Prejudice and Immigration

Guest post by Paolo Giordani and Michele Ruta*

Immigration policies are often driven by prejudices. In a recent paper, we argue that immigration prejudices in receiving economies tend to be self-fulfilling. In particular, anti-immigrant attitudes sustain restrictive policies that lower the economic benefits of immigration by reducing the quality of the migrant labor force, thus reinforcing initial prejudices. This suggests that immigration reforms in receiving economies, such as the one presently discussed in the U.S., have long term economic implications. We elaborate on this point in three simple steps.

First, what is the effect of immigration policy on the “quality” of migrants?

To tackle this question we need economic models that explicitly take into account how migration choices of foreign workers are formulated and how immigration policies alter such decisions. Several studies document that migrants are not a random sample of the population of the sending region, and that high and low-skill workers tend to respond differently to economic incentives and policy restrictions. In particular, high-skill migrants appear to be more internationally mobile than low-skill migrants and, hence, more responsive to changes in immigration policy in receiving economies.
   
As a result, a non-discriminatory restrictive immigration policy in a receiving country has two effects: it reduces the total inflow of migrants in the country and it negatively affects the skill composition of the incoming foreign labor force, as high-skill immigrants choose to migrate where restrictions are lower. In contrast, a more liberal immigration policy increases the total inflow of foreign workers and positively affects its skill composition, by attracting skilled migrants from the rest of the region.

Second, why are immigration prejudices self-fulfilling?

In short, the answer is that the interaction between beliefs on the economic benefits of immigration and (non-discriminatory) immigration restrictions generates multiple equilibria. A society that has an anti-immigrant prejudice (i.e. a society that anticipates that immigration will have small net benefits) will impose high barriers to immigration. Given the skilled migrants' higher international mobility, this policy will have the effect of crowding them out. The composition of immigration in the receiving economy will then be biased towards low-skill migrants, thus validating the initial pessimistic belief.

To the contrary, if a society has a pro-immigrant prejudice (i.e. it anticipates large net benefits from immigration) will set low restrictions to immigration. The effect of a liberal immigration policy will be to attract (highly mobile) skilled migrants and, hence, to improve the skill composition of the migrant labor force in the destination economy. This validates the initial (optimistic) belief. This self-fulfilling mechanism will sustain the endogenous formation of a prejudice pro- or anti-immigration. While clearly not the only explanation, our work thus sheds some light on why differences in attitudes towards immigration may be so rooted in different receiving societies.
   
Third, why are immigration reforms in receiving countries important?

This analysis contributes to the discussion on the proper design of immigration policy in host countries. It implies that the choice of the “right” policy may have a significant impact in the short run, as well as in the long run through the formation of attitudes towards immigration. First, a country must be careful in implementing restrictive non-discriminatory immigration policies to control the migration flow. The reason is that migration policies affect not only the number of immigrants but also their quality, and a restrictive policy could indirectly act as an instrument of selection of the lowest quality immigrants.

Secondly, while skills of foreign workers may be difficult to infer, several arguments have been proposed in favor of policies that filter applicants in terms of observable skills. This analysis adds to these arguments that selective policies may influence natives' attitude towards immigration and, hence, increase support for further reductions of barriers. In principle, an anti-immigration prejudice could "vanish" via a combination of rules that favor high-skill migrants with a more open migration policy.
 

* The views expressed herein are those of the author and should not be attributed to the IMF, its Executive Board, or its management.