economics and immigration policy 8.04.2005

Islamist Violence and Immigration Policy
Krugman's column ["French Family Values", New York Times, Friday July 29] does not mention Europe's Muslims, but in defense of the French (more broadly, the European) model, argues that the French have made a good trade--their average incomes are significantly lower than those of Americans, but they work a good deal less. This is partly because of a much higher unemployment rate than in the United States (Krugman's complacency about high unemployment is notable), but mainly because Western Europeans work fewer hours per week, take much longer vacations, and retire earlier. In effect they trade material goods for leisure, a trade that Krugman regards as a sign of high civilization. Krugman (here relying on a recent working paper by the economists Alberto Alesina, Edward Glaeser, and Bruce Sacerdote) recognizes that the greater leisure of the French and other Europeans is, as it were, forced, because it is the product of laws that restrict labor mobility and hence work opportunities, make it difficult to fire lazy workers, provide a variety of economic benefits uncoupled from work, and even restrict the number of hours a week a person can work. But, further relying on the working paper, Krugman argues that without compulsion, workers could not get the amount of leisure they really want, because leisure is not worth as much if other people don't have it, assuming leisure has a strong social component--that you engage in leisure activities with other people, and therefore suffer a loss if they don't have leisure time to spend with you.

Krugman's failure to relate the European model to Europe's Muslim problem is telling. To point to the upside of Europe's social model without mentioning the most serious downside is to provide bad advice to our own policymakers. The assimilation of immigrants by the United States, compared to the inability of the European nations to assimilate them--with potentially catastrophic results for those nations--is not unrelated to the differences between economic regulation in the United States and Europe. Because the U.S. does not have a generous safety net--because it is still a nation in which the risk of economic failure is significant--it tends to attract immigrants who have values conducive to upward economic mobility, including a willingness to conform to the customs and attitudes of their new country. And because the U.S. does not have employment laws that discourage new hiring or restrict labor mobility (geographical or occupational), immigrants can compete for jobs on terms of substantial equality with the existing population. Given the highly competitive character of the U.S. economy, in contrast to the economies of Europe, employers cannot afford to discriminate against able workers merely because they are foreign and perhaps do not yet have a good command of English. By the second generation, most immigrant families are fully assimilated, whatever their religious beliefs or ethnic origins.

In contrast, even in a country such as France that has a declared policy of requiring all immigrants to assimilate, immigrants from alien cultures, such as that of the Islamic world, tend to be marginalized and isolated, even in the second and later generations. European unfriendliness to immigrants might be thought a cultural rather than an economic phenomenon, but the paper by Alesina, Glaeser, and Sacerdote on which Krugman relies argues that the European preference for leisure, also supposedly cultural, rests on policy, specifically the employment laws. So too in all likelihood is the difficulty European nations have in assimilating immigrants. The less fluid, less competitive, less market-oriented, and indeed less materialistic (the only color important to businessmen is green) a national economy is, the less opportunity it will provide to alien entrants.

(Emphasis mine.)

posted by William Woody at 10:45 AM

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