September 30th, 2006


The Externalities of Border Control

You often hear arguments against immigration of the form: "Immigrants commit crimes and use government services at higher rates than the native population, thereby imposing negative externalities on the rest of the population. Thus, we must strictly control the number of immigrants into the U.S. to limit these negative externalities."

However, what about the negative externalities of border control itself? Immigration laws imposes negative externalities on both natives and would-be immigrants alike. Let's examine the negative effecs on natives alone. Such laws:

* reduce the number of potential customers for your products and services.
* reduce the pool of potential mates. ( Maybe that smart, pretty girl you would've married wasn't lucky enough to win the immigration lottery -- instead, she's stuck in an Chinese village growing rice.)
* reduce the number of potential buyers of your house or land.
* reduce the pool of friends you might have.
* reduce the range of products you can buy. (Products that are economical to produce for a large, diverse population, may not be profitable for smaller, less diverse population. Also, geniuses that would've been productive in the U.S. lead stunted lives in places without the resources necessary for their genius to develop.)
* increase the costs of many goods and services (since native employers are forced to pay higher wages to natives)
* reduce the willingness of other countries to open their borders, thus reducing the pool of available employers, and choice of legal regimes.

It's difficult to measure the costs of these negative externalities. After all, how do I know how many Chinese girls I would've dated in the absence of immigration restrictions? Or if I could afford my own personal assistant? Or if a key breakthrough in anti-aging research would've been made by Venezualan who instead died of cholera?

But any rational border policy should try to take these costs into account. But how? Development economists have started to perform randomized controlled trials to determine which aid programs are effective, if any. Congress just passed a bill to build a 700 mile, $6 billion dollar border wall. (And this being a government project, I expect that it will cost at least three times the current projections to build and maintain.) It seems to me that before we spend a lot of time and money building a continent wide wall, we should first spend some money on some border experiments to verify whether we should have immigration restrictions at all.