Identifying and analyzing arguments against increased legal immigration has been one of the core components of my job over the last decade. Most of those arguments are flimsy. The effect of immigrants on wages is small and to the benefit of complementary native-born American workers. Immigrants are less criminally inclined than native-born Americans. Immigrants and their descendants assimilate quickly into American culture. The threat of terrorist attacks carried about by foreigners on U.S. soil is real but also small and manageable. But one argument stands out to the point where I’ve co-authored academic papers, working papers, and a book with Cambridge University Press addressing whether immigrants could reduce long run economic growth in the United States and “kill the goose that lays golden eggs.”

The Golden Goose argument goes something like this: Immigrants typically come from poorer countries. There are several reasons why these destination countries may be poor, such as unproductive economic and political institutions, a culture that is somehow inconducive to economic growth, endemic corruption, violence, or other factors. If the immigrants to, say, the United States were to bring those anti-growth characteristics with them from their home countries, then they could affect U.S. institutions, culture, corruption, violence, or other features of our rich society such that long-run growth is slowed in the United States, halted entirely, or even reversed. In that case, the predicted economic benefits of liberalized immigration wouldn’t materialize and there could even be a net cost.

The Golden Goose argument isn’t supported by the evidence. The quality of economic and political institutions either improves or remains unchanged after large increases in immigration. The impacts of immigration on culture, corruption, and violence are all small. This is particularly difficult to measure in the case of culture as the state of the academic literature on this point is weak and unpersuasive for a whole host of methodological reasons, so perhaps there is another method that could reverse our conclusions, but I’m doubtful.

One of the chapters in my book is about how immigration has affected economic institutions in the United States over the long run. In the course of conducting this research, I made a figure of unionization rates and immigration over time that shows a striking inverse relationship (Figure 1). In our book, we theorize that immigrants reduce unionization. Unions are and have been an important force for progressive policy changes in the United States. Workers who join a union become more progressive, more skeptical of the benefits of market, and more anti-trade. Part of the effect of joining a union can be explained by self-selection (people who are already anti-market are more likely to join) but most of the shift in opinion can be explained by changes in opinion after becoming a member. Thus, we argue that immigrants result in better and more free economic institutions by undermining labor unions that typically push for the opposite.

There is much research on how immigrants affect unionization, but much of it analyzed narrower questions and not the political or policy impact. After our book was published, I worked with Town Oh and Artem Samiahulin to see how immigrants affect unionization in the United States as a first step in seeing whether immigrants affected unions enough to change national policy in a better direction.

We published a working paper recently on the first step in this endeavor. Our method was to employ the national skill-cell approach that George Borjas and others used to investigate how immigrants affect wages. The national skill-cell method uses regression analysis to estimate how immigrants with a certain level of education and experience in the labor market affect wages of American workers with the same level of education and experience. This is called the national skill-cell method because each level of education and experience produces a cell for natives and for immigrants on the national level. The benefit of this method is that it allows for directly estimating how immigrants compete with native-born Americans who have the same level of education and experience across the entire country. This is important because many workers don’t compete against other workers – tomato pickers don’t compete with astrophysicists, for instance. Thus, other methods may miss how immigrants affect labor markets. Labor economists who study immigration use this method to see how substitutable immigrant workers impact the wages of native-born American workers. Our insight was to apply the national skill-cell method to see how a change in the number of immigrants in each cell affected unionization rates for Americans rather than wages.

We found that immigration reduced union density by 5.7 percentage points between 1980 and 2020, which accounted for 29.7 percent of the overall decline in union density during that period. This effect was concentrated in the private sector and for male workers with a smaller effect for female workers and no effect on public sector unionization. We found this happens because immigrants have a lower preference for unionization and because immigrants increase diversity in the workforce that, in turn, decreases solidarity among workers and raises the transaction costs of forming unions. Friedrich Engels, communist theorizer and co-author with Karl Marx,

[W]rote that immigrants in the United States ‘are divided into different nationalities and understand neither one another nor, for the most part, the language of the country.’[1] Furthermore, the American ‘bourgeoisie knows … how to play off one nationality against the other: Jews, Italians, Bohemians, etc., against Germans and Irish, and each one against the other.’[2] Engels even went to far as to argue that open immigration will delay the socialist revolution for a long time as the American bourgeoisie understood that “‘there will be plenty more, and more than we want, of these damned Dutchmen, Irishmen, Italians, Jews and Hungarians’; and, to cap it all, John Chinaman stands in the background.” [3]

Our working paper on how immigrants affect unionization is the first step in investigating whether immigrants have a positive institutional effect on economic freedom by undermining labor unions. Of course, it’s just a working paper at this point – which is essentially a rough draft we posted to get comments, criticisms, and other feedback from experts. Perhaps my co-authors and I committed errors or oversights that would affect our findings – please let us know if you find some.

Here are other potential problems we need to consider that you, dear reader, could help with:

1. Perhaps unions reduce immigration rather than immigration reducing unions. When unions are strong, they successfully lobby and vote to reduce legal immigration, but when they weaken then opposite interests in favor of immigration liberalization gain ascendancy.
2. The national skill-cell method may be appropriate for estimating the impact of immigrants on wages, but not for estimating the impact of immigration on unionization.
3. Quasi-natural experiments based on the Mariel Boatlift or others may reveal more about how immigrants affect unions than a national skill-cell approach.
4. Perhaps we should have looked at occupations rather than skill-cells.
5. Other problems.