1790–1990 (per thousand of resident population). the time of the immigrants' arrival and display the result in Figure 8-5.7 Our calculations reveal that, in proportionate terms, the current inflow of immigrants is rather modest. If we look only at the "regular" immigrants—that is, exclusive of those admitted under the IRCA—then the current inflows approximate those in the very slowest years from the period between 1840 and the onset of World War I. Before the imposition of a literary test for admission in 1917 (overriding President Wilson's veto) and the passage of the Emergency Quota Act in May 1921, only the disruptions of World War I pushed the flow of immigrants relative to the native population to levels below the relatively low levels that we experience today.8 Immigration as a Source of Population Change As a consequence of the large and persistent immigrant flows in the 1845–1914 period, the foreign born came to comprise a rather large fraction of the total population. Figure 8-6 shows that, in the years between 1860 and 1920, the number of resident Americans born abroad ranged between 13 and 15 percent of the total population (Bureau of the Census, 1975/1997, series A91). The foreign-born 8   Goldin (1994) discusses the legislative and political history of immigration restriction.

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration FIGURE 8-6 Foreign born as a percentage of the U.S. population, 1850 –1990. born fraction of the population in that period was approximately three times the level recorded in 1970 and over one and one-half times as high as it is today. The historical record thus reveals that the numerical impact of immigration flows were once substantially larger than what we have now and were also larger than the levels we are likely to experience in the foreseeable future. Thus we are tempted to suggest that the economic and demographic consequences of immigration in the 1845–1914 period are likely to have been greater than the impact of immigration flows today. Yet any comparative analysis should explicitly incorporate at least three ways in which the situation today is different from that of the era of mass immigration. First, the structure of the economy and labor market have changed. Some would say the structure is both more complex and less flexible and that labor markets are more segmented. Second, the government is a much larger entity both in terms of the resources it consumes and the fraction of national income it reallocates through tax and transfer mechanisms. Third, immigration is now regulated. We return to these points later in this chapter.

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The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration FIGURE 8-7 Age distribution of immigrants to the United States, 1907 –1910 compared with 1992–1995. Age and Gender of Immigrants The overwhelming proportion of immigrants are young adults. This is true today and it was so in the early years of the twentieth century as well. Figure 8-7 contrasts the age distribution of immigrants in 1907–1910 with that for immigrants in 1992–1995.9 Clearly, the propensity to immigrate is strongest from 9   The data for 1909–1910 are based on the Public Use Microdata Sample from the enumerator's manuscripts for the 1910 population census. We use the version of this sample that was prepared in a way that improves their comparability with census samples from other years. This file is known as the Integrated Public Use Microdata Sample or IPUMS (see Ruggles and Sobek, 1995). All immigrants (both males and females) who reported arriving in the United States in 1907 or after were included (n = 7658). This census was taken on April 15, 1910. The sample thus includes all 1907–1909 immigrants and slightly more than one-fourth of the 1910 arrivals. The 1992–1995 data are based on the March Current Population Surveys, or CPS, of the Bureau of Labor Statistics for 1994 and 1995. They include all immigrants who reported a permanent move to the United States during or after 1992. All migrants residing in the United States in 1994 or 1995 who immigrated in 1992–1994 and the first few months of 1995 are included (n = 3841).

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