About two years ago the United States passed the Immigration Reform and Control Act, also called the “Simpson-Rodino” bill of 1986. The Act called for increased enforcement of migration policy, employer sanctions, and amnesty for those who could prove continuous residence since 1982. Despite considerable discussion and debate prior to the act, the legislation was passed without any comprehensive economic analysis of its potential impact on the United States or its main source of undocumented immigration, Mexico. In this paper we shall look at some implications of the recent immigration law for both economies, given their widely differing levels of income and productivity, the challenges each faces to restructure its economy given increased international competitiveness, and the particular problems and opportunities presented by a common border with growing labor market interdependence. By our calculations, the economic opportunity cost of Simpson-Rodino as compared to continuation of the prior status quo will add up to a present value of $110 billion between now and the year 2000. In fact, Simpson-Rodino illustrates the important role that labor mobility may play in the convergence of income and productivity between rich and poor countries. It shows how migration policy may distort or delay that process of convergence, with negative implications for both societies.
The Political Economy of Immigration Law: Impact of Simpson-Rodino on the United States and Mexico
