98 - Noah Smith on Immigration Economics

Episode Summary

Executive Summary: The episode features Noah Smith discussing immigration, nativism, blogging, and U.S. regional economic change. He argues that illegal immigration from Mexico has largely stopped, legal immigration is more skilled than before, public opinion remains broadly pro-immigration, and most labor-market fears are overstated. He links current anti-immigrant politics to racialized voting fears and cultural backlash, while remaining optimistic that immigrants, technology, and assimilation will support U.S. growth.

Main Topics: Noah Smith’s path from economics to punditry (Priority: 4/5): Smith explains how blogging, behavioral finance, and a desire to be a generalist moved him from academia to Bloomberg View. Beckworth emphasizes the value of formal economic training in public commentary. The decline of illegal immigration and the rise of skilled legal immigration (Priority: 5/5): Smith says illegal immigration, especially from Mexico, has effectively halted since 2007, driven by falling Mexican fertility, rising Mexican income, and visa overstays rather than new border inflows. At the same time, the immigrant mix has become more educated. Public opinion and political conflict over immigration (Priority: 5/5): The discussion covers polling that generally favors maintaining current immigration levels and rejects sharp cuts to family reunification, contrasted with Republican efforts to reduce legal immigration and the rise of anti-immigrant politics. Nativism, race, and historical cycles (Priority: 5/5): Smith argues the current backlash is fueled less by short-term recession effects than by racialized bloc-voting fears and Europe-related anti-Muslim anxiety, and he places it in a long U.S. history of anti-Catholic and racial nativist waves. Immigration’s effects on wages and fiscal balance (Priority: 5/5): Smith says the evidence shows little to no effect on native wages or employment, especially in refugee-wave studies, but that fiscal effects vary sharply by education: low-skill immigrants can cost more while college-educated immigrants are large net contributors. Immigration, fertility, and the aging society problem (Priority: 4/5): The conversation connects falling Hispanic fertility and broader U.S. sub-replacement fertility to the need for immigrants to support Social Security, pensions, and the real production required to sustain retirees. Technology, productivity, and long-run optimism (Priority: 4/5): Smith ends on an upbeat note, arguing that productivity growth, innovation, and assimilation will keep the U.S. strong, and that periodic nativist waves historically fade as newcomers integrate.

Key Arguments: Blogging can be a legitimate gateway into economics and public policy, but grad students should blog professionally rather than wage ideological wars. Illegal immigration into the U.S. has largely stopped; current inflows are mostly visa overstays and small residual flows, not the mass border influx of earlier decades. Mexico-specific migration pressures fell because Mexican fertility collapsed and Mexican income rose above the level that typically produces large emigration. The immigrant population is becoming more educated over time, raising the average fiscal and economic value of immigration. Most polls show Americans prefer keeping immigration about where it is now rather than sharply reducing legal immigration. Anti-immigration politics is driven more by racialized voting fears and cultural anxieties than by the Great Recession itself. Historical U.S. nativism has repeatedly targeted different out-groups, especially Catholics and later southern/eastern Europeans, and often fades after broader national integration. Evidence from refugee waves shows little to no meaningful negative impact on native wages or employment. Fiscal effects depend on skill: low-skill immigrants can be net costs, while college-educated immigrants tend to be major fiscal gains. Immigration helps address population aging and supports the real economy that must produce goods and services for retirees. Higher-skilled immigration also supports innovation clusters, entrepreneurship, and U.S. technological leadership. Long-run U.S. optimism rests on assimilation, intermarriage, technology, and the ability to absorb newcomers over time.

Data Points: Illegal immigration decline: Halted in 2007 - Smith says illegal immigration effectively stopped before the Great Recession and did not rebound materially during the recovery. Mexican fertility: Fell from roughly 6 children per woman to around replacement level - Used to explain why Mexican emigration pressures weakened over time. Mexico income threshold: About $15,000 per person per year - Smith cites this as the point where large immigrant outflows usually diminish. Mexican net migration: Negative since the Great Recession - More Mexicans have left the U.S. than entered on net in recent years, according to Smith. Education of immigrants in the 1970s: 51% had less than a high school education - National Academy of Sciences data cited to show the immigrant skill mix has improved substantially. Education of immigrants today: About 25% have less than a high school education - Shows a sharp decline in low-education immigration over time. Asian vote shift: About 70% vote Democratic - Smith says Asian voters have moved toward Democrats as immigration politics became more racialized. Hispanic vote shift: About 70% vote Democratic - Smith links this to Republican anti-immigrant politics and bloc-voting fears. Immigrant fiscal effect by skill: College-educated immigrants provide a huge fiscal benefit - Smith contrasts this with low-skill immigrants, who tend to be net fiscal costs. Recent immigrant intermarriage: Upwards of 40% - Used to support Smith’s claim that immigrants integrate over time. U.S. fertility: Below replacement level - Smith notes that falling fertility increases the need for immigration and/or productivity gains. Hispanic fertility: Fell from over 3 children per woman to around 2 - He says this collapse drove much of the overall U.S. fertility decline.

Pivotal Quotes: "Yes, absolutely start a blog... But do not do the kind of blog I did." — Noah Smith: Advice to economics grad students about blogging professionally without engaging in personal attacks or partisan flame wars. "Illegal immigration has effectively halted." — Noah Smith: Core claim about the current state of unauthorized migration into the United States. "There is such a thing as a free lunch, and it’s called productivity growth." — Noah Smith: His broader macroeconomic point that innovation and rising productivity remain the key route to prosperity.

Implications: Listeners should see immigration as a changing flow, not a static crisis: today’s U.S. policy debate is increasingly about skill mix, family reunification, and political symbolism. The long-run outlook is positive if America keeps assimilating newcomers and raising productivity.