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In the past few years, immigration has changed the demographic composition of a majority of the developed countries. Currently, there are a lot of immigrants in the United States. In fact, the issue of immigration was a fundamental problem in the just concluded presidential elections. Immigration has numerous impacts on the social and economic life of the country of destination (Hainmueller and Hiscox 65).
It results in economic inequalities. Consequently, the government is compelled to introduce new income redistribution and welfare policies to cater for the disparities. Economic impacts attributed to immigration contribute to people accepting or rejecting immigrants. Numerous studies show that financial concerns influence public attitudes toward immigration. Native individuals who experience financial hardships as a result of immigration are unlikely to accept immigrants (Hainmueller and Hiscox 67). Indeed, evidence shows that fiscal concerns shape public opinion regarding immigration. This report will discuss how economic interests contribute to native people embracing or rejecting immigrants.
Contribution of Fiscal Concerns
Scholars have used numerous theoretical approaches to describe how financial worries shape public attitudes towards immigrants, particularly in developed countries. The political economy approach considers the economic impacts of immigration that lead to native people rejecting or embracing immigrants. Native-born citizens may have negative attitudes towards immigrants due to self-interests (Mayda 512).
Immigration forces governments to restructure their budgets and financial policies. The native citizens may have to pay high taxes to cater for increased government expenditure. The indigenous people are not happy with such changes. The factor proportion (FP) model is “an economic replica that assumes perfect substitutability between natives and immigrants and renders the distributional effects of immigration in stark terms” (Hainmueller and Hiscox 64).
According to the model, the entry of low-skilled immigrants into a country would negatively affect the wages given to unskilled local employees. Conversely, it would result in an increase in the wages given to highly skilled indigenous employees.
Material self-interest influences immigration attitudes (Rowthorn 563). Native people who are likely to benefit from immigration will embrace immigrants and vice versa. The study shows that employees with little skills are mostly opposed to immigration (Rowthorn 567). They view it as a threat to their employment. A study from the International Social Survey Program revealed that the degree of skills amid the natives contributes to their support or rejection of immigrants.
Immigrants are accommodated in countries with highly skilled residents. The highly skilled natives are likely to profit from the earnings effects attributed to immigration (Rowthorn 571). Numerous empirical and theoretical explanations counter the argument of the factor proportion model. A majority of the well-known models of immigration’s fiscal effects are vague about the impacts of residents’ wages (Hainmueller and Hiscox 76).
Thus, they pave the way for various predictions based on particular postulations regarding factor mobility, substitutability, nation’s product mix, and size of the country among other limitations. Based on this conjectural vagueness, studies conducted in the United States and Europe argue that wage impacts do not influence public opinion towards immigration. The studies demonstrate that the wage effects are insignificant or missing.
A glimpse at American states reveals that financial exposure does not necessarily contribute to anti-immigration sentiments. The factor proportion model suggests that countries with high redistribution are unlikely to accept immigrants. However, numerous American states negate this supposition. States like California and New York have high financial exposure. Nevertheless, the states do not discourage immigration. In fact, a lot of immigrants have moved to two states. The states are against anti-immigration sentiments as evidenced by their voting pattern in the recent presidential elections. One would argue that some states with high redistribution encourage immigration as it plays a significant role in their economies.
The state of California depends mainly on agriculture. Agriculture demands low-skilled labor which can only be sourced from the immigrants. Additionally, the growth of Silicon Valley requires high-skilled expertise that is sourced from Indian and Asian immigrants. In other words, residents of California have a positive attitude towards immigrants because they contribute to the economic development of the state (Hainmueller and Hopkins 229).
Conversely, the economy of the state of New York depends on immigrants who work in the financial sector. The two states treasure immigrants. It underlines the reason natives accommodate foreign expatriates. The residents of New York and California states are highly educated. The study shows that there is a strong connection between education and support for immigration. A majority of educated people show high degrees of ethnic forbearance (Hainmueller and Hopkins 234).
Besides, they value cultural diversity. As a result, they are likely to support immigration. The residents of New York and California states do not see immigrants as a threat to their wages. Instead, they view them as drivers of the economy. Financial concerns do not shape public opinion towards immigrants amid the natives who are highly educated (Mayda 521). The residents consider other factors like cultural values.
A study conducted in the United States found that immigration leads to natives bearing the tax burden for a short period. Once the immigrants settle in the host nation, they look for employment and start contributing to the country’s economy. Countries with aging labor forces benefit tremendously from immigrants. The immigrants contribute to lasting public fiscal gains. In the United States, temporary economic impacts dictate lasting effects in determining the natives’ opinions towards immigration. Based on the available evidence, it is clear that concerns about tax burden do not necessarily contribute to anti-immigrant sentiments.
Numerous studies have analyzed the contribution of labor market competition to shaping people’s outlooks towards immigration. According to the studies, immigration does not expose most Americans to economic threats (Mayda 527). It underlines why the Americans do not oppose immigration. In fact, the United States offers chances to people who wish to relocate to the country. Every year, the United States government issues green cards to thousands of immigrants across the globe.
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Anti-immigrant sentiments are most common in countries where immigrants subject the natives to economic threats. Immigration intensifies labor market competition in some countries. In return, the residents oppose immigrants because they deprive them of an opportunity to get jobs. For instance, natives who work in high-tech industries are against their countries encouraging the influx of foreigners with technological skills.
The immigration of low-skilled workers contributes to the increasing economic burden of the native people. Immigration impacts the post-tax earnings for residents (Hanson et al. 24). Low-skilled immigrants are unable to cater for all their needs. Hanson et al. posit “low-skilled immigrants are a net burden for public finance” (27). An influx of low-skilled immigrants to a nation forces the government to raise the tax to minimize economic pressure. Alternatively, the government reduces the amount of money used to provide social services. Studies show that natives who receive high wages are likely to oppose the influx of low-skilled immigrants because it would affect their earnings. However, the natives would not be opposed to the arrival of high-skilled immigrants as the government would not require spending money to support them.
When people move to foreign countries, they settle and look for employment. As a result, they impact the welfare states and politics of redistribution of the host nation. Research indicates that immigration may have counterbalance repercussions on such politics. In some countries, immigration may result in a rise in support for redistribution. However, in many cases, immigration results in social and fiscal repercussions that spell doom to welfare states and redistribution (Burgoon 368).
A majority of the immigrants who relocate to European countries are not educated. Additionally, they are unable to secure permanent jobs. Indeed, about 8.5 percent of immigrants do not secure jobs (Burgoon 368). Immigrants tend to rely heavily on social policy programs due to unemployment. Additionally, they add little to the revenue base. As a result, a majority of the natives view immigrants as an economic burden to their country.
Immigrants do not benefit from services and contributory transfers like the pension plan which are funded via payroll taxes. Nonetheless, since most immigrants are poor, have many dependants, and are jobless, they receive support from the government in the form of welfare programs. Studies conducted in Europe found that immigrants “contribute less in taxes than they receive in social benefits” (Burgoon 379).
Hence, most European natives do not support immigration. They argue that immigrants add no value to the economy. Indeed, a majority of citizens from countries with liberal redistributive policies are strongly opposed to immigration.
Besides economic repercussions, immigration has social consequences that may lead to reduced support for redistribution amid the natives (Dustman 41). Polities that encounter a significant influx of immigrants may suffer from limited social interaction and social disintegration amid the natives. Some scholars argue that immigration, “particularly when ethnic heterogeneity is introduced, may lower solidarity, trust, and social capital among the population” (Dustman 41).
Because immigration poses a threat to solidarity, its increase may result in reduced support for redistribution. A majority of the native people in Europe argue that immigrants do not deserve to enjoy the protection and social benefits. Instead, the government ought to extend the benefits to the disadvantaged groups like the disabled, the aged, and the unemployed. Rising immigration results in an increase in the number of “less deserving” individuals in a country. Eventually, it makes the native people oppose redistribution and by extension immigration.
The specific-factor model holds that immigration is supposed to result in a factor-price balance (Dustman 45). The model argues that immigration should not adversely affect the working condition and salaries in the country of origin as well as the host nation. However, this does not happen in the majority of European countries. The influx of semiskilled and unskilled immigrants results in a decrease in wages.
Additionally, it adversely affects working conditions and subjects the unskilled natives to the risk of job loss. As a result, immigration triggers stronger demand for redistribution to cater to such hazards. At times, immigration causes labor elasticity in the host country (Dustman 51). It becomes hard for the natives to secure jobs, thus earning a little income. In such a situation, immigration leads to residents supporting welfare states and redistribution. Economic implications of immigration may lead to social segregation and inequalities that people identify as challenges that require compensating (Finseraas 409). In other words, immigration can result in the emergence of common risks which may rouse sociotropic apprehension and call for redistribution.
A gap in unemployment may lead to immigration provoking sociotropic apprehension regarding collective inequalities, thus encouraging a call for redistribution (Freeman 55). In countries where there is a higher rate of unemployment amid immigrants than natives, immigration may arouse apprehension regarding shared risks. Gaps in unemployment result in unfairness and social segregation in labor markets.
However, there are no apparent repercussions of unemployment on personal economic uncertainties (Freeman 59). Natives in labor markets with gaps in joblessness are not prone to severe revenue or job risks. By contrast, disparities in unemployment are thought to change the impacts of immigration on philanthropy and economic cost and by extension the support for redistribution (Freeman 61). An increase in the number of unemployed immigrants minimizes the tax base and augments dependence on social benefits. Such a condition can influence people’s attitudes towards social benefits and economic cost.
Financial concerns influence public opinion on immigration. Highly skilled and low-skilled natives have mixed opinions of immigrants. The low-skilled natives are against an influx of young immigrants because they pose a significant threat to their jobs. On the other hand, highly skilled residents oppose the immigration of low-skilled immigrants as they adversely affect their income. In the states of New York and California, the natives are pro-immigration.
They believe that immigrants contribute to the growth of their economies. The state of California relies on agriculture. Thus, residents support immigration as it provides the state with low-skilled labor. Immigration impacts the support for redistribution. Gaps in unemployment which are attributed to immigration affect the support for redistribution adversely.
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