Leah Boustan - What Immigration Tells Us About Economic Opportunity

Immigration is not just a story about immigrants, but also the children they raise, the cities they move to, and the knowledge and skills that get carried across borders. My guest today is Leah Bustan, professor at Yale and co-author of Streets of Gold, one of the best and most important books ever written on immigration and intergenerational mobility. Here's our talk. Hello, welcome to The Economics of Work. I'm excited to welcome Leah Bustan, professor at Yale and author of one of my favorite economics books of all time, Streets of Gold, co-authored with Ron Abraminsky. Leah, welcome to the show. Thanks so much for having me. So I want to talk about mobility, because I think of what you did as like directly about immigration, but like also kind of about mobility, right? Is that like the way to think about it?

Yeah, I think it's partially about social mobility as well. And the role of moving between places as immigrants or internal migrants in generating social mobility.

Let's say we had an intergenerational mobility coefficient for the world. So just like, I don't know if anyone's really done this. Maybe they have. But if you had some like mobility index, how much of that do you think can be explained approximately? Like how much of that do you think is explained by people moving between countries rather than mobility within countries?

Well, moving between countries is just an enormous part. And I think people often forget about that when they are trying to understand immigrants in their own country. So,

you know,

as Americans, we're looking around and imagining our immigrants at the bottom of the distribution. Are they moving towards the middle? What's going on with their kids? But we forget the piece that starts before immigrants arrive here. you know, as they're moving from their home country to the US. And historically, many of our immigrants came from Europe. And I'm talking about, you know, 100 years ago, Ellis Island period. And at that time, the GDP per capita ratio between our sending countries and the US as a destination was around two to one in favor of the US, you know, so you could maybe double your income on average by moving to the US. But now, If we're thinking about our typical sending countries, you're thinking about immigration today, the ratio is more like six to one, depending on which country we're talking about. And so there's the potential for, you know, tripling, quadrupling income when moving from the home country to the U.S. And that piece is just enormous in terms of upward mobility.

What do you think explains that transition of, you know, sending countries being on average poor? I mean, is that just like the rich countries just like growing faster than the poor countries or like globalization at large? Like, what do you think is the mechanism that explains that?

Well, some of it is the democratization of immigration, you know, so if you

go back

years, there were some very poor places that were just so poor that they couldn't even raise enough capital to buy a ticket on a boat to get to the US. And if they arrived in the US, they would not have had any kind of network from the home country to be able to plug into and