Freakonomics Radio - 580. The True Story of America’s Supremely Messed-Up Immigration System

Episode Date: March 14, 2024

How did a nation of immigrants come to hate immigration? We start at the beginning, sort through the evidence, and explain why your grandfather was lying about Ellis Island. (Part one of a three-part series.) SOURCES:Leah Boustan, professor of economics at Princeton University.Zeke Hernandez, professor at the Wharton School at the University of Pennsylvania.Roger Nam, professor of Hebrew Bible at Emory University. RESOURCES:The Truth About Immigration: Why Successful Societies Welcome Newcomers, by Zeke Hernandez (2024, available for pre-order)."The Refugee Advantage: English-Language Attainment in the Early Twentieth Century," by Ran Abramitzky, Leah Platt Boustan, Peter Catron, Dylan Connor, and Rob Voigt (NBER Working Paper, 2023).Streets of Gold: America's Untold Story of Immigrant Success, by Leah Boustan and Ran Abramitzky (2022)."If Liberals Won't Enforce Borders, Fascists Will," by David Frum (The Atlantic, 2019). EXTRAS:"Is Migration a Basic Human Right?" by Freakonomics Radio (2015)."Who Are the Most Successful Immigrants in the World?" by Freakonomics Radio (2013).

Today, let's start with a quiz. First, I want you to think about the current global population, everyone who is alive today. That's roughly 8 billion people in just under 200 countries. Of all those people in all those countries, what percent do you think live in a country other than the country where they were born? Yes, this is a question about migration and immigration. And I know that immigration is a subject that has many people flipping out, but I don't want you to flip out. At least not yet.

You will have opportunities later on. So that's the question. What percentage of the global population today are migrants? All right, you have your answer. Did you say 30%? Did you say 30%? Did you say 20%, 10? Here's the actual answer, 3.6%. If that number seems shockingly low to you

as it did to me when I first saw this number, there is a good chance that you are an American because nearly 14% of the American population was born elsewhere. Think about that. Someone living in the U.S. is nearly four times more likely than the global average to have left their home country. There are a few countries with an even higher percentage of immigrants, Canada, Germany, Australia, Saudi Arabia.

But in terms of absolute numbers, the U.S. is destination number one by a long shot. Roughly 50 million people living in the U.S. were born elsewhere. It was John F. Kennedy who began calling the U.S. a nation of immigrants. But what does that actually mean? What are the consequences, the costs and benefits of being the ocean that so many rivers compete to flow into? To answer those questions, let's start with one of those immigrants. This is Zeke Hernandez. So I'm the son of two wonderful parents who grew up very poor. My dad was born in a small town in Uruguay. His mother was

completely illiterate. When my father was a teenager, his father died of lung cancer. My mother was born in a farming community a couple hours away from that town, also very poor. They sort of lived off what they could grow in the land. She went to a little schoolhouse that educated kids in the very basics of reading, writing, and arithmetic. And there wasn't much prospect beyond that. That's how everyone had grown up for generations. What was, I think, unique about her is that she really loved books and did well in school. And a teacher encouraged her to keep going with her education. So she went to her parents who said, no way, education is for rich people because furthering education for a kid like her meant that the family had to move to the nearest city. There was no secondary school around.

Anyway, after months of insisting, my grandparents agreed to let her go live on her own in the nearest town when she was 12 years old. So she finished high school and became an elementary school teacher. My parents actually were both elementary school teachers. They got paid very little. I don't have memories of this, but my mother has told me some stories of, you know, there not being quite enough food all the time. When I was very young, my father kind of, and he'll say this, I'm not saying anything you wouldn't, he bumbled his way through life in the early years. Our family's life changed quite a bit about the time that I was born. My father got a job working for the church that our family went to, the Church of Jesus Christ of Latter-day

Saints. It was just an office job. He's keeping financial records, and he got a few promotions. He started going to night school to get a college degree. And then when I was four years old, a big opportunity arose to go on an expatriate assignment to Costa Rica. So we spent eight years in Costa Rica, Guatemala, and Argentina. Nobody makes a lot of money working for a church, but the one perk is that as an expatriate, the job paid for a private school where teaching was done in English. And so I speak this language because of that opportunity. If your father had not taken that job, the odds of you still being in Uruguay would be what? 99%. I mean, yeah, it totally changed everything. Z. Hernandez is today a professor at the Wharton School at the University of Pennsylvania. He's

also written his first book to be published in June. It is called The Truth About Immigration. It is a book full of research and facts. At a moment when every conversation about immigration seems to coalesce around emotion or politics, we thought it might be nice to bring some facts to the table. And this moment is an odd one. Most Americans want immigration reform

that would include better security and a shot at citizenship even for immigrants who came here illegally. Many politicians, meanwhile, take a less nuanced view. They're poisoning the blood of our country. That's what they've done. We cannot allow buses

with people needing our help to arrive without warning at any hour of day and night. It seems as if our nation of immigrants has come to hate immigration. This puts us in a precarious position. If liberals insist that only fascists enforce borders, the journalist David Frum writes, then voters will hire fascists to do the job liberals refuse to do. How did we get here? And where's this going? Today on Freakonomics Radio, the first episode in a series we are calling the true story of America's supremely messed up immigration system. That starts now. This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.

In the beginning, we met Zeke Hernandez, who is about to publish an eye-opening book about immigration. We will get back to Hernandez soon enough. But if you want to read a really wild book about immigration, you might start with the Bible. Almost everything in the Hebrew Bible has some touchpoint with migration. And that is? My name is Roger Naum. I'm professor of Hebrew Bible at Emory University. In this series, we want to cover immigration from A to Z. We started with a Z, Z Crenandes, so let's go back to an A. Genesis is actually a migration story about one family, Abraham. And the first introduction in

Genesis 12 is for him to go and to leave Babylon and travel to the place where the Lord will show you. And you get from Genesis 12 through 50, all these narratives about basically three generations, Abraham, Jacob, and Joseph traveling into this strange and foreign land. Traveling into a strange and foreign land would become a quintessential and constant mode of Jewish history. Many generations after Abraham, several thousand Jews were living and worshiping in Jerusalem, the Jewish capital. But then in 587 BCE. In 587, the Babylonians came, they destroyed the Temple of Jerusalem, they plundered the contents, and they took the people and forced them,

and they forced migration back to Babylon. Now, when it comes to migration, diaspora, economics, etc., how reliable would you consider information in the Hebrew Bible? Not terribly reliable, but sometimes reliable. It's mixed. The Bible is so ideological, it's so theological, but sometimes the non-ideological stuff, that has less chance to be redacted and edited. And so some of that can be reliable.

But besides the Bible, there are many other documents that have survived from this era. The ones in Mesopotamia are written in Akkadian. In places like Egypt, they're written either in Middle Egyptian hieroglyphs, or on papyri, they're written in Coptic and Aramaic. And how is your Akkadian in Coptic and Aramaic and Middle Egyptian? My Akkadian, it's pretty good for a biblical scholar. Akkadian is really, really hard.

There are hundreds and hundreds of signs. They're all multivalent, meaning every sign means like 20 different things. My Aramaic is pretty good as well. Coptic is a little bit later, so I do not know Coptic, and I never regrettably studied Middle Egyptian. Roger Nam told us about some documents that he has studied from the 6th and 5th centuries BCE

called the Al-Yahudu tablets. Al-Yahudu literally means city of Judeans. And these are a bunch of economic documents about life in the city of Judeans. These are exiles taken from Jerusalem and placed deliberately somewhere, probably in central Iraq. And this documents their economic life there. Things like promissory notes, loans, sales contracts, receipts, distributions. You have a few legal texts as well.

And so it's a really nice archive to try to put together what their basic economic life was like. And what was their economic life like? So we know of certain groups that surely flourish. Even within one generation, you had people that eventually got hereditary land. The idea is as soon as they got there, they were given some sort of responsibility over a land. And after one generation, the sons would be able to inherit that land and they can make more crop way beyond what they owe to the crown. And there were other ways in which these immigrant Judeans assimilated into Babylonian culture. And we know that because of religious practices from their names. In America, there's not a lot of meaning ascribed to names, but in the ancient world, these names are tremendously important.

In the biblical text, you get something like Isaiah, which means Yah, the divine name, saves, or something like that. And so, we begin to see Babylonian deities attached to these Judeans. So, names that are kind of like myself. I am Korean American, but my name is Roger. It's not a very Korean-sounding name, but it is a strategy of assimilation. So, we see a lot of these families really begin to assimilate into Babylonian culture. This is despite the fact that they were taken there essentially as slaves, correct? Right. And so the biblical text, you know, there is a famous Psalm 137, by the rivers of Babylon, there we sat down and there we wept when we remembered Zion.

The biblical text tends to portray the exile as a horrible, horrible event. And it was, on many accounts, religiously losing the temple, losing the Davidic dynasty. But the Al-Yahudu tablets, this archive kind of points to a different picture, that there was economic flourishing in the migration. But as Roger Nam points out, Babylonia wasn't the only place where Judeans were living in exile. Another group lived in Egypt on an island in the Nile called El Phantine.

There's another fantastic archive called the El Phantine Papyri. They reference Jerusalem. They have the Hebrew word for priest. In this Aramaic document, they talk about the Sabbath. They talk about the Passover, the Feast of Unleavened Bread. And how did these Judeans do economically?

Did they thrive like some of their fellow exiles in Babylonia? These archives tend to show it was a pretty hard existence for them. It was a very multicultural area as a military garrison and outpost. We know that they had great discord with other ethnicities living with them. There are fights with the Egyptians. There's complaints about different religious practices. We knew that there was a temple to Yah, the divine god of the Israelites, right there. And right next to them was the temple to Num, the Egyptian god.

And at one point, the Egyptians destroyed the Judean temple. We know that they kept Judean names, names like Jedaniah, Hananiah. They kind of sound like biblical names, right? We also know that they wrote to Jerusalem. And Jerusalem, we can assume from the letters, had some sort of religious authority over these Judeans. And they had their own priests to conduct sacrifices. assumed from the letters, had some sort of religious authority over these Judeans, and they had their own priests to conduct sacrifices. And so there's a certain holding on to their cultural heritage, even though their migration

was very possibly much earlier than the ones in Babylonia. So you've told us two immigration stories, two diaspora stories with similar populations living under different governments in different destinations. What can we generalize? What's to be learned from this experience overall as it might relate to modern-day immigration? Well, in comparing the biblical world to modern-day immigration, I hesitate a little bit because it's so anachronistic. At the same time, I think there's a certain universalism in the human experience. Throughout human history, people have migrated. People have uprooted and settled for various reasons. And in that migration, I think there are certain challenges that are parallel to the present-day experience in antiquity. And one is there's always a balance between assimilation and preservation. And that balance often can be influenced by your economic success. My mom and dad came

in the 1960s. And that generation of East Asian immigrants, our parents were very adamant, our kids are going to learn English well. They're going to take on American names, they're going to succeed in school, they're going to go to American universities, and they're going to assimilate. That is a very deliberate, intentional strategy with economic repercussions. And I think that balance between assimilation and preservation back in the ancient world and today is closely correlated to economic prosperity. So, Roger Nam's takeaway is that economic prosperity goes hand in hand with assimilation. You can see why that might make sense. If an immigrant group doesn't assimilate,

at least to some degree, they may not be able to integrate into the economic life of the host country. But when Nam described the different experiences of the Judeans in Babylonia versus the Judeans in Egypt, I took away a different moral of the story. When it comes to immigration, the details matter a lot. The status that immigrants are given, both legal and social, the economic opportunities made available to them or withheld from them. These can be the difference between prosperity and desperation or even death. I was born in the U.S. When I was a kid, I had no idea how fortunate that was.

When I was in my 20s, I started writing a history of my family. This is a poor Jewish family. I went to Poland to see where my father's father lived before he came to the U.S. in his 20s. This is a small city north of Warsaw called Płtusk. I also wanted to learn what I could about his family that had stayed there, his parents, siblings, cousins, whoever. Within the first day or two of my visit, here's what I learned. It appeared they had all been killed by the Nazis in September of 1939, right there in the place they lived. They were among the first Jews murdered during the war. As you're standing there taking in this news, of course, you grieve and maybe you rage, but you may also think about luck. That's what I found myself thinking,

how lucky I was to be a descendant of the Dubner from Poltusk who left the place and made it to America. A few other family members did make it out, some to Argentina, some to Israel. For all of them, and for me, immigration was a lifesaver, a life giver. In the U.S. and elsewhere, generations would be born. In Poland, you can't even find the bones of the dead ones. The United States, for most of its relatively brief history, has been the top destination for immigrants because it offers an abundance of both social freedom and economic opportunity. And the benefits go both ways. Immigrants are 80% more likely to start a business in the U.S. than a person born here. One economic analysis finds that immigrant STEM

workers were responsible for between 30 and 50 percent of our aggregate productivity growth between 1990 and 2010. Remember, about 14 percent of our population is foreign-born. According to those productivity numbers, immigrants are punching way above their weight by a factor of at least two or three. But there are problems. The big one is that there are simply way more people who want to come to the U.S. than the U.S. wants. According to Gallup polling, 160 million people worldwide say they would like to permanently move to the U.S. The U.S. offers permanent residence to about 1 million people per year, with another 3 million admitted under temporary worker policies. Of those 1 million new permanent residents,

about 60% are related to a current citizen. Around 25% are admitted under employment-based preferences. And the rest are a mix of refugees, asylum seekers, and winners of a diversity lottery. In any country, a million new residents a year would be a lot. But again, there are 160 million people who say they'd like to come here. And when supply outstrips demand by that much, you are going to get some chaos. It's estimated that 20 or 25 percent of all immigrants to the U.S., around 10 million people, are here without proper documentation or permission. This huge stream of illegal immigration and chaos at the southern border are what drive the political debate. 69% of Republicans want to decrease immigration.

Only 17% of Democrats do. Meanwhile, 83% of Democrats say that immigrants strengthen the U.S. Only 38% of Republicans do. How do all these Democrats and Republicans form such starkly opposing views? My guess is they don't spend much time digging into the data. So let's do that together, you and me. After the break, what the immigration numbers say, what they don't say, and what they can't say. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. Whenever we explore a particularly complicated topic on this show, we tend to lean on economists. We will get to the economist soon.

But first, let's go back to Zeke Hernandez to talk about his book, The Truth About Immigration. Hernandez is not an economist, although he is economist adjacent. His Ph.D. from the University of Minnesota is in strategic management and organization. I study how movement affects businesses and the economy, particularly the movement of people, but also the movement of companies overseas, the movement of capital, of ideas. And after nearly 20 years of studying this, I've had to come up with entire new paradigms of what the economy is. Entire new paradigms of what the economy is? Don't economists already have that covered?

I hope that I don't insult anyone here. They tend to have a very narrow focus. Hernandez argues that economists tend to think of the economy as a fairly technical construct, as do most people. They'll think of like money, the stock market, inflation, you know, Fed speak. But they won't say, well, the economy is people, right? People exchanging with each other and the movement of people and where they move and how they interact with each other is the economy. In other words, a central part of the economy is migration. In my world of business schools, when I

started becoming interested in the relationship between the movement of people and the movement of companies or their investments across the world, a lot of people in my field balked at the idea. They thought, why are you studying this? This isn't a business issue. This belongs in a policy school or immigration is a social issue. So go study sociology. But he didn't go study sociology. Remember, Hernandez grew up in South and Central America without much money. But thanks to his father's job with the Mormon church, he got a good education in English. After high school, he did a church mission in Argentina.

The two years I was there between 1999 and 2001 were the lead up to the country's worst economic crash in history, which if you know anything about Argentina, that's saying a lot because it's a country that has legendary economic dysfunction. And so those two years, I saw firsthand on the street what unemployment really means, what hunger means, what suffering really means. And that was very moving. I don't know how you couldn't be moved by that. It really ignited this passion for not just helping people, but also understanding why, like what creates economic prosperity and growth. And so that really moved me. But it relates to my immigration story because when I finished that mission, I had this dilemma or this big decision to make. I had a scholarship

to study in the United States. This was at Brigham Young University, yes? Brigham Young University. So I had a lot of American friends. And one of them, without any malicious intention, like he was supportive of me, but he said, you know, Zeke, that you're going to steal a scholarship, a job, and probably a girl from a deserving American, right? And I wasn't offended because in my mental model of immigration at the time, I kind of thought, well, immigration is probably good for those who migrate, but maybe it harms people. Maybe it is a zero-sum game. And so I really did worry about, was I taking someone else's slot? I didn't have an intention of migrating permanently to the U.S., but I also worried about leaving my country and my people behind and not contributing

my own skills and talents to helping. And so it was kind of a microcosm of all the debates we have now publicly about immigration. And what happened? Well, a lot of different things. I met my wife, who's American. We started a family. Opportunities came up. But over time, my own intellectual journey about what immigration means, whether it's morally right, how it contributes to the U.S. economy, how it contributes to the sending economy, I started learning all the things that I talk about in the book. And so my moral qualms have disappeared based on evidence. To what degree, though, has your personal story perhaps influenced your research? I'm not suggesting that the research that you present in this book is biased, but persuade us that it is

as unbiased as this type of research can be considering your own background. I think it's a very fair question, and anyone should ask me that question. And the honest answer is very little to nothing. And here's why. I had no interest in studying immigration. It's not that I thought I'm going to be an immigration scholar and try to make sense of this life decision I made. I saw an opportunity to stay in the U.S. and go to graduate school because I wanted to study that question I started asking in Argentina, what creates economic prosperity? That was it. And I had this hunch that the movement of businesses and capital around the world, cross-border investment, had something to do with that. As I tried to follow the evidence and be as rigorous and dispassionate as possible, I realized that the movement of business and capital is inseparable

from the movement of people. You cannot understand one without understanding the other. And so I almost reluctantly thought, okay, I can't ignore this variable called immigration. And that became the start of nearly 20 years now of slowly understanding how immigration kind of seeps into all parts of the economy. But the question wasn't, are immigrants good? Or I really want to prove that immigrants are good. The other way I'd answer the question is, the vast majority of the research I'm citing in the book isn't my own. It's research done by other people. The research in Hernandez's book tells the long and rather volatile history of American immigration. The history of U.S. immigration really is a roller coaster.

At the moment of founding, the U.S. had no immigration restrictions. Anybody could come. Was there any kind of registration upon arriving even? Not that I know of. The records, at least reliable records, started about 1850. That's about when we start having good census data that tracks birthplace. But I think that also reflects the mindset. It just kind of wasn't a thing, right?

You just came. They came from many places for many reasons. But when we look back at our immigration history, a lot of the stories we tell ourselves are more like myths. The biggest myth that we have today, and I think this myth is really widely shared, left and right of the spectrum, is this nostalgic view that immigrants who came to the U.S. from Europe

a hundred years ago were able to succeed economically very quickly. That is Leah Bustan. And I'm a professor of economics at Princeton. I told you we'd get to the economists. And why does Bustan think that instant success myth is the biggest myth about immigration? Well, I think that the family stories do get compressed. They're sort of like an accordionization of your family story. Because if you really start

asking questions, and I'm fourth generation, so I ask my parents, well, was it the immigrant generation that succeeded or was it the kids of immigrants who succeeded? They say, oh, well, you're right. The immigrants themselves really didn't learn English. They really didn't change their occupation, and they worked in low paid occupations throughout their life. You're right. It was the child generation that were able to start working in offices, that were able to start finishing high school, and even go to city college. But that piece gets missing sometimes. It's so far in the past that the first generation and the second generation almost become as one. They become fused. Bustan and her frequent collaborator Ron Abramitsky recently published a book called Streets of Gold, America's Untold

Story of Immigrant Success. We chose the title of the book, the basis of a famous quotation that's painted on the walls at the Ellis Island Museum. The quotation is attributed to an unnamed Italian immigrant who said, I came to America because I heard the streets were paved with gold. But when I got here, I found out three things. One, the streets were not paved with gold. Two, they weren't paved at all. And three, I was expected to pave them. Okay, where did the notion come from? I'm really curious to know what you can tell us about how the idea of America and immigration to America was presented to immigrants from Europe during that time. Well, what's true historically is that by moving to the U.S., you could double your earnings. And what's true today is that by moving to the U.S., you can more than double your earnings.

You can increase your earnings by 300 or 400 percent. And so when successful immigrants came back to the home country, both in the past and today, they often arrived with bling. You know, they were wearing a gold watch, they had gold necklaces, and they were successful in the eyes of their countrymen who had not moved. And that became a compelling reason to try to move to the U.S. Bustan and Abramitsky dove into the data to explore what economists call intergenerational mobility. So our goal in doing this was to understand how quickly immigrants and their children move up once they get to the U.S. And we're particularly interested in children of immigrants versus children of U.S.-born parents

who are being raised in similar economic circumstances. Do the children of immigrants catch up or get ahead? And we were comparing the past to today. As you're doing this, you mentioned what you were looking for. What were you expecting to find? Honestly, my expectation was that the children of immigrants today would not be doing as well as the children of immigrants from Europe 100 years ago. I've just heard so many success stories about, you know, Italians, Jews, Irish, Germans. I just thought there's no way that we're going to find something comparable today. So give me in as brief or as long as you need a conclusion, essentially, which is how on average do the children of immigrants to children whose parents are U.S. born,

we find that the children of immigrants are moving faster up the economic ranks by the time they get to adulthood. So if you take households that are similar and have the same level of financial resources when the children are young. And then you can go ahead 20 or 30 years and trace out how the kids are doing. The children of immigrant families are doing better on average. And it's not only coming from those usual suspects, for example, children of Asian parents. It's coming really across the board from children whose parents came from countries all over the world, including very poor countries and countries from Central America that are very much in the news today as contributing to the crisis at the southern border. So that really surprised us.

And we then went to compare the success of children of immigrants today to children of immigrants in the past. And what we found is that the rate of success is almost identical today as it was in the past. That does not mean that the underlying causes of success are the same, but at least in terms of outcomes, we have a lot to be really proud of in terms of how immigrant families are incorporating and assimilating into the U.S. economy. Okay, next question's really easy. I mean, easy to ask. I don't know how to answer it, but why? Why would the children of immigrants in this country do better than the children of native-born? Well, historically, I have a really well-documented answer for you. For the modern data, it's a little bit harder. Let me explain what I mean. So historically, the data we put together

comes from the census, and we built the data ourselves. So we have all the information you could possibly gather about these households. And what we learned is that the number one cause of success for the children of immigrants is where their parents chose to settle. Immigrant families move to the labor markets that are booming and that are dynamic, and that provides a wide set of job opportunities for their children. So what that meant in the past, well, we were still a very agricultural economy in 1900. And immigrants were much less likely to move to rural and farm areas. They were more likely to move to cities. They avoided the U.S. South, which was a cotton-growing area and an area of very low upward mobility for both white and black Americans. And even within

the set of cities they could have chosen, they chose the cities that were really on the cutting edge of growing manufacturing, and those provided opportunities for their kids. Actually, the children of immigrants had fewer years of education than children of U.S. born, but yet they earned more. Education was not as central to the ability to make a living 100 years ago. What really mattered was, are you in a city that has a wide set of good manufacturing jobs? So that's your reasoned and empirical answer to the historical version. And now what's the best you can do for explaining? For the modern patterns, we're relying on very aggregated data that comes from the IRS, the tax records. And so they're very much under lock and key. So we don't have all the information like where are these families living, what are the education levels of the parents, and so on.

The best we can see is that from some survey evidence, it looks like immigrants are still moving to the more dynamic areas. So geography is still playing a role, but it's much smaller now than it was in the past. So that leaves a lot of scope for our more speculative explanations, like maybe immigrant parents value education more. Maybe they're spending more time with their kids on educational investments. We are hoping that we're going to get access to some data that will allow us to answer this better. But really at the moment, we're in the hypothesis generating phase. So all of the potential explanations that your listeners may come up with, we'd be curious to hear because we hope that we're going

to be getting access to data through the Census Bureau soon to really be able to answer this. Well, let's talk about some of those potential explanations. What about, let's say, religiosity? I've read that the typical immigrant to the U.S. is more religiously observant than the typical native-born. I'm curious if you think that may help explain this phenomenon at all. I think it might. I think you're right that immigrant families report more regular church attendance, and it's possible that that may help build strong social capital, strong communities, and that might have an effect on kids. What about the notion that immigrants tend to bond with other immigrants wherever they settle and form a kind of large extended family that has gone out of fashion among native-born Americans? I think that it depends on the level of income and level of human capital in that extended family.

For some groups, that can be incredibly beneficial. If your family has relatively low-earning parents, but you are embedded in a wider community that has a wider range of occupations and income, that can really help children through what economists think of as ethnic capital. Another argument we hear is that the kind of person who immigrates is just not typical, that they've got more drive or grit or zeal than average. What do you make of that argument to explain, you know, accomplishment for the next generation here? It's quite interesting because in the modern period, immigrants from almost every country in the world to the U.S. are more educated and come from wealthier backgrounds than the typical person

in their home country. So in that sense, economists call those immigrants positively selected. Historically, that's actually not true. Historically, the Statue of Liberty actually got it right that immigrants from Europe were the tired, poor, huddled masses. They tended to either be from the low end of the socioeconomic spectrum or just average for their home country. So when we see children of immigrants getting ahead 100 years ago, it's probably not because of positive selection. But for today, that certainly could be the case. When we see an immigrant group that has, from a U.S. perspective, low education levels on average, like let's say we say, oh, geez, a lot of those immigrants only went to 10th grade or 11th grade. That actually can be a quite high level of education in the home country and might be

indicative of a whole set of family advantages or personal advantages that that immigrant is carrying with him. We'll be right back after a break. Also, Leah Bustan wanted to hear your theories about why even today the children of immigrants do better economically than the children of parents who were born in the U.S.? Send your ideas to radio at Freakonomics.com, and we will pass them along. I am Stephen Dubner. This is Freakonomics Radio. Please stay right where you are. Before the break, the Princeton economist Leah Bustan told us that the children of immigrants have better economic outcomes than the children of parents born in the U.S. This is true today, and it was true 100 years ago. So it is fair to conclude that the U.S. has some foundational properties that help immigrants

succeed. One interesting piece of evidence in this direction comes not from people who move here to join family or for work, but people who enter the country as refugees. The U.S. government defines a refugee as someone who demonstrates that they were persecuted or fear persecution due to race, religion, nationality, political opinion, or membership in a particular social group. Here again is Bustan. Refugees to the U.S. do incredibly well. They start out in the first year or two less likely to be employed or less

likely to have high earnings compared to other immigrants. But within five, six years, they've caught up to other immigrants and they've even surpassed other immigrants on some of those economic metrics. The success of refugees is actually not a worldwide phenomenon. Refugees are not as successful as other immigrants in Canada, and they're very much not as successful as other immigrants in Europe. There's something that the U.S. is doing right in terms of being able to quickly incorporate and assimilate a relatively challenging population that does not arrive with as much education as an economic immigrant would. Can you point to any specific things that we are,

as you said, doing right? Well, this is really just speculation for me at the moment, but I think that other countries are going wrong in refugee policy by trying to do too much for refugees, by holding refugees apart and saying, for the first 18 months or two years, I don't want you to work. I want you to spend your time learning the home language. So taking citizenship classes and taking language classes so that you can successfully join the economy. In the U.S., that kind of incorporation does not happen through government assistance, but happens through the local ethnic community. So what I worry about is holding refugees or asylum seekers apart from the economy as a whole and saying you can't get a work permit until your case is done

or you can't get a work permit until you've learned English. Actually, ethnic communities do a very good job at helping out newcomers. As part of their research, Bustan Abramitsky and three co-authors spent time with an oral history archive put together by the Ellis Island Foundation. It included immigrants who had come from Europe between 1893 and 1957. They were asked why they had left Europe. And they explained whether they were leaving because they were fleeing from violence or facing political persecution, or if they were simply excited to join an uncle who had a shop in the U.S. So, you know, was it an economic move or a move that looks more like a refugee today? Lustan wanted to compare those two groups.

For instance, did one group learn to speak English better than the other? To measure this, Bustan had college students listen to the oral histories and rate the English fluency of the immigrants. And what we found is that refugees did speak in a more complex way. They used more complex vocabulary and more complex sentence structure. And why might a refugee develop better English skills than a different kind of immigrant? If you know you're not going home, then you have a strong incentive to learn English and to find a job and to incorporate as fast as you can.

A hundred years ago, around a third of immigrants from Europe went back to Europe. Oftentimes they were in the U.S. short term in order to save up money, go home, buy land, and get married. If that's your plan, you may not have a strong incentive to learn English. You might be able to earn money quickly without speaking English while you're holding a manual job. And then your plans might change and you end up meeting someone here, you stay here, but you've already lost some valuable time in terms of getting assimilated and learning the language. Whereas refugees know from the very get-go that they don't have a safe home to return

to and that might encourage a different level of investment in their own skills. There are other ways to measure assimilation. What you name your children, for instance, or even what you call yourself. Roger Nam brought this up earlier when he talked about the Judeans living in Babylonia versus the Judeans living in Egypt. In America, there is a widespread and long-held belief that the U.S. government itself liked to change the names of immigrants. You may have heard this from your own grandparent or great-grandparent that when they came to Ellis Island, the customs official took their long and hard-to-pronounce name and turned it into something more American.

So that is entirely untrue. In fact, in my own family, we had the same family story. Our name was Platnitsky. And then we come to Ellis Island and it gets changed to Platt. I went back into the census records and I couldn't find my great grandparents. I could only find them 10 years later, and indeed, their last name was Platt. So I thought to myself, well, let me check under Platt and Nitschke, and indeed, there they were. So I went to my dad, and I said, well, what's this story about Ellis

Island that you told me? And he said, oh, you know, it wasn't really Ellis Island. What really happened is that our family got together in Chicago. We had a large family. It was over 100 people. And we just tried to decide on what our new name should be. And this is after we'd been in the country for at least 7, 8, 12 years, depending on the person. And we decided on Platt. But we couldn't agree. Should it be Platt with an E at the end or Platt without an E at the end? And so there's actually two branches. Well, where did this story about Ellis Island come from? He said, well, that's just, you know, what you say, like the shorthand for saying that as part of the process of coming to America, we changed our name. We just say Ellis Island.

First of all, explain the infrastructure at Ellis Island that makes it very unlikely that some custom or immigration officer there might have just decided to shorten a long ethnic sounding name. I mean, the U.S. officials at Ellis Island went on the basis of the shipping records, and the shipping records were filled out on the European side. And so no one would filled out on the European side. And so no one would have changed their name at that point. It was simply a matter of processing the new arrivals. And there was no infrastructure.

There were no forms in place to assign names. Can you walk me through, like in the case of a family like yours, what would you say were the major motivations behind the name change at that point? I honestly don't know what the motivations were. I can only speculate that my family, much like other families, thought to themselves that having a long and complicated name might be a liability in terms of finding a job. Interestingly, in some of the work that we've done, we've looked at brothers who are given differently foreign names. Now, of course, they have the same last name, but one may have the name Vito, and then three

or four years later, their brother John is born. Now, does Vito have a harder time on the labor market? And it turns out that no. If you have a more ethnic, more foreign-sounding first name, and you compare brothers who were born and raised in the same family, there is no penalty in terms of having a foreign name. So, Bustan has produced a lot of economic evidence showing that immigration is really good for immigrants. By association and by a reading of American history,

you would conclude that immigration has been really good for the U.S. too. But that is not a consensus view today. And how about in the past? Well, when you were talking about U.S. immigration, there are multiple pasts. Remember what Zeke Hernandez told us earlier. The history of U.S. immigration really is a roller coaster. At the moment of founding, he said.

At the moment of founding, the U.S. had no immigration restrictions. But let's move forward into the 19th century. So starting in 1890, the countries of origin changed. All of a sudden, instead of Western and Northern Europeans, you started to get Southern and Eastern Europeans. So this is Italians, Greeks, Poles, Ukrainians, you know, a lot of Jews and Catholics instead of Protestant English speakers or German Lutherans.

And this, there's no other way to put it, completely freaked out the establishment. And it wasn't subtle. It wasn't behind closed curtains. Senators like Henry Cabot Lodge from Massachusetts wrote scathing, scathing articles talking about how these Southern Eastern Europeans were inferior. They commissioned in 1907 the Dillingham Commission, which was a multi-year study that purported to prove that these immigrants were economically, socially, mentally, psychologically inferior, that they were unpatriotic, that they couldn't assimilate because of their different religion, language, etc. years. Starting out in 1917, when for the first time, the U.S. added a literacy requirement for entry. And around a third of immigrants at the time were illiterate. And so they would be ruled out by such a piece of legislation. And then World War I happened. And that also added to the freakout in that these elites also became afraid that these immigrants, some of whom were from the countries the U.S. fought against, were just not going to assimilate, that there was a national security threat.

And Congress actually tried to close the border four times before they were successful. They were successful in 1921 over a presidential veto, which means they had a supermajority. And so that led to the most pivotal legislation in American immigration history, which was the 1924 National Origins Act. So the National Origins Act said the following. First, it banned all immigration from Asia, all of it. So the quota for Asia was zero. And then it said, we're going to go back to the 1890 census and establish that from any European country, no more than 2% of residents from each country of origin as of the 1890 census can enter the US in any given year. Now, why go all the way back to 1890? Because by then, very few Southern and Eastern Europeans had come. And so it was a

totally racist way to keep out people that were Jewish, Catholic, etc. What was the decline like? How steep was the decline in a very rapid moment. In the 1920s, immigrants were about 15% of the population. By 1970, it was 4.7%. That is massive, right? That's where the roller coaster like roared down. You know, Hitler, by the way, loved the National Origins Act. I bet. He praised it.

Now, according to your book and your theories of the economic and social power of immigrants generally, one would think that that massive decline in immigration over those few decades, let's call it from the mid-20s until the 1970s, would have hurt the country a lot in terms of economic dynamism, innovation, and so on. Did it? It did. It did. For example, there's a study that showed that American inventors, so this is not foreign, American inventors became nearly 70% less productive. American businesses patented over 53% less for decades because of the loss of, say, skilled immigrants and inventors from the southern and eastern European countries that didn't come. There's evidence showing that this didn't help native

workers in the labor market in any way. So you would have thought maybe their wages went up or they got more jobs. There was no effect on that. So there were a lot of losses. Now, of course, someone who knows American history is saying, wait a minute, like this coincided with the post-war boom and America's leadership in the world. But I think there's two things there. One is, you know, how much more could America have gained during those years with all this foreign born talent that was missing? But the other thing is the baby boom happened. And so the baby boom partly replaced the immigrants that were lost that would have come had it not been for the 1924 Quotas Act, but only partially. What was the fertility rate during the baby boom compared to now? So the birth rate in 1940 was 2.1%, which is exactly replacement.

It jumped to 3.6% by 1960, and then it went down to less than 2% by 1980. And where are we now? We're at 1.78%, so we're below replacement. And so this is a big issue because the baby boom kind of saved the country in lots of ways. Considering the evidence we've been hearing today, you have to wonder, at least I had to wonder, how exactly did so many people in this nation of immigrants come to hate immigration? Well, there are some good reasons. Coming up next time on part two of our series, how the Immigration and Nationality Act of 1965 changed everything. The economics,

the politics, the culture. And then later in the series, as the U.S. struggles with immigration, is Canada trying to steal our old playbook? Also, we are going to publish a bonus episode soon, an interview about immigration we did some years ago with Madeleine Albright. She was born in Prague and twice became a refugee in her youth. She went on to become U.S. Secretary of State under President Clinton, as well as U.S. Ambassador to the United Nations. Albright died in 2022 at age 84. You will hear that interview soon here on Freakonomics Radio, as well as the rest of our current series on immigration. Until then, take care of yourself and, if you can, someone else too.

Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app or at Freakonomics.com, where we also publish transcripts and show notes. This episode was produced by Alina Cullman and Zach Lipinski. Our staff also includes Augusta Chapman, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnston, Julie Kanfer, Lyric Bowditch, Morgan Levy, Neil Carruth, Rebecca Lee Douglas, and Sarah Lilly. Our theme song is Mr. Fortune by The Hitchhikers. All the other music is composed by Luis Guerra.

As always, thank you for listening. They get the job done, as Lin-Manuel Miranda likes to say. They get the job done. He was writing that from the office of Intel. The Freakonomics Radio Network. The hidden side of everything. Stitcher.