American Political Science Review Vol.104.No.1 February 2010 doi:10.1017/S0003055409990372 Attitudes toward Highly Skilled and Low-skilled Immigration: Evidence from a Survey Experiment JENS HAINMUELLER Massachusetts Institute of Technology MICHAEL J.HISCOX Harvard University ast research has emphasized two critical economic concerns that appear to generate anti-immigrant sentiment among native citizens:concerns about labor market competition and concerns about the fiscal burden on public services.We provide direct tests of both models of attitude formation using an original survey experiment embedded in a nationwide U.S.survey.The labor market competition model predicts that natives will be most opposed to immigrants who have skill levels similar to their own. We find instead that both low-skilled and highly skilled natives strongly prefer highly skilled immigrants over low-skilled immigrants,and this preference is not decreasing in natives'skill levels.The fiscal burden model anticipates that rich natives oppose low-skilled immigration more than poor natives,and that this gap is larger in states with greater fiscal exposure (in terms of immigrant access to public services).We find instead that rich and poor natives are equally opposed to low-skilled immigration in general.In states with high fiscal exposure,poor (rich)natives are more (less)opposed to low-skilled immigration than they are elsewhere.This indicates that concerns among poor natives about constraints on welfare benefits as a result of immigration are more relevant than concerns among the rich about increased taxes. Overall the results suggest that economic self-interest,at least as currently theorized,does not explain voter attitudes toward immigration.The results are consistent with alternative arguments emphasizing noneconomic concerns associated with ethnocentrism or sociotropic considerations about how the local economy as a whole may be affected by immigration. hy do people oppose or favor immigration? sentiment and that individual attitudes toward immi- Recent scholarly work examining survey data gration are profoundly shaped by fears about labor on individual attitudes toward immigration market competition(Kessler 2001:Mayda 2006:Scheve has generated inconsistent findings and no clear con- and Slaughter 2001)and/or the fiscal burden on public sensus view.Many studies suggest that opposition services (Facchini and Mayda 2009;Hanson 2005; to immigration is primarily driven by noneconomic Hanson.Scheve,and Slaughter 2007).Borjas (1999) concerns associated with cultural and ethnic tensions identifies these as the two critical economic issues that between native and immigrant populations (Bauer, have dominated the debate over immigration policy Lofstrom,and Zimmerman 2000;Burns and Gim- in the United States.Simon(1989)has identified them pel 2000;Chandler and Tsai 2001;Citrin et al.1997; as the two key concerns motivating anti-immigrant Dustmann and Preston 2007;Espenshade and Hemp- sentiment in Britain.But there is no agreement among stead 1996;Fetzer 2000;Gang,Rivera-Batiz,and Yun scholars about the relative impact of these different 2002:Lahav 2004:McLaren 2003).These studies em- types of economic concerns or how they compare in phasize noneconomic differences between individuals importance with noneconomic considerations that in terms of ethnocentrism and ideology in explaining also motivate anti-immigrant sentiment.Resolving attitudes toward immigrants and connect to an exten- these questions is critical for understanding public sive body of empirical research indicating that material opposition to immigration and the growth of extremist, self-interest rarely plays a role in shaping people's opin- often violent,anti-immigrant political movements. ions about major policy issues(Kinder and Sears 1981: One reason there is no consensus on why people Sears and Funk 1990:Sears et al.1980). support or oppose immigration is that the data on indi- A very different set of studies argue that material vidual attitudes are ill-suited to testing the theoretical economic concerns lie at the heart of anti-immigrant relationships at issue.Studies examining economic concerns about immigration typically begin with a Jens Hainmueller is Assistant Professor,Department of Political general equilibrium model and derive predictions Science,Massachusetts Institute of Technology,77 Massachusetts about how native citizens who own different types Avenue,Cambridge,MA 02139(jhainm@mit.edu) of productive factors,and who have different levels Michael J.Hiscox is Clarence Dillon Professor of Interna- of income,will differ in their views regarding highly tional Affairs,Department of Government,Harvard Univer- skilled and low-skilled immigration (Facchini and sity,1737 Cambridge Street,Cambridge,MA 02138 (hiscox@fas harvard.edu). Mayda 2009;Hanson,Scheve,and Slaughter 2007; Both authors are affiliated with Harvard's Institute for Quan- Mayda 2006;Scheve and Slaughter 2001).However, titative Social Science (IQSS)which generously provided funding due to data constraints,none of these studies have been for the survey.We thank Alberto Abadie,George Borjas,Giovanni able to test these specific predictions directly.They rely Facchini,Gordon Hanson,Gary King.David Lynch,Anna Mayda, Dani Rodrik.Ken Scheve,Matthew Slaughter,Dustin Tingley,the instead upon indirect tests that leave the interpretation co-editors,and five anonymous reviewers for very helpful comments. of the results wide open.In particular,no study to The usual disclaimer applies. date has been able to distinguish between attitudes 61
American Political Science Review Vol. 104, No. 1 February 2010 doi:10.1017/S0003055409990372 Attitudes toward Highly Skilled and Low-skilled Immigration: Evidence from a Survey Experiment JENS HAINMUELLER Massachusetts Institute of Technology MICHAEL J. HISCOX Harvard University Past research has emphasized two critical economic concerns that appear to generate anti-immigrant sentiment among native citizens: concerns about labor market competition and concerns about the fiscal burden on public services. We provide direct tests of both models of attitude formation using an original survey experiment embedded in a nationwide U.S. survey. The labor market competition model predicts that natives will be most opposed to immigrants who have skill levels similar to their own. We find instead that both low-skilled and highly skilled natives strongly prefer highly skilled immigrants over low-skilled immigrants, and this preference is not decreasing in natives’ skill levels. The fiscal burden model anticipates that rich natives oppose low-skilled immigration more than poor natives, and that this gap is larger in states with greater fiscal exposure (in terms of immigrant access to public services). We find instead that rich and poor natives are equally opposed to low-skilled immigration in general. In states with high fiscal exposure, poor (rich) natives are more (less) opposed to low-skilled immigration than they are elsewhere. This indicates that concerns among poor natives about constraints on welfare benefits as a result of immigration are more relevant than concerns among the rich about increased taxes. Overall the results suggest that economic self-interest, at least as currently theorized, does not explain voter attitudes toward immigration. The results are consistent with alternative arguments emphasizing noneconomic concerns associated with ethnocentrism or sociotropic considerations about how the local economy as a whole may be affected by immigration. Why do people oppose or favor immigration? Recent scholarly work examining survey data on individual attitudes toward immigration has generated inconsistent findings and no clear consensus view. Many studies suggest that opposition to immigration is primarily driven by noneconomic concerns associated with cultural and ethnic tensions between native and immigrant populations (Bauer, Lofstrom, and Zimmerman 2000; Burns and Gimpel 2000; Chandler and Tsai 2001; Citrin et al. 1997; Dustmann and Preston 2007; Espenshade and Hempstead 1996; Fetzer 2000; Gang, Rivera-Batiz, and Yun 2002; Lahav 2004; McLaren 2003). These studies emphasize noneconomic differences between individuals in terms of ethnocentrism and ideology in explaining attitudes toward immigrants and connect to an extensive body of empirical research indicating that material self-interest rarely plays a role in shaping people’s opinions about major policy issues (Kinder and Sears 1981; Sears and Funk 1990; Sears et al. 1980). A very different set of studies argue that material economic concerns lie at the heart of anti-immigrant Jens Hainmueller is Assistant Professor, Department of Political Science, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA 02139 (jhainm@mit.edu). Michael J. Hiscox is Clarence Dillon Professor of International Affairs, Department of Government, Harvard University, 1737 Cambridge Street, Cambridge, MA 02138 (hiscox@fas. harvard.edu). Both authors are affiliated with Harvard’s Institute for Quantitative Social Science (IQSS) which generously provided funding for the survey. We thank Alberto Abadie, George Borjas, Giovanni Facchini, Gordon Hanson, Gary King, David Lynch, Anna Mayda, Dani Rodrik, Ken Scheve, Matthew Slaughter, Dustin Tingley, the co-editors, and five anonymous reviewers for very helpful comments. The usual disclaimer applies. sentiment and that individual attitudes toward immigration are profoundly shaped by fears about labor market competition (Kessler 2001;Mayda 2006; Scheve and Slaughter 2001) and/or the fiscal burden on public services (Facchini and Mayda 2009; Hanson 2005; Hanson, Scheve, and Slaughter 2007). Borjas (1999) identifies these as the two critical economic issues that have dominated the debate over immigration policy in the United States. Simon (1989) has identified them as the two key concerns motivating anti-immigrant sentiment in Britain. But there is no agreement among scholars about the relative impact of these different types of economic concerns or how they compare in importance with noneconomic considerations that also motivate anti-immigrant sentiment. Resolving these questions is critical for understanding public opposition to immigration and the growth of extremist, often violent, anti-immigrant political movements. One reason there is no consensus on why people support or oppose immigration is that the data on individual attitudes are ill-suited to testing the theoretical relationships at issue. Studies examining economic concerns about immigration typically begin with a general equilibrium model and derive predictions about how native citizens who own different types of productive factors, and who have different levels of income, will differ in their views regarding highly skilled and low-skilled immigration (Facchini and Mayda 2009; Hanson, Scheve, and Slaughter 2007; Mayda 2006; Scheve and Slaughter 2001). However, due to data constraints, none of these studies have been able to test these specific predictions directly. They rely instead upon indirect tests that leave the interpretation of the results wide open. In particular, no study to date has been able to distinguish between attitudes 61
Attitudes toward Immigration February 2010 toward highly skilled immigrants and attitudes toward Overall,the results indicate that existing political- low-skilled immigrants,even though this distinction economic models do not provide reliable guides to is a critical feature of the theoretical story about individual attitudes toward immigration.Material self- how economic concerns affect attitude formation and interest,at least as currently theorized,does not appear policy preferences with respect to immigration. to be a powerful determinant of anti-immigrant senti- To test claims about how economic concerns shape ment.The results are more consistent with alternative attitudes toward immigration,we conducted a unique arguments about attitude formation that emphasize survey experiment that,for the first time,explicitly noneconomic concerns among voters,associated with and separately examines individuals'attitudes toward ethnocentrism or sociotropic considerations about how highly skilled and low-skilled immigrants.In a nation- the local economy as a whole may be affected by im- wide U.S.survey,we randomly assigned respondents migration. to answer questions about immigrants with different skill levels,thereby obtaining an unbiased comparison between the distributions of attitudes toward highly ECONOMIC CONCERNS AND skilled and low-skilled immigrants.This comparison, ATTITUDES TOWARD IMMIGRATION and how it varies with respondent characteristics,al- Although immigration may impact the native economy lows us to directly test the predictions of the theoretical in many ways,recent research has emphasized two models about how economic concerns affect attitudes critical economic concerns that could generate anti- toward immigration. immigrant sentiment among native citizens:concerns The experiment yields results that present a major about labor market competition and fears about the challenge for existing political-economic models and fiscal burden on public services.General equilibrium the conclusions reached in many well-cited studies of models of the native economy generate a variety of attitudes toward immigration.The prominent labor predictions about how natives with particular skill and market competition model predicts that natives will income characteristics should be affected by inflows of be most opposed to immigrants who have skill levels immigrants. similar to their own.This is rejected by the data.We find that both highly skilled and low-skilled respon- dents strongly prefer highly skilled immigrants over Labor Market Competition low-skilled immigrants,and this preference is not de- creasing in respondents'skill levels.Support for both Analysis of the income effects of immigration typically highly skilled and low-skilled immigration is strongly begins with a closed-economy "factor-proportions" increasing in respondents'skill levels.In addition,these (FP)analysis(Borjas 1999;Borjas,Freeman,and Katz relationships are similar for the subsamples of respon- 1996,1997).The FP model derives the distributional dents that are currently in or currently out of the labor effects in the native economy from the impact that force.The results suggest that,among natives generally, immigration has on the relative supplies of factors labor market competition is not a significant motivator of production.If immigrants have low skill endow- of anti-immigrant sentiment. ments compared with natives,immigration will raise The fiscal burden model anticipates that rich (high- the supply of low-skilled labor relative to other fac- income)natives oppose low-skilled immigration and tors (including highly skilled labor).These changes in favor highly skilled immigration more than do poor relative factor supplies translate into changes in real (low-income)natives,and that this difference should factor returns:wages of native low-skilled workers will be more pronounced in states with greater fiscal ex- fall as new (low-skilled)immigrants price themselves posure in terms of immigrant access to public ser- into employment;and,as more low-skilled labor is ap- vices.We find instead that rich and poor natives both plied to fixed amounts of the other factors.the real equally prefer highly skilled over low-skilled immigra- wages of highly skilled workers will rise.The reverse tion most of the time.In addition,the premium at- effects are expected in the case of inflows of highly tached to highly skilled versus low-skilled immigration skilled immigrants,which will drive up the real wages is decreasing with the income levels of natives in states of low-skilled natives while reducing real returns for with high fiscal exposure,where the welfare effects are highly skilled natives.Depending on what one assumes expected to be strongest.Rich natives are actually less about wage flexibility,the impact of competition with opposed to low-skilled immigration in states with high similarly skilled immigrants may also be manifested fiscal exposure than they are elsewhere.These results in higher rates of unemployment among natives.The are inconsistent with claims that rich natives are op- FP model generates a clear prediction about attitudes posed to low-skilled immigrants because they antici- toward immigration:natives should oppose immigrants pate a heavier tax burden associated with the provi- with similar skill levels but favor immigrants with dif- sion of public services.Moreover,we do find evidence ferent skill levels.2 that poor natives are more opposed to low-skilled im- migration in states with greater fiscal exposure than they are elsewhere,suggesting that concerns about ac- Alternative models also allow for geographic concentration of cess to or overcrowding of public services contribute wage and employment effects.See Card (1990)or Borjas (1999). to anti-immigrant attitudes among poorer native 2An online Appendix with formal derivations of these relationships (as well as the relationships posited by the fiscal burden model)is citizens. available on the authors'Web site.Notice that the predictions from 62
Attitudes toward Immigration February 2010 toward highly skilled immigrants and attitudes toward low-skilled immigrants, even though this distinction is a critical feature of the theoretical story about how economic concerns affect attitude formation and policy preferences with respect to immigration. To test claims about how economic concerns shape attitudes toward immigration, we conducted a unique survey experiment that, for the first time, explicitly and separately examines individuals’ attitudes toward highly skilled and low-skilled immigrants. In a nationwide U.S. survey, we randomly assigned respondents to answer questions about immigrants with different skill levels, thereby obtaining an unbiased comparison between the distributions of attitudes toward highly skilled and low-skilled immigrants. This comparison, and how it varies with respondent characteristics, allows us to directly test the predictions of the theoretical models about how economic concerns affect attitudes toward immigration. The experiment yields results that present a major challenge for existing political-economic models and the conclusions reached in many well-cited studies of attitudes toward immigration. The prominent labor market competition model predicts that natives will be most opposed to immigrants who have skill levels similar to their own. This is rejected by the data. We find that both highly skilled and low-skilled respondents strongly prefer highly skilled immigrants over low-skilled immigrants, and this preference is not decreasing in respondents’ skill levels. Support for both highly skilled and low-skilled immigration is strongly increasing in respondents’ skill levels. In addition, these relationships are similar for the subsamples of respondents that are currently in or currently out of the labor force. The results suggest that, among natives generally, labor market competition is not a significant motivator of anti-immigrant sentiment. The fiscal burden model anticipates that rich (highincome) natives oppose low-skilled immigration and favor highly skilled immigration more than do poor (low-income) natives, and that this difference should be more pronounced in states with greater fiscal exposure in terms of immigrant access to public services. We find instead that rich and poor natives both equally prefer highly skilled over low-skilled immigration most of the time. In addition, the premium attached to highly skilled versus low-skilled immigration is decreasing with the income levels of natives in states with high fiscal exposure, where the welfare effects are expected to be strongest. Rich natives are actually less opposed to low-skilled immigration in states with high fiscal exposure than they are elsewhere. These results are inconsistent with claims that rich natives are opposed to low-skilled immigrants because they anticipate a heavier tax burden associated with the provision of public services. Moreover, we do find evidence that poor natives are more opposed to low-skilled immigration in states with greater fiscal exposure than they are elsewhere, suggesting that concerns about access to or overcrowding of public services contribute to anti-immigrant attitudes among poorer native citizens. Overall, the results indicate that existing politicaleconomic models do not provide reliable guides to individual attitudes toward immigration. Material selfinterest, at least as currently theorized, does not appear to be a powerful determinant of anti-immigrant sentiment. The results are more consistent with alternative arguments about attitude formation that emphasize noneconomic concerns among voters, associated with ethnocentrism or sociotropic considerations about how the local economy as a whole may be affected by immigration. ECONOMIC CONCERNS AND ATTITUDES TOWARD IMMIGRATION Although immigration may impact the native economy in many ways, recent research has emphasized two critical economic concerns that could generate antiimmigrant sentiment among native citizens: concerns about labor market competition and fears about the fiscal burden on public services. General equilibrium models of the native economy generate a variety of predictions about how natives with particular skill and income characteristics should be affected by inflows of immigrants. Labor Market Competition Analysis of the income effects of immigration typically begins with a closed-economy “factor-proportions” (FP) analysis (Borjas 1999; Borjas, Freeman, and Katz 1996, 1997). The FP model derives the distributional effects in the native economy from the impact that immigration has on the relative supplies of factors of production. If immigrants have low skill endowments compared with natives, immigration will raise the supply of low-skilled labor relative to other factors (including highly skilled labor). These changes in relative factor supplies translate into changes in real factor returns: wages of native low-skilled workers will fall as new (low-skilled) immigrants price themselves into employment; and, as more low-skilled labor is applied to fixed amounts of the other factors, the real wages of highly skilled workers will rise. The reverse effects are expected in the case of inflows of highly skilled immigrants, which will drive up the real wages of low-skilled natives while reducing real returns for highly skilled natives. Depending on what one assumes about wage flexibility, the impact of competition with similarly skilled immigrants may also be manifested in higher rates of unemployment among natives.1 The FP model generates a clear prediction about attitudes toward immigration: natives should oppose immigrants with similar skill levels but favor immigrants with different skill levels.2 1 Alternative models also allow for geographic concentration of wage and employment effects. See Card (1990) or Borjas (1999). 2 An online Appendix with formal derivations of these relationships (as well as the relationships posited by the fiscal burden model) is available on the authors’ Web site. Notice that the predictions from 62
American Political Science Review Vol.104,No.1 Empirical studies have found mixed results when and Nelson 2000:Scheve and Slaughter 2001,135-37). testing this model(Burns and Gimpel 2000:Citrin et al. In an open-economy Heckscher-Ohlin model,trade 1997:Dustmann and Preston 2006;Fetzer 2000;Gang, can offset the impact of immigration as the output Rivera-Batiz,and Yun 2002;Harwood 1986),although mix of tradable goods changes in line with changes two prominent articles have recently reported strong in factor supplies.Assuming that the local economy supporting evidence.Drawing upon data from the Na- is not large relative to the rest of the world and/or tional Election Studies (NES)surveys in the United that inflows of immigrants are small relative to the lo- States in the 1990s,Scheve and Slaughter(2001)find a cal labor supply,local wages will not be affected-the strong positive correlation between respondents'skill "factor price insensitivity"result (Leamer and Levin- levels,as measured by years of education,and stated sohn 1995).In an amended open-economy model in support for immigration.This correlation is interpreted which skills of workers are highly specific to partic- as evidence that low-skilled (less educated)natives fear ular industries (Grossman and Helpman 1994:Jones being forced to compete for jobs with low-skilled immi- 1971),the predictions match those from the FP analysis grants.In a similar study Mayda(2006)examined cross- only as long as all goods are traded(then natives will national survey data from the 1995 National Identity be disadvantaged by immigrants of similar skills lev- Module of the International Social Survey Programme els,regardless of industry specificity among the highly (ISSP).as well as data collected between 1995 and 1997 skilled).But the real income effects are sensitive to the by the World Values Survey (WVS)and finds that inclusion of nontraded goods.Immigration can lead the probability of voicing pro-immigration opinions to a reduction in the price of nontraded goods (by is positively associated with the skill levels of survey raising the output of such goods more rapidly than it respondents (measured by years of education).Again. raises aggregate demand for them),and so it becomes this correlation is presented as confirmation that con unclear whether native workers with skills similar to cerns about labor market competition are a powerful those of immigrants will be worse off in real terms(this motivator of attitudes toward immigrants. will depend in part on their consumption tastes).4 In There are four main reasons to be wary of these alternative types of open-economy models that allow reported findings.First,it is unclear whether respon- for economies of scale in production in the industries dents can plausibly observe and correctly attribute the employing immigrants,inflows of new workers can be income effects of immigration that are anticipated in shown to generate higher real wages for native workers the FP model.A growing set of empirical studies has with similar skills(Brezis and Krugman 1993).There examined the effect of immigration on native wages is,in short,a great deal of theoretical ambiguity about and unemployment,but the evidence remains hotly the labor market effects of immigration and the related debated.3 Some studies claim large,adverse wage and concerns we should expect to observe among native employment effects of immigration on less educated citizens. workers (Borjas 1999.2003,2005:Borjas,Freeman. Third,a variety of alternative explanations can ac- and Katz 1996,1997),whereas others conclude that count for the positive correlation between education the immigration effects are at most very small,and and pro-immigration attitudes.Several studies have possibly insignificant (Card 1990,2001.2007:Lewis shown that more educated respondents tend to exhibit 2005).In a recent study Ottaviano and Peri (2008) higher levels of ethnic and racial tolerance,stronger find a net positive long-term effect of immigration preferences for cultural diversity,and more economic on average wages of natives.The inconclusiveness of knowledge,all of which can lead them to favor im- the empirical research on the labor market effects of migration more than their less educated counterparts immigration suggests the need for caution in using the (Chandler and Tsai 2001;Citrin et al.1997;Dustmann simple FP model to make predictions about attitude and Preston 2007;Fetzer 2000;Gang,Rivera-Batiz,and formation and interpreting the evidence on attitudes. Yun 2002;Hainmueller and Hiscox 2007).Existing tests Second,in line with the mixed empirical evidence are not equipped to discriminate between these claims on the impact of immigration,many scholars have and the argument that the association between edu- pointed out that when we move away from the FP cation and views about immigrants is due to concerns analysis and consider more sophisticated economic about labor market competition. models.it becomes very difficult to make clear pre- Fourth and finally,all the above-mentioned tests that dictions about the equilibrium effects of immigration have examined attitudes toward immigration and tried on wages and employment opportunities among na- to link them to concerns about labor market com- tive workers (see Friedberg and Hunt 1995;Gaston petition have relied upon responses to survey ques- tions that ask individuals about their attitudes toward immigration in general and do not differentiate be- the FP model,although widely taken as central in the literature,are far from general (see discussion below). tween highly skilled and low-skilled immigrants.6 This 3 For general reviews about the impact of immigration on wages and employment see for example Bhagwati (2002),Borjas (1999). 4 See Hainmueller and Hiscox(2007).Specificity aside.a similar Card(2005).Friedberg and Hunt(1995),and Longhi.Nijkamp,and resultis obtained in models in which factorsoutnumber traded goods Poot(2005).In a recent study,Borjas(2003,1335)summarizes the 5 The same problem applies to a large body of studies that examine evidence,observing that "the measured impact of immigration on attitudes toward international trade and globalization more gener- the wage of native workers fluctuates widely from study to study ally (see Hainmueller and Hiscox 2006) (and sometimes even within the same study)but seems to cluster 6 Scheve and Slaughter(2001)used responses to the NES immi- around zero.” gration question "Do you think the number of immigrants from 63
American Political Science Review Vol. 104, No. 1 Empirical studies have found mixed results when testing this model (Burns and Gimpel 2000; Citrin et al. 1997; Dustmann and Preston 2006; Fetzer 2000; Gang, Rivera-Batiz, and Yun 2002; Harwood 1986), although two prominent articles have recently reported strong supporting evidence. Drawing upon data from the National Election Studies (NES) surveys in the United States in the 1990s, Scheve and Slaughter (2001) find a strong positive correlation between respondents’ skill levels, as measured by years of education, and stated support for immigration. This correlation is interpreted as evidence that low-skilled (less educated) natives fear being forced to compete for jobs with low-skilled immigrants. In a similar study Mayda (2006) examined crossnational survey data from the 1995 National Identity Module of the International Social Survey Programme (ISSP), as well as data collected between 1995 and 1997 by the World Values Survey (WVS) and finds that the probability of voicing pro-immigration opinions is positively associated with the skill levels of survey respondents (measured by years of education). Again, this correlation is presented as confirmation that concerns about labor market competition are a powerful motivator of attitudes toward immigrants. There are four main reasons to be wary of these reported findings. First, it is unclear whether respondents can plausibly observe and correctly attribute the income effects of immigration that are anticipated in the FP model. A growing set of empirical studies has examined the effect of immigration on native wages and unemployment, but the evidence remains hotly debated.3 Some studies claim large, adverse wage and employment effects of immigration on less educated workers (Borjas 1999, 2003, 2005; Borjas, Freeman, and Katz 1996, 1997), whereas others conclude that the immigration effects are at most very small, and possibly insignificant (Card 1990, 2001, 2007; Lewis 2005). In a recent study Ottaviano and Peri (2008) find a net positive long-term effect of immigration on average wages of natives. The inconclusiveness of the empirical research on the labor market effects of immigration suggests the need for caution in using the simple FP model to make predictions about attitude formation and interpreting the evidence on attitudes. Second, in line with the mixed empirical evidence on the impact of immigration, many scholars have pointed out that when we move away from the FP analysis and consider more sophisticated economic models, it becomes very difficult to make clear predictions about the equilibrium effects of immigration on wages and employment opportunities among native workers (see Friedberg and Hunt 1995; Gaston the FP model, although widely taken as central in the literature, are far from general (see discussion below). 3 For general reviews about the impact of immigration on wages and employment see for example Bhagwati (2002), Borjas (1999), Card (2005), Friedberg and Hunt (1995), and Longhi, Nijkamp, and Poot (2005). In a recent study, Borjas (2003, 1335) summarizes the evidence, observing that “the measured impact of immigration on the wage of native workers fluctuates widely from study to study (and sometimes even within the same study) but seems to cluster around zero.” and Nelson 2000; Scheve and Slaughter 2001, 135–37). In an open-economy Heckscher–Ohlin model, trade can offset the impact of immigration as the output mix of tradable goods changes in line with changes in factor supplies. Assuming that the local economy is not large relative to the rest of the world and/or that inflows of immigrants are small relative to the local labor supply, local wages will not be affected—–the “factor price insensitivity” result (Leamer and Levinsohn 1995). In an amended open-economy model in which skills of workers are highly specific to particular industries (Grossman and Helpman 1994; Jones 1971), the predictions match those from the FP analysis only as long as all goods are traded (then natives will be disadvantaged by immigrants of similar skills levels, regardless of industry specificity among the highly skilled). But the real income effects are sensitive to the inclusion of nontraded goods. Immigration can lead to a reduction in the price of nontraded goods (by raising the output of such goods more rapidly than it raises aggregate demand for them), and so it becomes unclear whether native workers with skills similar to those of immigrants will be worse off in real terms (this will depend in part on their consumption tastes).4 In alternative types of open-economy models that allow for economies of scale in production in the industries employing immigrants, inflows of new workers can be shown to generate higher real wages for native workers with similar skills (Brezis and Krugman 1993). There is, in short, a great deal of theoretical ambiguity about the labor market effects of immigration and the related concerns we should expect to observe among native citizens. Third, a variety of alternative explanations can account for the positive correlation between education and pro-immigration attitudes. Several studies have shown that more educated respondents tend to exhibit higher levels of ethnic and racial tolerance, stronger preferences for cultural diversity, and more economic knowledge, all of which can lead them to favor immigration more than their less educated counterparts (Chandler and Tsai 2001; Citrin et al. 1997; Dustmann and Preston 2007; Fetzer 2000; Gang, Rivera-Batiz, and Yun 2002; Hainmueller and Hiscox 2007). Existing tests are not equipped to discriminate between these claims and the argument that the association between education and views about immigrants is due to concerns about labor market competition.5 Fourth and finally, all the above-mentioned tests that have examined attitudes toward immigration and tried to link them to concerns about labor market competition have relied upon responses to survey questions that ask individuals about their attitudes toward immigration in general and do not differentiate between highly skilled and low-skilled immigrants.6 This 4 See Hainmueller and Hiscox (2007). Specificity aside, a similar result is obtained in models in which factors outnumber traded goods. 5 The same problem applies to a large body of studies that examine attitudes toward international trade and globalization more generally (see Hainmueller and Hiscox 2006). 6 Scheve and Slaughter (2001) used responses to the NES immigration question “Do you think the number of immigrants from 63
Attitudes toward Immigration February 2010 is highly problematic because the key prediction of The Fiscal Burden of Public Services the simple FP model is that natives should oppose immigrants with skill levels similar to their own but The second critical economic concern associated with support immigrants with different skill levels.Previous immigration involves the immigrants'use of public ser- tests rely on the assumption that respondents have low- vices (including public education and health services skilled immigrants in mind when answering questions and various types of welfare assistance,as well as basic about immigration in general.This assumption is ques- services such as police and fire protection,roads,parks, tionable,given that respondents are likely to have sys- and amenities)and their contribution to tax revenues tematically varying information about and perceptions The standard approach to the analysis is to incorporate of the skill attributes of immigrants.More educated a simple model of public finance into the FP analysis of respondents may be better informed about current im- immigration(Facchini and Mayda 2009;Hanson 2005; migration flows,for instance,and are likely to recog- Hanson,Scheve,and Slaughter 2007).This approach al- nize the considerable share of inflows accounted for by lows immigration not only to affect the pretax incomes skilled foreigners entering many Western nations(of- of native individuals,but also to separately affect after- ten because immigration policies are aimed explicitly tax incomes via taxes and transfers.The predictions at selecting immigrants based on their skill levels).It depend on two key assumptions about(1)the net con- is well known that such varying perceptions can lead tributions of low-skilled and highly skilled immigrants to biased estimates in survey research (Bertrand and to the tax coffers and(2)the institutional mechanism Mullainathan 2001;King et al.2004).And of course, in place to adjust taxes and transfers in response to employing this questionable assumption still does not fiscal imbalances.It is assumed that low-skilled im- allow one to examine whether the skill levels of na- migrants impose a substantial net burden on public tives affect their attitudes toward highly skilled immi- finance,whereas highly skilled immigrants are net con- grants in the expected way.A complete and direct test tributors in terms of taxes.There are two plausible would ask respondents about their attitudes toward institutional mechanisms that have been considered. low-skilled immigrants and highly skilled immigrants assuming the government must balance its budget:a specifically and separately. change in tax rates and a change in per capita transfers The only previous study that comes close to such (see Facchini and Mayda 2009).?In the most commonly a test actually reports results at odds with the recent studied scenario,assuming the government adjusts tax claims that labor market concerns are powerful shapers rates while keeping per capita transfers constant,the of attitudes.Hainmueller and Hiscox (2007)investi- prediction is that rich (high-income)natives should gate survey data for 22 European countries from the prefer highly skilled over low-skilled immigrants more European Social Survey,in which respondents were than do poor (low-income)natives,because the skill asked about their attitudes toward immigration from levels of immigrants determine their fiscal impact,and “richer'”and“poorer”countries,,a difference plausi- progressivity in taxation implies that the rich benefit bly associated with the expected average skill levels of (lose)more from any associated reduction (increase) immigrants.They find that in all 22 countries people in taxes.In the alternative scenario,assuming the gov- with higher education levels (and/or higher levels of ernment adjusts per capita transfers but holds tax rates occupational skills)are more likely to favor immigra- constant,the prediction is the opposite:poor natives tion regardless of where the immigrants come from and prefer highly skilled over low-skilled immigrants more their likely skill attributes.In addition,the positive link than rich natives,because low-skilled immigrants tend between education and support for(all types of)immi- to crowd out poor natives in terms of access to public gration is almost identical between those in the labor services and erode their welfare benefits.whereas rich force and those not in the labor force.Taken together, natives are unaffected. the existing theory and evidence on whether concerns Two recent empirical studies have examined these about labor market competition are a strong motivator claims.Hanson,Scheve,and Slaughter(2007)use NES of anti-immigrant sentiment remain ambiguous.At the survey data to compare individual attitudes toward im- very least,more complete and direct empirical tests are migration in different U.S.states and find that rich indi- necessary. viduals are less likely to support immigration in states that are highly exposed to fiscal costs as a result of immigration (i.e.,states with generous public services and high rates of immigrant settlement)than in states with lower exposure.This finding is interpreted as con- foreign countries who are permitted to come to the United States to live should be increased a little,increased a lot,decreased a lit- firmation that,as expected in the scenario in which the tle,decreased a lot,or left the same as it is now?"Mayda (2006) government adjusts taxes to meet new spending obli examined answers to the ISSP question "Do you think the number gations,rich natives fear being burdened with higher of immigrants to (respondents country)nowadays should be:(a) taxes as a consequence of low-skilled immigrants draw- reduced a lot,(b)reduced a little,(c)remain the same as it is,(d) ing on public services and draining government coffers increased a little,or (e)increased a lot."The WVS asked the follow- ing question:"How about people from other countries coming here to work.Which one of the following do you think the government Borrowing would be a third option,but as there are constitutional should do (a)Let anyone come who wants to (b)Let people come as constraints on borrowing by state governments in the United States long as there are jobs available (c)Place strict limits on the number and the underlying model is static,standard analyses do not con- of foreigners who can come here (d)Prohibit people coming here sider this possibility(Facchini and Mayda 2009;Hanson,Scheve,and from other countries?(e)Don't know." Slaughter 2007). 64
Attitudes toward Immigration February 2010 is highly problematic because the key prediction of the simple FP model is that natives should oppose immigrants with skill levels similar to their own but support immigrants with different skill levels. Previous tests rely on the assumption that respondents have lowskilled immigrants in mind when answering questions about immigration in general. This assumption is questionable, given that respondents are likely to have systematically varying information about and perceptions of the skill attributes of immigrants. More educated respondents may be better informed about current immigration flows, for instance, and are likely to recognize the considerable share of inflows accounted for by skilled foreigners entering many Western nations (often because immigration policies are aimed explicitly at selecting immigrants based on their skill levels). It is well known that such varying perceptions can lead to biased estimates in survey research (Bertrand and Mullainathan 2001; King et al. 2004). And of course, employing this questionable assumption still does not allow one to examine whether the skill levels of natives affect their attitudes toward highly skilled immigrants in the expected way. A complete and direct test would ask respondents about their attitudes toward low-skilled immigrants and highly skilled immigrants specifically and separately. The only previous study that comes close to such a test actually reports results at odds with the recent claims that labor market concerns are powerful shapers of attitudes. Hainmueller and Hiscox (2007) investigate survey data for 22 European countries from the European Social Survey, in which respondents were asked about their attitudes toward immigration from “richer” and “poorer” countries, a difference plausibly associated with the expected average skill levels of immigrants. They find that in all 22 countries people with higher education levels (and/or higher levels of occupational skills) are more likely to favor immigration regardless of where the immigrants come from and their likely skill attributes. In addition, the positive link between education and support for (all types of) immigration is almost identical between those in the labor force and those not in the labor force. Taken together, the existing theory and evidence on whether concerns about labor market competition are a strong motivator of anti-immigrant sentiment remain ambiguous. At the very least, more complete and direct empirical tests are necessary. foreign countries who are permitted to come to the United States to live should be increased a little, increased a lot, decreased a little, decreased a lot, or left the same as it is now?” Mayda (2006) examined answers to the ISSP question “Do you think the number of immigrants to (respondents country) nowadays should be: (a) reduced a lot, (b) reduced a little, (c) remain the same as it is, (d) increased a little, or (e) increased a lot.” The WVS asked the following question: “How about people from other countries coming here to work. Which one of the following do you think the government should do (a) Let anyone come who wants to (b) Let people come as long as there are jobs available (c) Place strict limits on the number of foreigners who can come here (d) Prohibit people coming here from other countries? (e) Don’t know.” The Fiscal Burden of Public Services The second critical economic concern associated with immigration involves the immigrants’ use of public services (including public education and health services and various types of welfare assistance, as well as basic services such as police and fire protection, roads, parks, and amenities) and their contribution to tax revenues. The standard approach to the analysis is to incorporate a simple model of public finance into the FP analysis of immigration (Facchini and Mayda 2009; Hanson 2005; Hanson, Scheve, and Slaughter 2007). This approach allows immigration not only to affect the pretax incomes of native individuals, but also to separately affect aftertax incomes via taxes and transfers. The predictions depend on two key assumptions about (1) the net contributions of low-skilled and highly skilled immigrants to the tax coffers and (2) the institutional mechanism in place to adjust taxes and transfers in response to fiscal imbalances. It is assumed that low-skilled immigrants impose a substantial net burden on public finance, whereas highly skilled immigrants are net contributors in terms of taxes. There are two plausible institutional mechanisms that have been considered, assuming the government must balance its budget: a change in tax rates and a change in per capita transfers (see Facchini and Mayda 2009).7 In the most commonly studied scenario, assuming the government adjusts tax rates while keeping per capita transfers constant, the prediction is that rich (high-income) natives should prefer highly skilled over low-skilled immigrants more than do poor (low-income) natives, because the skill levels of immigrants determine their fiscal impact, and progressivity in taxation implies that the rich benefit (lose) more from any associated reduction (increase) in taxes. In the alternative scenario, assuming the government adjusts per capita transfers but holds tax rates constant, the prediction is the opposite: poor natives prefer highly skilled over low-skilled immigrants more than rich natives, because low-skilled immigrants tend to crowd out poor natives in terms of access to public services and erode their welfare benefits, whereas rich natives are unaffected. Two recent empirical studies have examined these claims. Hanson, Scheve, and Slaughter (2007) use NES survey data to compare individual attitudes toward immigration in different U.S. states and find that rich individuals are less likely to support immigration in states that are highly exposed to fiscal costs as a result of immigration (i.e., states with generous public services and high rates of immigrant settlement) than in states with lower exposure. This finding is interpreted as con- firmation that, as expected in the scenario in which the government adjusts taxes to meet new spending obligations, rich natives fear being burdened with higher taxes as a consequence of low-skilled immigrants drawing on public services and draining government coffers. 7 Borrowing would be a third option, but as there are constitutional constraints on borrowing by state governments in the United States, and the underlying model is static, standard analyses do not consider this possibility (Facchini and Mayda 2009; Hanson, Scheve, and Slaughter 2007). 64
American Political Science Review Vol.104,No.1 Facchini and Mayda(2009)examine the cross-national time period.It seems unlikely,then,that U.S.survey survey data from the ISSP and find that respondent respondents could be drawing on personal experience income is negatively correlated with support for immi- to attribute tax hikes to immigration. gration in countries where low-skilled immigrants are On the other hand,a recent study that looks at a larger share of total immigration inflows.This finding the link between immigration and U.S.state welfare is also regarded as evidence that fears about higher expenditures has found stronger support for the taxes among rich natives,linked to use of public ser- so-called "erosion hypothesis."Hero and Preuhs vices by low-skilled immigrants,lead to anti-immigrant (2007)examine data on welfare spending for all sentiments. U.S.states in 1998 and find that states with larger Again,there are reasons to treat these findings with noncitizen populations tend to provide smaller cash considerable caution.While there is some evidence benefits in their welfare programs,and this effect is that immigrants rely more on welfare programs than larger the more accessible the welfare programs are do native citizens (Borjas 1999;Fix and Passel 2002; to immigrants.In the right panel of Figure 1 we plot Hanson 2005;Zimmerman and Tumlin 1999),as im- changes in state public welfare expenditures per capita migrant households tend to be larger and poorer than against changes in the immigrant population.There is native households,there is more disagreement over a negative correlation between the two.Although all the extent to which immigrant inflows increase net tax states have expanded per capita welfare expenditures burdens on natives(Fix.Passel,and Enchautegui 1994: over time.the increases have been smaller in states that Smith and Edmonston 1997).A U.S.study conducted experienced larger increases in the share of immigrants by the National Research Council (NRC)reported in their population.0 This pattern,taken together with that the average immigrant to the United States could the evidence on state taxes discussed above,suggests be expected to impose a tax burden on natives in that fears about the erosion of welfare benefits as a the short term,but would be a net contributor to tax result of immigration may actually be more relevant coffers in the long term,to the tune of $80,000(see and plausible than worries about tax hikes. Smith and Edmonston 1997).Estimating the long- Finally,it should be noted that the survey-based term fiscal consequences of immigration in a dynamic tests summarized above are indirect and incomplete. model of public finance is very difficult,of course, Like the studies that examine concerns about labor and requires taking into account fiscal contributions market competition,existing tests of the fiscal burden made by successive generations of immigrant and model rely upon data on responses to NES and ISSP native families.For countries with aging work forces. survey questions that ask individuals about their in particular,the long-term public finance gains from attitudes toward immigration in general,not about importing young workers likely outweigh the costs their attitudes toward highly skilled or low-skilled (Krugman and Obstfeld 2000).Perhaps short-term immigrants specifically.They rest on the problematic fiscal effects dominate longer-term effects in shaping assumption that all respondents actually have low- attitudes among native citizens,but the evidence is skilled immigrants in mind when answering these complicated enough to suggest caution in claiming survey questions about immigration.And employing that fears about the tax effects of immigration are a this assumption still only allows a partial test of the strong motivation for anti-immigrant sentiments theory:it does not allow one to test whether the Quite separately,the finding that tax considerations incomes of natives affects their attitudes toward highly among natives play a strong role,and actually trump skilled immigrants in the expected way. concerns about cuts in per capita welfare benefits, In sum,the existing research examining whether seems especially surprising in the United States.Ev- attitudes toward immigrants are strongly shaped by idence on recent fiscal experiences of U.S.states seems concerns about labor market competition and fears inconsistent with this claim.Although states gained about the fiscal burden on public services does not broad discretion over welfare policies following the provide convincing conclusions.Most importantly,as welfare reform of 1996,they have not systematically a result of data constraints,these studies have not been raised taxes in recent years even though immigration able to provide direct tests of the relevant theoretical has increased.In fact,as shown in the left panel of Fig- ure 1,looking across the states,there exists,if anything, a negative correlation between changes in state income tax rates and levels of immigration.States that expe- For both tax rates and the percent foreign-born population.changes are computed as the level in 2004 minus the level in 1990.Tax rienced greater increases in their foreign-born popu- rates are average marginal state tax rates on wages,taken from the lations between 1990 and 2004 had smaller increases NBER state tax database(Feenberg and Coutts 1993)available at (or larger cuts)in the average marginal tax rates than http://www.nber.org/taxsim/state-marginal/.Income taxes are dollar- states with smaller immigrant inflows over the same weighted average marginal income tax rates as calculated by the NBER TAXSIM model from micro data for a sample of U.S.tax- payers.The results are very similar if tax rates on other sources of income are used (i.e..taxes on interest received,dividends,pensions. 8 The study reports findings in 1996 dollars The NRC study did re- or property tax,etc.).Data on the percent foreign-born are taken port that tax effects vary depending on the skill levels of immigrants: from the U.S.Census 1990 and the American Community Survey immigrants with an education beyond high school contribute an av. 2004. erage of $105,000 to U.S.tax coffers over their lifetime,whereas the 10 Public welfare expenditures are taken from the U.S.Census of least educated immigrants create a net deficit of $89,000 per person Governments (see the following section for more details on the (Smith and Edmonston 1997). welfare spending measures). 65
American Political Science Review Vol. 104, No. 1 Facchini and Mayda (2009) examine the cross-national survey data from the ISSP and find that respondent income is negatively correlated with support for immigration in countries where low-skilled immigrants are a larger share of total immigration inflows. This finding is also regarded as evidence that fears about higher taxes among rich natives, linked to use of public services by low-skilled immigrants, lead to anti-immigrant sentiments. Again, there are reasons to treat these findings with considerable caution. While there is some evidence that immigrants rely more on welfare programs than do native citizens (Borjas 1999; Fix and Passel 2002; Hanson 2005; Zimmerman and Tumlin 1999), as immigrant households tend to be larger and poorer than native households, there is more disagreement over the extent to which immigrant inflows increase net tax burdens on natives (Fix, Passel, and Enchautegui 1994; Smith and Edmonston 1997). A U.S. study conducted by the National Research Council (NRC) reported that the average immigrant to the United States could be expected to impose a tax burden on natives in the short term, but would be a net contributor to tax coffers in the long term, to the tune of $80,000 (see Smith and Edmonston 1997).8 Estimating the longterm fiscal consequences of immigration in a dynamic model of public finance is very difficult, of course, and requires taking into account fiscal contributions made by successive generations of immigrant and native families. For countries with aging work forces, in particular, the long-term public finance gains from importing young workers likely outweigh the costs (Krugman and Obstfeld 2000). Perhaps short-term fiscal effects dominate longer-term effects in shaping attitudes among native citizens, but the evidence is complicated enough to suggest caution in claiming that fears about the tax effects of immigration are a strong motivation for anti-immigrant sentiments. Quite separately, the finding that tax considerations among natives play a strong role, and actually trump concerns about cuts in per capita welfare benefits, seems especially surprising in the United States. Evidence on recent fiscal experiences of U.S. states seems inconsistent with this claim. Although states gained broad discretion over welfare policies following the welfare reform of 1996, they have not systematically raised taxes in recent years even though immigration has increased. In fact, as shown in the left panel of Figure 1, looking across the states, there exists, if anything, a negative correlation between changes in state income tax rates and levels of immigration. States that experienced greater increases in their foreign-born populations between 1990 and 2004 had smaller increases (or larger cuts) in the average marginal tax rates than states with smaller immigrant inflows over the same 8 The study reports findings in 1996 dollars. The NRC study did report that tax effects vary depending on the skill levels of immigrants: immigrants with an education beyond high school contribute an average of $105,000 to U.S. tax coffers over their lifetime, whereas the least educated immigrants create a net deficit of $89,000 per person (Smith and Edmonston 1997). time period.9 It seems unlikely, then, that U.S. survey respondents could be drawing on personal experience to attribute tax hikes to immigration. On the other hand, a recent study that looks at the link between immigration and U.S. state welfare expenditures has found stronger support for the so-called “erosion hypothesis.” Hero and Preuhs (2007) examine data on welfare spending for all U.S. states in 1998 and find that states with larger noncitizen populations tend to provide smaller cash benefits in their welfare programs, and this effect is larger the more accessible the welfare programs are to immigrants. In the right panel of Figure 1 we plot changes in state public welfare expenditures per capita against changes in the immigrant population. There is a negative correlation between the two. Although all states have expanded per capita welfare expenditures over time, the increases have been smaller in states that experienced larger increases in the share of immigrants in their population.10 This pattern, taken together with the evidence on state taxes discussed above, suggests that fears about the erosion of welfare benefits as a result of immigration may actually be more relevant and plausible than worries about tax hikes. Finally, it should be noted that the survey-based tests summarized above are indirect and incomplete. Like the studies that examine concerns about labor market competition, existing tests of the fiscal burden model rely upon data on responses to NES and ISSP survey questions that ask individuals about their attitudes toward immigration in general, not about their attitudes toward highly skilled or low-skilled immigrants specifically. They rest on the problematic assumption that all respondents actually have lowskilled immigrants in mind when answering these survey questions about immigration. And employing this assumption still only allows a partial test of the theory: it does not allow one to test whether the incomes of natives affects their attitudes toward highly skilled immigrants in the expected way. In sum, the existing research examining whether attitudes toward immigrants are strongly shaped by concerns about labor market competition and fears about the fiscal burden on public services does not provide convincing conclusions. Most importantly, as a result of data constraints, these studies have not been able to provide direct tests of the relevant theoretical 9 For both tax rates and the percent foreign-born population, changes are computed as the level in 2004 minus the level in 1990. Tax rates are average marginal state tax rates on wages, taken from the NBER state tax database (Feenberg and Coutts 1993) available at http://www.nber.org/ taxsim/state-marginal/. Income taxes are dollarweighted average marginal income tax rates as calculated by the NBER TAXSIM model from micro data for a sample of U.S. taxpayers. The results are very similar if tax rates on other sources of income are used (i.e., taxes on interest received, dividends, pensions, or property tax, etc.). Data on the percent foreign-born are taken from the U.S. Census 1990 and the American Community Survey 2004. 10 Public welfare expenditures are taken from the U.S. Census of Governments (see the following section for more details on the welfare spending measures). 65