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date: 25 September 2017

Immigration and International Political Economy

Summary and Keywords

Immigration has largely been neglected as part of the study of International Political Economy (IPE) until recently. Currently, IPE scholars have focused on two questions regarding immigration: what explains variation in public opinion on immigration and what explains variation in immigration policy.

The scholarship on public opinion on immigration has largely been divided into two camps, those who argue that economic factors drive opinion and those who argue that cultural factors are the driver. Those who study the role economic factors have played in shaping opinion on immigration often start with the Stolper-Samuelson theorem. The Stolper-Samuelson theorem shows that while immigration increases the overall size of the economy, it has different distributional effects. Immigration increases the size of the labor pool and, thus, should increase the returns to capital while decreasing wages. As such, those who derive most of their income from capital should favor immigration while those who derive most of their income from wages should oppose immigration. Additionally, the Stolper-Samuelson model shows that openness to trade should have the same effects as open immigration; thus, people should oppose or favor both trade and immigration. Early scholarship examined these predictions and found that opposition to immigration was much higher than opposition to trade and that those who derive much of their income from capital also oppose immigration at high rates. In response, one set of scholars focused on the additional costs that immigration, but not trade, brings. Immigrants, unlike goods, may place a burden on the social welfare system and thus, opposition to immigration especially by the wealthy may be driven by these costs. Other scholars noted that immigrants work in many industries that are unaffected by trade—most notably the service sector—and this may explain opposition to immigration. Finally, a third group has argued that opposition to immigration is largely driven by cultural concerns and xenophobia. Currently, this debate continues with both sides examining more nuanced survey data.

Scholarship on immigration policy has similar divides. Immigration policy has become more restrictive since the late 19th and early 20th centuries, when most countries had very few restrictions on immigration. To explain these restrictions, one school of scholars has argued that labor unions oppose immigration, as it hurts the wages of their members. As unions gain strength, immigration should become more restricted. Others focus on the rise of the welfare state, arguing that immigration has been restricted to keep costs low. A third group has argued that greater political rights in the early and mid-20th century for the generally xenophobic working class has led to the restrictions. Finally, new scholarship argues that increased globalization—in the form of increased trade and increased foreign direct investment—has sapped business support for immigration, which has allowed anti-immigrant groups to have more say. Using a wealth of newly collected data, scholars are testing these different theories.

Keywords: immigration, public opinion, trade, capital, investment, political economy

Introduction

Immigration has increased in importance in recent years, as the Syrian refugee crisis in the Middle East and Europe, the British referendum to exit the European Union (what was termed the Brexit), and the rise of anti-immigration politicians like Donald Trump have made eminently clear. These events have shown the strength of the anti-immigration coalition. Yet, in many ways this strength is puzzling: economists have long argued that open borders are the way to prosperity. So, why then are borders relatively closed?

One strand of the literature has sought to answer this puzzle by examining mass opinion on immigration. Opinions on immigration seem to explain how Britons voted on the Brexit and why many Americans support outsider candidates, like Donald Trump, and thus are of increasing importance. Why do some people favor greater immigration while most others oppose it? The literature has focused on whether material concerns or nonmaterial factors best explain opposition or support for immigration and as yet, has not come to a consensus.

Another strand of the literature focuses on what explains immigration policy. Moving from opinion to policy is not always straightforward as domestic institutions and other factors often separate the policymaker from public opinion. In this literature, the key question is what explains countries’ different immigration policies and what explains how those policies have changed over time. The literature has focused on different interest group alignments as well as different institutions to explain the variation in policy. Finally, there is a smaller literature on how immigration affects other areas of the international economy. The theoretical underpinnings of the scholarship on immigration in International Political Economy (IPE), the recent debates, and directions for new research will be discussed.

Theoretical Underpinnings of Preferences on Immigration

To explain preferences on immigration, most scholars start by examining how immigration affects the material well-being of natives. In the early days of economics, the focus on international factor movements—the movement of goods, capital, and people—was on the total effect of these movements. As economists argued, the movement of people would increase total world income as well as the income of individual countries by reallocating labor to where it could be used most efficiently. For example, if we imagine a world in which there was no migration, then some countries, due to differential birth, mortality, or economic growth rates, would have too few people in comparison to the number of workers they needed while others would have too many. In countries with too few people, there would be the squandered potential for greater economic output, as there are not enough people to work. In countries with too many people, there would be wasted human capital as there are not enough jobs for everyone. If the world had open borders, then people could move from countries where their human capital was wasted to countries that needed more labor, increasing economic growth (Clemens, 2011). According to this logic, people should be free to move among countries as they see fit.

Distributional Effects of Immigration—The Stopler-Samuelson Theorem

Yet, the lack of open borders, especially after the Great Depression, led economists and others to theorize why countries might close their borders. In the 1940s and 1950s, scholars like Samuelson (1948) and Mundell (1957) theorized how trade and capital flows, along with migration, would affect natives differently and thus might lead to different policy outcomes. The Stolper-Samuelson (1941) theory, which is still one of the workhorse theories in economics and political science, shows the distributional effects of immigration. Imagine two countries, Country A and Country B. Country A has much capital (what we term a capital abundant country) but relatively few workers (what we term a labor scarce country). In comparison, Country B has little capital (it is a capital scarce country) but much labor (it is a labor abundant country). Wages in Country A, then, will be relatively high, as there are few workers, while returns to capital will be low, as there is much capital. Country B will have the reverse: low (relative) wages and high (relative) returns to capital. If Country A opens its borders to immigration from Country B, people will move from Country B to Country A and wages in Country A will fall as there are more workers while they will increase in Country B as there are fewer workers. Returns to capital in both countries will change too; in Country A, there are more workers per dollar of capital, which will increase returns to capital, while in Country B, there are fewer workers, so returns to capital will fall. In extreme, workers will move from Country B to Country A until wages in both countries are equal.

While there are many reasons that the Stolper-Samuelson model may fail to hold in reality (see Markusen, 1983), it nonetheless serves as a useful model for examining one set of material concerns about immigration; namely, its effect on wages. Because immigration may decrease wages, native workers should oppose open immigration. Conversely, natives who receive much of their income from capital—landowners, business owners, investors, etc.—should favor immigration. Stolper-Samuelson, then, leads to one prediction on preferences on immigration: capital owners should favor open immigration while native workers should oppose it.

Scholars have refined the Stolper-Samuelson model to differentiate between low-skill and high-skill labor. If we imagine that instead of being capital abundant, Country A is high-skill labor abundant and that instead of being labor abundant, Country B is low-skill labor abundant, then wages for high-skill (low-skill) workers in Country A would be relatively low (high) in comparison to Country B. With open borders, low-skill labor would move from Country B to Country A and high-skill labor would move in the opposite direction. Wages for low-skill workers in Country A would fall while wages for high-skill workers would increase. In this case, high-skill natives should favor immigration while low-skill natives should oppose it.

Yet even with different distributional effects, immigration should make labor more efficient and lead to higher economic growth. As open immigration would increase economic growth, theoretically, it is possible to redistribute some of the gains that capital owners get from immigration to native workers who face lower incomes. A potential refinement on the Stopler-Samuelson theory would be that native workers who live in countries with generous welfare states would be more likely to support open immigration as the gains are more likely to be redistributed to those who lose income.

Mobility across Industries—Ricardo-Viner

One assumption of the Stolper-Samuelson model is that workers can easily move from one industry to another. While this might hold in the long run—workers could retrain or gain new skills—it is less likely to hold in the short run. In this case, only the workers in industries that immigrants work in would see their wages affected by immigration. Other workers would be relatively insulated from immigration. Only those natives in industries that immigrants work in, then, should oppose immigration while the rest should favor immigration as it reduces the cost of the goods they buy.

Substitutes or Complements

Another reason that the Stolper-Samuelson model may not hold is that immigrants may be complements for native workers rather than substitutes. The Stolper-Samuelson model assumes that immigrants can do the job that natives do; however, in many industries there are jobs that requires skills specific to natives, such as language or cultural knowledge, that new immigrants do not possess (see, e.g., Borjas, Grogger, & Hanson, 2008; Longhi, Nijkamp, & Poot, 2005; Ottaviano & Peri, 2012). For example, in restaurants, a new immigrant is able to cook the food without native-specific skills but might have a harder time as a waiter because he or she does not know the native language or culture well. Eventually, the immigrant can learn these skills but in the meantime, the native-born cook may be able to move up to waiter and earn more money. Because in most industries there is a need for country-specific language or cultural skills, immigrants are often complements rather than substitutes for natives. Immigration allows natives to take the jobs that need more skills while overall making companies more productive by better allocating labor. If opinions and policy on immigration follow from this model, then the more immigrants complement native workers, the more natives of all skill levels should support immigration.

Fiscal Effects of Immigration

Thus far, the discussion of immigration has been based solely on the labor-market effects of immigration; however, immigration can affect more than just the labor market. One often cited concern about immigrants, especially low-skill immigrants, is that immigrants might become a drain on the social welfare state and fiscal health of the state. Because new immigrants are often the last to be hired, they are often the first to be fired and so are at a greater risk of unemployment. Immigrants also tend to be poorer than natives, at least at first, which may mean they need more government assistance than natives.

Yet, there is not much evidence that immigrants are a fiscal drain (see, e.g., Dustmann & Frattini, 2014; Smith & Edmonston, 1997). In part, this is due to the very nature of immigration. Most immigrants move to a new country to work and return home when they cannot find a job; as such, much of their time in a new country is spent working, not accessing social welfare benefits, which they may not be eligible for or may not know that they are eligible for. There are also life-cycle effects of immigration that tend to make immigrants a net fiscal gain. People in general place the greatest burden on the fiscal system when they are young—children do not work and they need schooling or other care—and when they retire—when they cease to work and need expensive medical care. Most immigrants do not move to a new country until they are past school age and many return to their home country when they retire. Together, this means that most immigrants are in the immigrant-receiving country only during their prime working age and are net-contributors to the system. These effects are stronger the more money immigrants make; the net benefit of a college-educated immigrant—someone who makes a high income and thus pays much in taxes—to the fiscal system is often in the hundreds of thousands of dollars while even an immigrant with less than a high school education—someone who makes lower wages and so pays less in taxes—often has a small positive effect or, at worst, a small negative effect (Dustmann & Frattini, 2014; Smith & Edmonston, 1997).

Nonetheless, if immigrants have an effect on the fiscal system we should expect that natives should favor high-skill immigration and oppose low-skill immigration. Wealthy natives favor high-skill immigration because high-skill immigrants contribute much in taxes, reducing the natives’ own tax burden. They oppose low-skill immigrants for fear that they would increase the wealthy natives’ tax burden. Poor natives would also favor high-skill immigrants, as they would increase the tax base that they could draw benefits from, and would also oppose low-skill immigration as it might lead to crowding out.

Nonmaterial Sources of Opinion on Immigration

In addition to the effects of immigration on the labor market and fiscal system, natives may base their opinions on impacts of immigration that do not directly affect their material outcomes. One such model is the socio-tropic model of opinion. While an individual may not be directly affected by immigration, they may believe or know that others are affected by immigration and base their opinion on their perception of immigration on the country as a whole. Thus, even if natives believe that immigration is good for them personally, they may oppose immigration if they believe it is bad for the country.

A second nonmaterial effect of immigration has been on perception of crime. While there is little evidence that immigration leads to an increase in crime (Mears, 2001), natives may perceive that immigration is associated with crime. These perceptions, then, may lead natives to oppose all types of immigration.

A third nonmaterial effect may be felt at the ballot box. Immigrants may one day become citizens who can vote and, in many countries, can vote in local elections after a relatively short period of residency. While the partisanship of natives is often forged at a young age, immigrants’ partisan attachments, at least at first, may be more malleable (Hajnal & Lee, 2011). This malleability gives political parties an opening to cultivate new voters and gain political support (Dancygier & Saunders, 2006; Glaeser & Shleifer, 2005). Nonetheless, parties typically have to balance gaining this new electorate with keeping their old supporters who may be less supportive of immigration (Dancygier, 2013).

Finally, support for and opposition to immigration may be driven by the cultural effects of immigration. Immigrants bring their culture with them, increasing diversity in the receiving country. To some, these cultural effects are threatening and lead to an increase in nativism or the opposition to immigration based on the cultural effects of immigrants or based on xenophobia. Examples of nativism can be found throughout history. The United States saw waves of nativism against Catholic Irish and German immigrants in the 1840s, against Chinese immigrants in the 1860s and 1870s, and against Southern and Eastern Europeans in the late 19th and early 20th century (Higham, 1963). Similar waves of nativism against Asian immigrants and, later, immigrants from Southern and Eastern Europe sparked the so-called White Australia Policy (Jupp, 2002) and similar policies in Canada (Kelley & Trebilcock, 1998) and New Zealand (O’Connor, 1968).

While it is clear then that nativism can lead to immigration restrictions, it does not always do so—nativism in the United States toward immigrants from Mexico has not led to mass restrictions on Mexican immigration nor has anti-Muslim nativism in Europe led to mass restrictions on immigration of Muslims as yet. Nor is it clear when nativism is most salient or politically powerful; for example, the nativist Quota Acts of 1921 and 1924 were passed in the United States during relatively good economic times while few nativist laws were passed during the Great Depression in the United States. However, the Great Depression did spark a wave of nativist laws in other countries. Similarly, in their study of support for three anti-immigrant ballot propositions in California, Campbell, Wong, and Citrin (2006) find that the local racial context mattered for only one of them. Nonetheless, it is clear that nativists often, but not always, prefer immigrants who are more culturally similar to natives, those immigrants who come from countries that speak similar languages or share a religion.

It is also likely that cultural concerns interact with economic concerns. Dancygier (2010) argues that conflict between immigrants and natives is more likely during economic downturns. During downturns resources become scarce, which increases the salience of who will receive them. When immigrants make up a politically important block, they are more likely to receive resources, precipitating immigrant-native conflict (Dancygier, 2010). In contrast, where immigrants make up only a small fraction of the voting population, they are less likely to receive resources from the government and less likely to spark conflict with natives (Dancygier, 2010). In a different context, that of sub-Saharan Africa, Adida (2011) argues that economic competition may lead to nativism even between natives and immigrants who are culturally and ethnically very similar. She finds that indigenous leaders have an incentive to reify group boundaries between natives and immigrants when those immigrants can easily gain access to the same economic networks owing to their cultural similarity and ability to “pass” as natives (Adida, 2011).

Finally, there are those who like immigration specifically because of the cultural changes it makes. These cosmopolitans prefer living in countries with much diversity and value the cultural changes that immigrants make. Similarly, humanitarians prefer more open borders because they believe that immigration helps those from the developing world leave poverty and helps those fleeing persecution or violence. Cosmopolitans and humanitarians in contrast to nativists prefer immigrants from countries that are culturally dissimilar, that are very poor, or that are from countries that suffer from high levels of violence or are in a civil war.

Evidence on Individual Preferences on Immigration

The literature thus gives us a wealth of hypotheses on where individual preferences on immigration come from, based on both the material and nonmaterial effects of immigration and their interaction. One way in which scholars have tested these hypotheses is by examining public opinion on immigration. The political economy scholarship began with the view that, from a labor market perspective, respondents should hold similar views about trade and immigration. As discussed, the Stolper-Samuelson model shows that open immigration will lead to wage equalization between countries. It also shows that open trade will have the same effect. Assume that there are only two goods: computers, a product made with much capital (capital intensive), and T-shirts, a product made with much labor (labor intensive). In Country A, the capital abundant state, computers will be relatively inexpensive in comparison to T-shirts, because capital is inexpensive and labor is expensive. In Country B, the opposite will be true, computers will be relatively expensive in comparison to T-shirts because capital is expensive and labor is cheap. If Country A opens trade with County B, Country A will export its cheap computers and import Country B’s cheap T-shirts. This leads to the closure of firms that produce T-shirts, the loss of T-shirt manufacturing jobs in Country A, and an increase in the production of computers and the demand for capital. As the computer industry does not need as many workers as the T-shirt industry, there will be fewer jobs and wages will fall in Country A. Returns to capital will increase as there is greater demand for capital. Eventually, trade will continue until wages in Country A equal wages in Country B and returns to capital increase in Country A to equal those in Country B.

Thus, open trade should have the same effect as open immigration on individuals and individuals’ support for trade should be the same as their support for immigration: workers, especially low-skill workers, in developed countries (which are capital or high-skill labor abundant) should oppose both trade and immigration, and capital-owners and high-skill workers should favor both. Some of the early political economy literature on immigration sought to test whether this prediction held and found that it does not (Hanson, Scheve, & Slaughter, 2007; Mayda, 2008). Instead, trade is much more highly favored than immigration.

A number of reasons have been suggested for this divergence. As noted, the Stolper-Samuelson model relies on the assumption that labor is fully mobile between sectors. If it is not, then the effects of immigration and trade may be felt at the sector level rather than felt by workers in general (what is known as the Ricardo-Viner model). Because not all goods and services can be traded—the classic example is that a haircut cannot be traded—not all sectors are exposed to trade. However, immigrants can work in almost every sector. Thus, it is not surprising according to this argument that immigration faces greater opposition than trade. Mayda (2008) and Dancygier and Donnelly (2013) find evidence that survey respondents in industries with greater number of immigrants are more opposed to immigration than those in other industries. Similarly, Malhotra, Margalit, and Mo (2013) use an oversample of respondents in areas with many information technology workers and find that respondents oppose immigration of information technology workers but do not oppose immigration in general, again supporting the Ricardo-Viner model.

Other scholars have focused on the fiscal effects of immigration. Immigrants may use the social welfare system and often place a strain on local governments that is not adequately compensated for by the central government. In contrast, traded goods do not use the social welfare system and further, at least in the United States, even when trade policy leads to layoffs, these layoffs have a far smaller fiscal effect, being constrained by trade adjustment assistance legislation. By this logic, respondents may be worried that an increase of immigrants, especially low-skill immigrants, will lead to an increase in taxation to pay for the expanded use of the social welfare system or crowd out their own use of these services. There is some evidence for this argument as well (see Citrin, Green, Muste, & Wong, 1997; Hanson, Scheve, & Slaughter, 2007; and Harell, Soroka, Iyengar, & Valentino, 2012; but see Tingley, 2012).

Other scholars have argued that individual-based economic arguments fail because individuals vary on the fundamental value of tolerance and tolerance explains support for immigration to a much greater extent than economic concerns (see Hainmueller, Hiscox, & Margalit, 2011; Harell et al., 2012; and Sniderman, Hagendoorn, & Prior, 2004). For some, the nativists, immigration increases the threat of changes to the national culture or competition over scarce resources while for others, the cosmopolitans and humanitarians, the cultural changes will be welcomed.

However, testing skills-based explanations against tolerance-based explanations has been difficult because scholars rely on the same proxy, education, as a measure of their explanatory variable, whether that is skill or tolerance (see Hainmueller & Hiscox, 2006, 2010). In two innovative studies attempting to separate the two possible causes, Hainmeuller and Hiscox looked at whether attitudes varied by employment status (2006) or skill level of immigrants (2010), and found that educated respondents’ held more positive attitudes to trade and high-skilled immigration, even if they were not in the workforce. If driven exclusively by job concerns, we would expect that those out of the workforce would not respond to trade questions in the same manner as those employed in the labor force and that high-skill natives would not favor high-skill immigration. Further innovations in survey development have allowed for additional testing of these arguments. Hainmueller and Hopkins (2015) use a conjoint experiment—an experiment that allows the researcher to randomly vary the characteristics of an immigrant (or anything else)—and find a consensus in opinion on immigration in the United States: respondents overwhelmingly want highly educated immigrants in high-status jobs whereas they view low-skill immigrants, those who enter illegally, and those who do not speak English unfavorably. Few variables that measure the respondents’ economic position, partisanship, or ethnocentrism seem to explain these opinions, however.

Other scholars have viewed this consensus and the inability of material factors to explain both immigration and trade opinions as pointing to socio-tropic concerns explaining opinion (see Citrin et al., 1997). They find that opinions of how immigration affects the nation drive opinions on immigration policy and that perceptions about the national economy affect opinions on both issue areas. It is less clear from these studies, however, just how opinions about the effects of trade and immigration on the nation are formed and how this interacts with the effects of these policies (Fordham & Kleinberg, 2012).

Finally, newer scholarship re-examines all these arguments and finds that material concerns matter but that scholars have been measuring material concerns improperly. Goldstein and Peters (2014) use a panel survey of respondents before, during, and after the Great Recession (2007–2012) to examine changes in support for immigration rather than simply looking at levels of support. They find that individuals’ economic concerns predict change in immigration opinions but that these economic concerns are not well predicted by observable conditions. Instead, our measures of observable conditions are still too noisy at the individual level to understand an individual’s economic positions and concerns for the future. Individuals, they find, do have a baseline level of support for immigration based on their education, race, gender, and other factors, but their changing support can be best explained by changes in their own economic circumstances.

Gerber, Huber, Biggers, and Hendry (2014) ask individuals specifically about hypotheses raised in the literature about support for immigration rather than imputing concerns based on observable factors as earlier research had done (see for example, Hanson, Scheve, & Slaughter, 2007 and Harell et al., 2012). While they also found that high-skill individuals are generally more open to immigration, they found that on average, survey respondents thought that immigration would lead to a loss of household income or jobs, increased taxes, decreased services, overall higher costs for goods and services, and overall loss of household income. Further, concerns about the job and income loss and increased taxation due to immigration highly predict attitudes on immigration. While this may be post-hoc justification of anti-immigrant attitudes on the part of respondents, it does suggest that individuals are motivated by economic concerns that were improperly measured before.

In sum, while there is little consensus on what explains individual attitudes toward immigration, there are some emerging patterns. Material concerns alone cannot explain opinions; instead there seems to be a combination of material and cultural explanations for opinion on immigration. High-skill and highly educated natives are much more supportive of immigration than natives with less education, suggesting that education leads to tolerance. Finally, it is clear that most natives greatly prefer the immigration of highly skilled immigrants and oppose that of low-skill migrants.

From Opinion to Policy: Interest Group Activity on Immigration

While the literature is still debating how opinions on immigration form, it is clear that a plurality to a majority of natives oppose open immigration, at least for low-skill immigrants. Nonetheless, for opinions on immigration to translate into policy, they must be transmitted to elites. One way opinion gets translated to elites is through interest groups. While there are different models of how interest groups affect politics on immigration (see, e.g., Freeman, 1995; Facchini, Mayda, & Mishra, 2011; Givens & Luedtke, 2005; and Peters, 2014, 2017), most scholars believe that policymakers take into account the actions of interest groups when forming immigration policy. There are five major sets of interest groups that are thought to affect immigration policy: unions, nativists and anti-tax groups, cosmopolitans and humanitarians, immigrants themselves, and firms.

Unions

Unions have been the main interest group representing the average native worker. As immigrants may affect wages, and at least are thought to do so, unions have for the most part been opposed to immigration (Briggs, 1984, 2001). When unions gain strength, then, immigration policy is likely to be restricted. However, unions have long been divided on immigration because, while they represent native workers, they often represent immigrant workers as well (Avci & McDonald, 2002; Briggs, 1984, 2001; Fine & Tichenor, 2009). When unions represent immigrants, or want to represent them, they have to take into account that foreign-born members of the union may want immigration to remain open in hopes of reuniting with family and friends or because open immigration policies make them more secure. Additionally, an anti-immigration stance can turn off foreign-born members and potential members, making it harder to organize. This difference can be seen most clearly in the stances taken by the American Federation of Labor (AFL) and the Congress of Industrial Organizations (CIO) in the early 20th century. The AFL was an older union that represented native, craft labor, organized by skill, whereas the CIO was a newer union that sought to organize all workers in a given industry, regardless of skill. As such, the CIO sought greater membership from foreign-born workers, who tended to work the lesser skilled positions that were not included in the AFL’s craft unions (Briggs, 2001; Fine & Tichenor, 2009). Because the CIO represented many more foreign-born workers than the AFL, it took a much more pro-immigration stance than the AFL, which took a very anti-immigrant position (Briggs, 2001; Fine & Tichenor, 2009). These differences in unions’ preferences over immigration continue today, with some unions opposing immigration to a great degree and others, like the Service Employees International Union and some unions in Europe, supporting immigration in order to organize new immigrant workers (Avci & McDonald, 2002).

Nativists and Tax Payers

Nativists and taxpayers have not been as well represented by interest groups as the interests of workers have been through unions. While there have been some nativist groups in the United States and elsewhere—the Veterans of Foreign Wars, Daughters of the American Revolution, and other patriotic organizations historically tended to represent nativist sentiment, and groups like NumbersUSA have done so more recently—nativist sentiment has often been organized in countries with proportional representation systems, which allow for more than two parties, in far right political parties, such as Le Pen’s National Front in France and Wilders’s Party for Freedom (PVV) in the Netherlands. There is a large literature on these parties (see Golder [2016] for a recent review of the literature); for the study of immigration, what is likely most important is whether and how far right parties matter for policymaking (Givens & Luedtke, 2005). Schain (2006) argues that while far right parties seldom control government, they can influence the agenda and force traditional parties, usually those on the right but also on the left, to move their policies on immigration, including on border entry, closer to the far right’s ideal point. Givens and Luedtke (2005), in contrast, suggest that partisanship matters more for policies on the rights given to immigrants than for policies on the entry of immigrants.

Cosmopolitans and Humanitarians

Cosmopolitans and humanitarians have received less attention in the literature than most other groups, largely because they are thought to be a relatively small interest group on immigration. Cosmopolitan and humanitarian groups seek to open immigration because they like the diversity brought by immigration or because they view immigration as a solution to problems like persecution, violence, and poverty. They likely have had more impact on the admission of refugees and asylum seekers than on immigration policy in general. For example, according to Senate lobbying reports from the 1940s, several church groups and other humanitarian organizations lobbied for open immigration.

Immigrants’ Groups

Immigrants themselves often organize into important interest groups, especially in democracies that have less restrictive naturalization laws. In democracies, immigrants often have the ability to naturalize and thus are seen as a potential source of new voters; in some states, they can even vote in local elections before they become citizens. In contrast, most autocracies prevent immigrants from organizing and even deport them if they do organize.

In democracies, immigrants’ potential as voters often gives them, even immigrants who have not yet naturalized, a voice in politics (Tichenor, 2002).1 While immigrants typically do not make up a majority of voters, because of their geographic concentration they can often make up an important plurality of the electorate. In Goldin’s (1994) study of roll call votes on immigration in the early 20th century, she finds that large immigrant populations provided a bulwark against rising anti-immigrant sentiment in the U.S. House of Representatives. Milner and Tingley (2015) find similar results in their study of more recent roll call votes in the U.S. House of Representatives. Further, it is clear from the 2008 and 2012 presidential elections in the United States that Latino voters have helped turn some U.S. states from red (Republican dominated) to purple (swing states), at least in presidential elections.

Yet, political parties, even those on the left, are not as free to organize immigrants as voters as proponents of this argument suggest. Dancygier (2013) shows that left parties have to balance their desire to get votes from immigrant groups with concerns about alienating traditional working-class supporters. The native working class may oppose greater representation for and appeals to immigrants for two reasons: first, they may compete with immigrants for scarce social welfare resources, especially for things like public housing, and second, they tend to be less educated, and education leads to greater cosmopolitanism (Dancygier, 2013). Dancygier argues that left parties, then, can only appeal to immigrants to a greater extent when economic times are good, negating concerns over competition for scarce resources, or in areas with few migrants who do not threaten natives’ political power much.

Firms

Finally, we come to what has often been seen as the most powerful interest group on immigration—firms. Firms are generally thought to be pro-immigration (see Freeman [1995], for example) because immigration can lower their wage bill. If immigrants are substitutes for native labor, immigrants directly lowers wages by increasing the number of workers in the country. If immigrants are complements to native labor, they allow natives’ labor to be used more productively by substituting cheaper immigrant labor for expensive native labor for tasks that require less skill (Peters, 2017). Firms, then, are thought to lobby on their own or organize into larger trade associations to push for open immigration.

While the scholarship on interest group activity on immigration is not as developed as that on public opinion, there have been a few recent studies that examine how much lobbying interest groups do on immigration and how this affects policy outcomes. Facchini, Mayda, and Mishra (2011) examine whether lobbying by firms and labor unions affects the distribution of temporary worker visas in the United States. They find that industries that lobby on immigration more are granted more temporary visas while industries with greater unionization rates, which proxies for union lobbying against more open immigration, are granted fewer visas.

Peters (2014, 2015, 2017) argues that firms’ incentive to lobby on immigration has changed over time due to increased trade openness and a greater ability to move production overseas. Firms that use much low-skill labor have been the major proponents of greater openness to immigrants. Immigration helps lower their costs, making them more competitive at home and abroad. However, increased international competition due to low trade barriers and greater economic development in the developing world led many of these firms in wealthy countries to close. The ability to move overseas gave these firms another option when faced with international competition: if they could not beat the competition, they would join them. Finally, productivity increases allowed those firms that remained behind to do more with fewer workers. Together, these changes in the international economy sapped the support of these firms for immigration at home, allowed anti-immigrant groups to have more voice, and led to greater restrictions on immigration.

Peters (2017) uses new data on which groups testify before the U.S. Congress on immigration or lobby Congress or the executive branch on immigration to examine how interest group lobbying has changed over time. Consistent with her argument, she finds that business lobbying on immigration has declined over time with greater trade openness, the increased ability to move production overseas, and increased productivity. She also finds while organized labor unions have continued to lobby on immigration, their influence on policy has declined, as measured by how often they testify before Congress. Left-leaning and humanitarian groups have suffered a similar fate as unions; they had more influence earlier in the 20th century. They also, consistent with the previous discussion, have been more active during periods when Congress has been debating asylum and refugee policy. Groups that represent the interests of immigrants themselves, which tend to be for more open borders, have also been more active; although, their influence has waned as the Republican Party has gained control of Congress. Finally, it does not appear that right-leaning groups have grown in size, as we might expect as U.S. immigration policy has gotten more restrictive; instead, they have been a constant force in politics, one whose influence has increased as business groups have ceased lobbying. Thus, while there are many interested groups active in lobbying on immigration, at least in the United States, their activity and influence has varied over time.

Immigration Policymaking

While the emerging literature on lobbying on immigration has shown that interest groups, including unions, nativists, immigrants’ and other pro-immigration groups, and firms, affect immigration policy, interest group support does not always neatly translate into immigration policy. Political institutions are likely to play a role in aggregating the preferences of interest groups, the mass public, and policymakers as well as determine what types of constraints policymakers face.

Before discussing what affects immigration policy, we must define what we mean by immigration policy. Immigration policy can be thought of in a few ways. Some authors, like Ruhs (2013) distinguish between border entry policies—those policies that define who can enter the state—and immigrant rights policies—those policies that define what rights and duties immigrants receive after entering the state. Immigrant rights policies often include citizenship policies as well but sometimes refer only to the rights given to non-permanent immigrants. The final dimension of immigration policy is enforcement; without enforcement, a policy that seems restrictive might in reality be very open, as it allows many people to live and work in a state without authorization. Following Peters (2015, 2017), border entry policies, immigrant rights, and border enforcement are included as elements of immigration policy.

Immigration Policy in Democracies

Early work on immigration policy in democracies focused on the type of costs and benefits that immigration produces and how these costs and benefits structure policymaking. Freeman (1995) builds on Wilson’s (1980) framework. In Wilson’s (1980) framework, policy areas that have concentrated benefits and diffuse costs tend to be marked by client politics, in which those who receive the benefits are often able to sway policy to their side as those who bear the costs tend to be unorganized; areas with concentrated benefits and costs tend to be marked by interest group politics, as both sides have an incentive to fight over policy; areas with diffuse costs and benefits are marked by majoritarian politics, in which the majority gets their say; and, finally, areas with diffuse benefits but concentrated costs are marked by entrepreneurial politics in which the groups that face the costs seek to foist them on other members of society. Freeman (1995) argues that as the benefits of immigration are relatively concentrated in firms that use immigrant labor, in firms that benefit from increased population and travel, and in the immigrants themselves, while the costs are quite diffuse, immigration policy is marked by client politics. Yet, while there is convergence in immigration policy based on client politics, he argues that it is moderated by states’ immigrant histories: settler states of the New World have an identity as immigrant states and so tend to be more open than northwestern European states that tend to have a more ethnic identity or southern European states that have only recently become states of immigration rather than emigration.

Other scholars have built on this framework. Givens and Luedtke (2005) use Freeman’s model as a starting point but argue that issue salience—how often immigration is mentioned in the newspaper—plays a large role in immigration policymaking. They argue that in moments of high salience, the average voter becomes much more focused on immigration and more likely to hold the policymaker accountable. Immigration politics becomes more majoritarian because of this attention and thus, should become more restrictive.

Other features of democracies are likely to affect the importance of mass opinion on the policymaker and the constraints he or she faces when crafting immigration policy. Timmer and Williamson (1998) focus on the size of the franchise as an important factor. Examining the rising restrictions in immigration policies in the early 20th century, they argue that economic costs of immigration, especially the rise in inequality associated with immigration, was the main driver of the increased restrictions. While firms still wanted open immigration, they argue that the increased size of the franchise, which made policymakers more accountable to poor citizens, led to increased restrictions on immigration. Hatton and Williamson (2008) build on this model and argue that the increased size of the franchise along with the development of the welfare state has led to increased restrictions on immigration over the 20th century.

Money (1997, 1999) focuses on a different feature of democratic politics, namely, how votes translate into power in the legislature and the executive branch. In all democracies, voters are placed into districts, and some of these districts, the swing districts, have greater political power. The costs and benefits of immigration tend to be geographically concentrated; thus, when the costs increase, they tend to affect some geographic areas and not others. If these areas are not swing districts, they are likely to be ignored, leading to little change in policy. However, when swing districts become more anti-immigration, immigration policy is likely to become restricted. Hopkins (2011), in contrast, argues that the national climate is more likely to translate down to the local area than the other way around. When immigration is more salient nationally, it resonates with people in high immigration (in total numbers or changing share) localities more. This suggests that the relationship between the local and the national context may be more complicated than previously thought. Further, it suggests that we need better theories of when the issue of immigration becomes more salient nationally.

Finally, scholars have focused on non-electoral institutions as a source of immigration policy. Importantly, the courts may affect immigration policy through their rule- and law-making power. Joppke (1998) argues that the courts in Europe have created new residence and family reunification rights for immigrants, which has made immigration policy more open than the public or policymakers would like. Similarly, Hollifield (1992) has argued that the courts have played a role in both Europe and the United States in keeping immigration relatively open.

Immigration Policy in Democracies and Autocracies

While theorists have examined how immigration policy is formed in democracies, relatively few have examined how it is formed in autocracies and whether this differs from democracies. Yet, we tend to think that there are important differences between policymaking in democracies and autocracies. Most important, autocratic leaders are not accountable to the same extent to the general population or interest groups as democratic leaders are. This lack of accountability may cause autocratic leaders to place more weight on interest groups. Autocratic leaders are not subject to the same constraints as democratic leaders either. They do not need to answer to the courts nor do they need to provide the same rights to all groups. Mirilovic (2010) and Breunig, Cao, and Luedtke (2012) argue that these factors give autocracies an advantage over democracies in attracting immigrants. Autocracies do not have to give immigrants rights nor answer to anti-immigrant publics, which allows them to open their doors to immigration to a greater extent. Mirilovic (2010) also argues that elites may receive rents from taxing immigration. Yet, Ruhs (2013) notes a similar trade-off between openness and migrant rights in democracies, suggesting this difference is more a difference in degree than in kind.

Shin (2017) too suggests that the difference between autocracies and democracies may be in degree rather than kind. He argues that there is great variation in immigration policy among autocracies—not all are open to immigration to the same extent—instead, some autocracies face similar constraints to democracies. In resource rich autocracies, autocratic leaders can use redistribution to stay in power. These high levels of redistribution—for example in Saudi Arabia or the other countries of the Gulf Cooperative Council—creates disincentives to work on the part of natives. Autocrats in these states, then, can open immigration to provide a cheap and pliable workforce for employers that does not compete with natives. In resource poor states, autocratic leaders maintain power by providing economic growth and jobs for their citizens. Immigrants, then, serve as competition in the labor market, threatening the leaders’ grip on power. Thus, in resource poor states, immigration policy is likely to be restricted for much the same reasons as it in democracies.

Political institutions, thus, play an important role in moderating the effect of mass opinion on immigration policy. In democracies, the fact that immigration is not salient at all times may mean that immigration policy can follow client politics when attention is low but not when it is high. Changes in the franchise or other developments that make mass opinion more important may result in more restrictive immigration policies. Other institutions, especially the courts, can influence policy as well. Finally, regime type matters, but probably not as much as earlier scholars thought. Just as in other areas of international relations, scholars like Shin (2017) find that autocratic policymakers often behave like democratic policymakers based on their desire to stay in office.

Connections between Immigration Policy and Other Foreign Policies

In addition to political institutions, immigration policy is likely to influence and to be influenced by other areas of foreign policy, especially foreign economic policy. Milner and Tingley (2015) argue that immigration is one foreign policy tool among many that the president can deploy but that it is more highly constrained by domestic politics—for example, pro-immigration businesses and immigrants themselves against an anti-immigration public—than some other areas like the use of the military or sanctions.

Other authors have tied immigration to security and defense policy as well. Both Meyers (2000) and Mirilovic (2010) argue that immigration can have significant security externalities. On the positive side, immigration increases economic growth, which provides more resources for the military; it increases the population and, thus, potential troop strength, and it can help populate areas that are sparsely populated, ensuring that the state maintains control over these areas (Mirilovic, 2010). On the negative side, immigrants have long been seen as “fifth columns” and are thought to be a security threat (Meyers, 2000). The importance of immigration for defense was likely greater in previous ages. Between the rise of the mass army under Napoleon and the end of the mass army in the 1970s, immigration for troop strength was likely an important reason to keep immigration open. For example, France adopted a more open immigration policy and changed its citizenship policy in the late 19th century to counteract low birth rates and declining numerical strength in comparison to Prussia/Germany (Weil, 2008). Similarly, Canada sought to increase immigration to the Canadian west in the late 19th century to ensure control over its territory (Mirilovic, 2010). Both of these reasons for immigration, however, have less importance today as modern militaries can project power with fewer personnel. Instead, concerns over immigrants as security threats have increased in recent years with the rise of terrorism from groups like Al Qaeda and the Islamic State. While there is little to link immigration to terrorist acts by these groups, the fact that second-generation immigrants have often been the perpetrators of these attacks has led to calls to stop immigration from the Middle East or of Muslims in both Europe and the United States.

Immigration policy also connects to trade and capital policy. As discussed, Peters (2014, 2015, 2017) shows that immigration policy is inextricably linked to trade and capital policy. Open trade leads to the closure of firms that would support open immigration at home, and open capital policies allow these same firms to move overseas, taking their capital to labor instead of the other way around. Shin (2015) argues that a similar logic works in resources rich countries. During resource booms, the non-tradable sector increases in size while the tradable sector often shrinks; this process is even more acute if the state also opens its border to trade. As tradable firms are often a major employer of immigrant labor, a smaller tradable sector opens space for anti-immigrant groups in the policymaking process and leads to more restrictions.

While Peters (2014, 2015, 2017) and Shin (2015) show how trade and capital policy can affect immigration policy, immigration policy also affects trade and investment flows. More open immigration policies and the concomitant increase in immigration flows can lead to more trade through two mechanisms: preferences for home goods and increased information needed to trade (Dunlevy, 2006; Dunlevy & Hutchinson, 1999; Felbermayr & Jung, 2009; Felbermayr & Toubal, 2012; Gould, 1994; Hatzigeorgiou, 2010; Head & Ries, 1998; Herander & Saavedra, 2005; Rauch & Trindade, 2002). Migrants may have preferences for goods that are only produced at home, which increase trade between the receiving and sending state. This effect decreases as the migrant network grows, as they may find other sources for these goods in the receiving country, produce these goods in the source country themselves, or lose their taste for them (Dunlevy & Hutchinson, 1999). Immigration also helps overcome informational asymmetries that can make trade less likely. Trade requires information about arbitrage opportunities, language, preferences in both the home and host country, business contacts, business norms and practices, and the legal framework as well as trust. Migrants can help transmit this information from the receiving country to the sending country, making trade more likely, especially in situations where enforcement of contracts is likely to be weak or where more knowledge about goods is needed (Dunlevy, 2006; Rauch & Trindade, 2002).

Immigration may increase investment as well for similar reasons. Leblang (2010) argues that immigrants bring knowledge of market opportunities for trade or investment to firms. Migration may increase familiarity in the receiving country about the type of work ethic, quality of labor, and business culture that exist in the home country, increasing the desirability of investment (Leblang, 2010). Migrants can also mitigate the risk involved in these contracts through their ties with specific trustworthy individuals back home or in the receiving country or reduce the perceived risk by familiarizing citizens in the receiving country with the sending country more generally. These effects might be especially important for forms of investment—like foreign direct investment or venture capital—that are more risky (Leblang, 2010).2

Finally, immigration can increase foreign aid from the immigrant receiving country to the sending country. Immigrants may lobby their representatives in the receiving country for more aid for their home country. Alternatively, the receiving country may provide more aid to the sending country in hopes of preventing further flows of immigrants (Bermeo & Leblang, 2015). Together, then, it is clear that immigration is much more linked to other aspects of globalization and foreign policy than was previously thought.

Conclusion

While immigration was long neglected in International Political Economy, it is quickly becoming an important part of the field. With this new attention to immigration, the literature has come to some conclusions about immigration. From the public opinion literature, we know that those with more education tend to favor immigration more than those with lower levels of education and that the public supports immigration of the highly skilled more than those with few skills, although debates still rage as to why this is. From the interest group literature, we know that interest groups lobby governments, both democratic and autocratic, on immigration. The literature on immigration policy tells us that interest groups matter but so too do institutions. Finally, new literature on the connection between immigration and other policies shows that it is intimately connected with these other policy domains.

There are still many questions yet to be answered. In the realm of public opinion, how does public opinion on immigration form and how does it change? From Goldstein and Peters (2014) we know it can change due to large economic shocks, but what about other types of shocks? Will the migrant crisis in Europe significantly change opinions on immigration? For whom and how long will the effects last? Additionally, can politicians or others change the framing around immigration? While it is clear in U.S. survey data that the mention of unauthorized status can cause respondents to negatively view immigration (Peters & Tahk, 2011), it is not clear what else may move opinion. Can elites frame immigration in a way that makes people more or less opposed to it? Answering these questions may shed additional light on the determinants of public opinion on immigration.

Similarly, we know that nativism can have a significant effect on immigration policy, but it does not always have an effect. When does nativism become more salient and more powerful? When does it gain greater traction in the political world? For nativism to affect policy does there need to be political entrepreneurs to push it onto the agenda or can it affect politics organically?

Third, while there is a literature on the trade-off between border entry policies and migrant rights (see Ruhs, 2013, for example), there has been less work on the determinants of border enforcement. Is border enforcement simply political theater? What are the interest group politics around different types of enforcement procedures? When do unions and employers come together and when do they oppose each other on enforcement?

Finally, how will increasing fears of terrorism affect immigration policy? Security concerns, as noted, once led to increased openness to immigration. Now, it appears that security concerns are leading to increased restrictions. Will these policies last or will we see a return to earlier policies once the fear of terrorism subsides? How will it interact with the need to provide a home for millions of refugees who are likely to be displaced long term?

Recent world events, including the Syrian refugee crisis, have spurred increased interest in the politics of immigration. Scholars are increasingly creating new sources of data on public opinion and on interest group lobbying to gain a better understanding of how opinion on immigration is formed and how it affects policy. Due to data sources like Peters’s (2015, 2017) low-skill immigration policy index, the IMPIC dataset (Helbling, Bjerre, Römer, & Zobel, 2016), the DEMIG dataset (de Haas, Natter, & Vezzoli, 2015), and others, scholars are now able to better test existing theories of immigration policy development and develop new ones. With this increased data, it will be possible to examine many more questions on immigration in the future.

Further Reading

On the Reasons for Migration

Abramitzky, R., Boustan, L. P., & Eriksson, K. (2013). Have the poor always been less likely to migrate? Evidence from inheritance practices during the Age of Mass Migration. Journal of Development Economics, 102, 2–14.Find this resource:

Fitzgerald, J., Leblang, D. A., & Teets, J. (2014). Defying the law of gravity: The political economy of international migration. World Politics, 66(3), 406–445.Find this resource:

Massey, D. S., Arango, J., Hugo, G., Kouaouci, A., Pellegrino, A., & Taylor, J. E. (1993). Theories of international migration: A review and appraisal. Population and Development Review, 19(3), 431–466.Find this resource:

On the Labor Market and Fiscal Effect of Immigration

Card, D. (2009). How immigration affects U.S. cities. In R. P. Inman (Ed.), Making cities work: Prospects and policies for urban America (pp. 158–200). Princeton, NJ: Princeton University Press.Find this resource:

Hatton, T. J., & Williamson, J. G. (1994). Migration and the international labor market, 1850–1939. London: Routledge.Find this resource:

Zavodny, M. (1997). Welfare and the locational choices of new immigrants. Economic Review–Federal Reserve Bank of Dallas, 2, 2–10.Find this resource:

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Notes:

(1.) There is a large literature on immigrant integration and political behavior; see, for example, Barreto and Muñoz (2003), Bird, Saalfeld, and Wüst (2010), Givens and Maxwell (2012), Michon and Vermeulen (2013), Pantoja, Ramirez, and Segura (2001), and Wong, Ramakrishnan, Lee, and Junn (2011).

(2.) Foreign direct investment and venture capital are more risky because the investment is sunk into a company or physical plant that is hard to move out of a country in a time of crisis. To contrast, portfolio investment—investments in stocks or bonds—can easily be sold in a time of crisis.