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June 24, 2014

Book Report on Heaven's door: immigration policy and the American Economy By George J. Borjas

Summary
Each year hundreds of thousands of immigrants reach United States, legally or illegally, in order to achieve better job opportunities, living conditions, health services etc. They have left their homeland in pursue of better future and their American dreams. Heaven's door: Immigration policy and the American Economy by George Borjas describes American Immigration policy and the impact of immigrants on American economy. Borjas discusses that he himself was an immigrant from Cuba and although he considers all the moral arguments against restricting the immigrants but still he thinks that present economical condition of United States could not bear the burden of steady flow of immigrants (Borjas, 2001).
Borjas had divided this book into twelve chapters and each chapter discusses different aspects of American Immigration policy, condition of immigrants and their Impact on American Economy. Following are the important points discussed in this book:
  • Reframing the Immigration Debate: this book discusses that United States accepted “more than one million immigrants per year since late 1990’s”.  This generous immigration policy of United States has increased the number of immigrants from 10 million in 1970 to 26 million in 1998, which has also increased the share of immigrants in United States population from 5 to 10 percent per year
  • The Skills of Immigrants: Borjas discusses in great detail, the skills of immigrants. In the past, immigrants were more skilled in their particular field. In 1960s immigrant earned 4 percent more than the native-born Americans. This percentage has decreased as the skills of immigrants declined. In 1998 an average immigrant earned 23 percent less than an average native-born American. A newest immigrant earned 13 percent less than a native-born American “at the time of entry” in United States in 1960, now they earned 34 percent less
·         National Origin: Borjas describes the national origin of immigrants in this chapter. Hispanics are the largest minority of United States, which makes approximately 9 percent of United States total population. They are living in poverty as many have moved horizontally to take unskilled jobs in the urban unskilled sector, often filing the same economic and occupational niche as African Americans. Recent Hispanic immigrants worked at minimum wage jobs. The group of Asian American is also a growing ethnic group in United States. This group consists of the people of more than 29 countries like China, Japan, Philippines, Korea, Vietnam, Cambodia, Laos, India, Pakistan, Bangladesh, Sri-Lanka etc. there are huge cultural differences among the group members as well, as they all belong to different cultures, having different religions and speaking different languages. They all are educationally, economically and socially more successful than Hispanic immigrants. Thus according to Borjas, there is a direct link between the national origin of the immigrants and their economic performance
  • The Labor Market impact of Immigrants: in this chapter writer states that the steady flow of immigrants from all over he world, especially from third world countries affected American labor market. The availability of cheap labor “hurts” the job opportunities of native-Americans. According to him, immigrants are responsible for “shifting $160 billion from workers to employers”
  • The Economic Benefits from the Immigrants: According to the writer the United States government exaggerates the economic benefits of immigration. The statistics provided in the reveals that the net annual gain from immigration is $8 billion.
  • Immigration and the Welfare State:  Borjas discusses that almost one-fourth of Immigrants household receives financial assistance from the government, which increases the burden of United States economy  
  • A Proposal for an Immigration Policy: Borjas proposes a new framework of United States immigration policy. He suggests that United States must restrict the number of immigrants to 500,000 and give preference to more skilled immigrants to migrate to United States so they would not become the burden for United States economy
Major Points
  • Skills of Immigrants: it is one of the most important points. Borjas based his hypothesis on solid research and provide figures and statistics to support his reasoning. He reveals that the skills of immigrants declines and the newly arrived immigrants are lot less skilled and educated than the immigrants of the decades of 60s and 70s.Borjas describes that in the decade of 60s and afterwards, immigrant’s skills like English proficiency etc. helped to narrow the wage gap between the immigrant and the native-born Americans. Wage gap between the immigrant and native-born American narrowed by almost 10 percent in the first twenty years of immigrant’s arrival to United States. After 1980 Wage gap between native-born Americans and newly arrived immigrants widened to 25 percent. If these immigrants absorbed in the labor market with the same ratio and wage gap also narrows at the same pace, even then they have to face a 15 percent wage gap throughout their working careers.
  • Impact of Immigration on United States Economy: Borjas describes that the continuous flow of immigrants affected the economy of United Sates in many ways. First of all almost 75 percent of the immigrants settled in the six states, i.e. New York, California, Florida, Texas, Illinois and New Jersey. This congestion of immigrants affected the labor market of these states and lowers the wages for the native-born Americans. In other words immigrants helped the rich employers to get richer and to poor workers to become poorer. In the decades of 60s and 70s immigrants did not like to take financial assistance from the government but this trend has changed in the present era. For example, in California, by the year 1990 there were 12 percent people who received welfare money while 10 percent did not. In 1998, there are 45 percent people who receive financial assistance from government while 29 percent did not. In the year 1998, it has been estimated that almost 25 percent of immigrant households are receiving financial assistance from the government. There are two main reasons for the increase in receiving financial assistance from government. First, the past wave of immigrants are more skilled and educated than the present wave, they were easily absorbed in labor market and start earning even more than the average native-born American. Second, the present wave of immigrants considers this welfare assistance as getting “free money”. They know that they do not have the skills to absorb in the labor market, thus they think that financial assistance from government is the best earning opportunity they have.

Following are the most important points discussed in this book:
Borjas has presented his thesis in this book with solid reasoning and comprehensive research and statistics. He, with an objective analysis, unfolds the impact of immigrants on United States economy and concludes that United States present immigration policy is bad for its economy. 
The book is masterly written supported with relevant data and statistics. Borjas is not a die-hard extremist who is against immigrants or United States immigration policy, because he himself is an immigrant from Cuba. But he is not a romanticized person either. He is an economist who loves to live with ground realities.
Readers may argue with some of the points presented in this book but nobody can think that the approach of author is biased or not based on solid reasoning.  Borjas has presented his point of view clearly with comprehensive data to support it. 


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