TAILIEUCHUNG - Immigration and Economic Growth

Measured at the societal level, a range of political, social, and technological changes may cause economic and social advances, apart from the business effi ciencies that may be generated by a single executive or corporation. Th e economic growth and prosperity enjoyed by most OECD nations in the 1990s might just as easily be traced to other causes such as the “peace divi- dend” from the end of the cold war, increased computerization, the baby boom ensuring record high workforce participation, and the increasing globalization of world trade. Th ere seems no reason to attribute the global growth. | Immigration and Economic Growth Gordon H. Hanson As the 2012 presidential campaign gets under way there will be intense public debate about the direction of economic policy. The continuing torpor of the . economy and mounting government debt oblige candidates to detail how they would improve prospects for economic growth and reduce the federal budget deficit. We are sure to hear a great deal about plans to lower taxes reduce government regulation improve . education and rebuild infrastructure. But it is a near certainty that no candidate will make immigration part of his or her vision for achieving higher rates of long-run economic growth. To be sure stump speeches will contain pat pronouncements about securing American borders restoring the rule of law or bringing undocumented immigrants out of the shadows depending on the candidate s political orientation. Yet it is a safe bet that after getting through these bullet points candidates will seek to change the subject. Immigration is a divisive issue that most national politicians prefer to avoid. President Obama checked his immigration box by making a halfhearted call for immigration reform in May 2011. That proposal was quickly buried under many more pressing items in his legislative outbox. Ignoring immigration may make short-run political sense but it is a mistake if the goal is to build a coherent economic strategy. Immigration policy affects the pace of innovation in the . economy the supply of labor by high-skilled workers the ability of regional economies to adjust to business cycle fluctuations and the Cato Journal Vol. 32 No. 1 Winter 2012 . Copyright Cato Institute. All rights reserved. Gordon H. Hanson is Professor of Economics at the University of California San Diego and Director of the Center on Emerging and Pacific Economies. 25 Cato Journal integrity of local state and federal government finances. While current policies tend to do a poor job on these counts designing a system that would .

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