The Nobel Prize in economics is betting on immigration to increase income.

He Nobel Prize in Economics 2021The doctor. David Card, He pointed out that larger cities have higher incomes and salaries, so immigration is not a negative factor in the population to which new residents arrive.

During the masterful conference entitled Research and economic policies: immigration and minimum wage in the Iberoamerican UniversityCard, noted that large countries do not have lower per capita income, larger cities have higher wagesmany countries try to promote population growth and some countries even encourage the immigration, as is the case with Canada, Australia there New Zealand-.

Nobel Prize for his empirical contributions to labor economics, noted that the above contrasted with the 1826 essay by Thomas Malthus, on population and human misery; but he pointed out that the author was thinking only of the medieval world and the agriculture of that time, “most people intuitively think that more people, less wages”.

Since when we talk specifically about the immigration and minimum wage, mentioned that among economists there are generally pro and con positions. A traditional view sees the following benefits of immigration: develop the economy -and more workers, more gross domestic product-, increases the value of land and capital, and increase wages native average.

At the beginning of the 20th century, continues the doctor, economists realized that in an industrial economy the Malthusian trap can be avoided if: capital – machinery, infrastructure – grows with population and when investment follows the rate of population , since output per worker can increase even with more population.

They also realized that if immigrant inflows are not diversified, there could be a negative effect among the most similar natives. So the professor of economics at the University of California asked: how do you get credible evidence on the effect of migration?

Some of this credible evidence revealed that the mass exodus Russian Jews to Israelfrom 1991 to 1993, had a small effect – close to 0 – on native wages, and in the short term there were large increases in investment in Israel.

On the other hand, the minimum wagerelated to immigration, as disadvantages What reduced employment low-wage workers and reduces investment incentives, increases consumer pricery that maybe an advantage, is the increase in income lowest paid workers.

Now the political reactions to immigration have been that the immigration policies of the United States hardened after 2001 and again under the presidency of donald trump, and that refugee policies are now among the strictest in the world. For him, Map David pointed out that motivated immigration due to non-economic factors generates in countries like UNITED STATES and the United Kingdom concerns about its racial makeup.

He is also director of Labor Economics Center Since University of California in Berkeley, said that economic knowledge is still imperfect, that it is impossible to reach a 100% consensus and that the options for public policy often depend on non-economic factors.

Returning to the subject of minimum wage, said the theory says that by raising the minimum wage, employers reduce employment; from which follows this implicit assumption: employers hire each worker at his market wage. But what if employers set wages? ; Robinson (1933) showed, in this case, that imposing a minimum wage can increase employment, and as part of credible evidence, studies of the new federal minimum wage in the 1940s have focused on southern textile mills. This same idea, but with a control group, was taken up by Card in a study he conducted in New Jersey (NJ) and Pennsylvania (PA) in 1994.

Conservative economists, like the Nobel Laureate James Buchanansaid that no self-respecting economist would argue that minimum wage increases increase employment. Such a claim, according to Card, amounts to denying that there is minimal scientific content in economics and that, therefore, economists can do no more than write as advocates of ideological interests.

After 2000, many states adopted minimum wages. However, the the federal minimum wage is frozen, and the opposition still uses concern about job losses as its main argument. Even if the minimum wage has limited effects on employment, it can nevertheless result in lower corporate profits. Afterwards, Map David questioned: is the fear of losing one’s job really the main problem?