Economy


Kevin Johnson has another great link: the Rand Corporation’s study on public spending on health for immigrants.

The report – which appears in the November edition of the journal Health Affairs – estimates that in the United States about $1.1 billion in federal, state and local government funds are spent annually on health care for undocumented immigrants aged 18 to 64. That amounts to an average of $11 in taxes for each U.S. household. In contrast, a total of $88 billion in government funds were spent on health care for all non-elderly adults in 2000.

About 1.25% of federal funds for health going to illegal immigrants. Is that really a lot? Some would say yes, but to put things in perspective, a major disaster would probably increase federal health spending by that much or more. Rand estimated that $2 billion would modestly provide for Katrina victims without insurance (not even all of them). That is to say, $2 billion would cover differences, not treat all Katrina victims.

The population of illegal immigrants has not dropped on our laps over night. They have been in the United States since the invention of the category (the 1880s). If anything, increases in health spending relative to them parallels general rising costs. And if the health system can’t handle an extra $1.1 billion, is it really working properly.

Aside: in other countries, I would expect to enjoy the benefits of their health care systems. Maybe not getting care for free, but in European nations the subsidies for health care drive down prices even for those paying out of pocket.

Who is an immigrant? Earl Shorris, in Life and Times of Mexico, says that the greatest pressure to move, socially, are the poorest Mexicans–mostly the Indians. Now, movement can mean transition from rural life to urban life, a fact that is reflected in the population growth of Mexico City. However, social mobility does not translate into upward mobility: the Europeanized elites maintain control of power over natives, and the urbanized natives remain in poverty. Equally risky, but more advantageous, is migrating to the United States.

Vincenzo Caponi (Institute for the Study of Labor) looked at the relationship between education and migration to US from Mexico (link to abstract: Heterogeneous Human Capital and Migration: Who Migrates from Mexico to the US?). What he finds is interesting: the least and the most educated leave; those with some education remain. By some education, he means primary and some secondary education. But that group seems to be able to make the most out of the education it receives. The least educated find that they have no opportunities, while the most educated find that opportunities are not commensurate with their education.

Caponi reads these trends as a U-curve: those with some educated are most stable, those outside that group have the most incentive to leave. Improvements in education don’t seem to affect the trend.

The U-CurveSo, what to make of recent job growth in Mexico: will it keep people home? Doubtful. Most of the 950,000 jobs created are in sectors that require some education: construction and manufacturing. It may be true that “one job ends … and there’s another,” but the fact that job creation is not reaching the poorest Mexicans probably means nothing will change. Nor should it be expected. Investment will go to those parts of the economy that create the most exports, thus demand more skilled, industrial labor. The poorest Mexicans will remain where they are … or come to the US.

Spain figured it out: “the health of the economy depends to a great extent on immigrants“!

LA BONNE SANTÉ de l’économie espagnole dépend en grande partie des immigrés. Telle est la conclusion du rapport sur le poids de l’immigration dans les finances du pays, présentée cette semaine par le bureau économique de la présidence du gouvernement. Réalisée par Miguel Sebastian, principal créateur du programme économique du Parti socialiste espagnol (PSOE) et candidat à la municipalité de Madrid, cette étude entend balayer les clichés sur le rôle néfaste de l’immigration dans la société espagnole. Elle cherche également à faire taire les critiques des opposants aux régularisations de clandestins.

8% of the population, that add 4.7 billion euros to the economy after consumption of public services is accounted for. The results are staggering: “half of the growth of the Spanish economy is the fruit of immigrants’ work.”