2007 August 16 Thursday
Tyler Cowen On Poverty And Immigration

While commenting on a book about poverty Tyler observes that descendants of immigrants do not respond to the same incentives as productively as the first generation does.

The more the poor regard themselves as lagging the rich (rather than doing better than, say, their peers back home in Gujarat), the more stupid risks they will take. That's why poor immigrants are more value-maximizing than the poor that have lived in America a long time and adapted to American norms and expectations. The immigrants don't regard their burdens as insuperable and they are on standard downward-sloping marginal utility curves.

Immigrant groups who do worse than the US average in education and achievements will have kids who will compare themselves to the middle and upper classes and become demoralized. The poor second and third generations who see no reasonable way up will take bigger risks and engage in more destructive behavior. The first generation immigrants who come Mexico or El Salvador will compare themselves to people in Mexico and El Salvador. Therefore they will feel relatively successful. But their kids will compare themselves to the average in America and feel woefully inadequate, frustrated, and very low status. They won't see long hours at menial jobs as the road to success. They'll see those jobs as the road to perpetual low status.

We should not allow in people who will do poorly. When we let such people in we are just creating a larger class of people at the bottom who will look upward resentfully at the people who earn more money than they do.

Share |      By Randall Parker at 2007 August 16 12:58 AM  Immigration Economics

John Savage said at August 16, 2007 12:54 PM:

Great post!

I've seen it asserted many places that crime goes down as immigrants initially arrive, but as their children grow into their prime years for crime, it goes back up. But I'd never seen it explained like it is here. That would make sense.

I suppose it's just a fact that the more inequality a society has, the higher the costs of maintaining that inequality. Any class of people brought in to do menial labor will eventually become a menace to society, unless they can move up. Unless we have some avenue for upward mobility, they will just become a burden. And who seriously thinks they will have a way to move up in large numbers?

John S Bolton said at August 16, 2007 1:04 PM:

Economics is intellectually handicapped in explaining and predicting behavior which is not rational on their much-too-narrow, indeed philistine, assumptions. They cannot account for competition for prestige where economic gains would be foregone. Add egalitarian premisses into this mix of philistinism, artificially constrained narrowness of what is to be predicted as motivating, and you get stupefied incomprehension over the most obvious facts of life. One of the foremost of these, well-known to almost any demagogue, is that for each point of IQ differential between two groups, the lwer one has greater incentive to push status competition towards one of ruthless violence and away from any which correlate positively with IQ.

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