Immigration and the US Economy

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Case Details:

Case Code : ECON029
Case Length : 25 Pages
Period : 1900-2007
Pub. Date : 2008
Teaching Note :Not Available
Organization : --
Industry : -
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Economists have always been interested in understanding the role of immigrants (foreign-born persons) and the part they play in the economy of the host country. For them, the US with its history of immigration, offered the ideal opportunity to study the economic implications of a continuous flow of immigrants.

Large-scale immigration into North America started in the 16th century, with people coming in from Europe. Hordes of immigrants populated the towns, cities, and villages of the country and took up jobs as laborers, farmers, physicians, etc. Until 1882, the US authorities did not restrict the entry of immigrants.

However, with the rapid increase in population, the US government decided to regulate immigration and a new immigration policy was implemented. Over the years, the US government introduced different acts in its efforts to control immigration. Nonetheless, as of 2000, immigrants constituted 11% of the total population of the US.

The terrorist attacks of September 11, 2001 (9/11) polarized public opinion on immigration. Debates on the topic on the floors of legislative bodies as well as in the print media grew more heated. In response to the attacks, the US government tightened immigration regulations.

Some analysts supported the new regulations and even demanded further restrictions on immigration on the grounds that high levels of immigration caused population increase, stagnation or reduction in the wages of blue-collar workers, and job losses for US citizens, besides having far-reaching social and cultural consequences.

However, a majority of analysts were not in favor of further restricting immigration. They argued that immigrants had made a positive contribution to the US economy. With the decline in fertility rates among US-born citizens, immigration would play a key role in future population and economic growth of the US, they added. The US government drafted the Comprehensive Immigration Reform Act to address the problems associated with immigration. However, the bill, introduced in the US Senate on May 9, 2007, failed to muster sufficient votes.

Background Note

According to one section of anthropologists, the first humans entered the Americas through the Bering Strait⁵ around 11,000 years ago from Eurasia⁶. These people were believed to be the ancestors of the present-day Native Americans. However, it was Christopher Columbus' voyage to the continent of America in 1492 that triggered what later became a large-scale migration of the people of Europe into the "New World"...

Excerpts >>

5] The Bering Strait, named after Vitus Bering, a Russian explorer, is a sea strait between Russia and Alaska. Some scientists believe that in the last Ice Age, the strait had frozen over, allowing the passage of animals and humans into the American continent.

6] www.ngc.org