September 30, 1999

Letters to the Editor

Wall Street Journal

How Immigrants' Skills, Wages Affect Natives

In his review of my book, "Heaven's Door," Jagdish Bhagwati makes a number of erroneous statements about basic facts that call out for correction.

1. Mr. Bhagwati claims that in earlier writings I had "virtually asserted that the absolute skill levels of legal immigrants had declined since the 1965 act." In fact, I have never made such a claim. My work has always focused on the skills of immigrants relative to those of natives.

2. Mr. Bhagwati claims that recent work on INS data shows that the absolute skill levels of immigrants have exceeded those of natives for much of the 1972-95 period. Let's put aside that the INS data is ill-suited for documenting trends in immigrant skills: these data do not report the immigrants' actual earnings or educational attainment; instead, one must guess about economic potential by using information on the type of job the immigrant did before arriving in the U.S. If one looks at Figure 1a of the Jasso-Rosenzweig-Smith research paper, the facts are clear and quite different. The average occupational earnings of new immigrants are below those of native workers in 12 of the 14 years between 1978 and 1991; are above native earnings in 1992, 1993; and then fall again below native earnings in 1994 and 1995.

3. Mr. Bhagwati claims economists Gordon Hanson and Matthew Slaughter have recently shown that wages are not driven down by immigration. Their work actually demonstrates that immigration does not seem to create wage differentials between states that receive many immigrants and states that do not, a point addressed at length in my book. Either Mr. Bhagwati did not read the entire Hanson-Slaughter article or he misinterpreted the evidence, for Mr. Hanson and Mr. Slaughter conclude: "The evidence that state-specific endowments shocks do not trigger state-specific wage responses does not imply that the United States overall had no wage response to increased immigration" (the emphasis is theirs).

4. Mr. Bhagwati is misinformed when he claims "Hispanic parents in California overwhelmingly supported Proposition 227." In Heaven's Door" (p. 58), I cite results from a Los Angeles Times exit poll showing only about 40% of Hispanics supported the proposition--as compared with two-thirds of whites and Asians.

There are many issues of interpretation over which my critics and I could disagree. It does not help, however, when a critic bases his argument on factoids that any fact-checker could easily show to be false.

George J. Borjas
Pforzheimer Professor of Public Policy
Kennedy School of Government
Harvard University
Cambridge, Mass.