Wednesday, April 16, 2014

Random observation about Ukraine

Random observations about Ukraine. 

I talked to a number of people both from the right and the left about events in Ukraine today.   These conversations made me remember how much I admired Scoop Jackson and Hubert Humphrey.  

Below are my thoughts.   

Observation 1:

The problem and the Russian motivation in Ukraine have more to do with corruption than geopolitics.   See the link below on this point.

Given this level of corruption I am not confident that western aid will be effective.  

Observation 2:   

Economic sanctions are a much more rational response to this situation than military action.   Moreover,  I suspect that neither Republican nor Democratic voters would support military action in Ukraine.   The case for a military response was much stronger in Syria than in Ukraine.   

(I suspect our inaction in Syria has emboldened Putin in Ukraine.   There is a need for more research on the Syrian decision.   Did Obama intentionally set up a situation where Congress would put the breaks on a Syrian intervention or did he miscalculate support in Congress?)

Observation 3:

The economic sanctions (penalties on people in Putin's inner circle) that have been put in place so far will have no effect.  

A more serious response would involve kicking Russia out of the WTO or bringing economic sanctions against Russia inside the WTO.  

Interestingly,  it is Russia that is now threatening to bring legal action against the United States over Crimea sanctions.

The Russians are basically asking an international organization to override U.S. policy similar to the way this organization forces changes to U.S. Laws on the environment, on gambling and on health. 

Had the WTO existed in the cold wars the Jackson-Vanik amendment would have been defeated.–Vanik_amendment

Most of official official Washington believes that trade agreements trump all other laws.   Does this belief hold water when a country is using its military to invade, coerce, and steal from its neighbors.   

Observation 4:

The Blame-America-First crowd argues that Putin is simply creating his own sphere of influences or his own Monroe doctrine.   BULLSHIT!!!!!!!!!!    

Some similarities exist but there are major differences between Putin's actions now and America's actions past and present.

In the past when the U.S. Intervened in Latin Americas there was substantial debate and discussion over the wisdom of this course of action.  In Putin's Russia there is no similar debate.

Today many Latin American Democracies vigorously oppose the United State.  Many of our Latin American neighbors have closer relations to Europe and to Asia than to the United States.   This is not the case for many of Russia's neighbors.   

See these recent news article on events in Venezuela and compare to Ukraine.

Concluding Thoughts:   The time for quiet negotiations urging Russian restraint has passed.  The Russians claim our Crimean sanctions are a violation of the WTO. In a sense they are correct.   Trade with Russia through the WTO or otherwise facilitates invasion, theft, and corruption.   It is time for President Obama to articulate and act on American not corporate values.   

Sunday, March 23, 2014

Impact of immigration on demographics and economics of the United States.

Issue: What are the potential demographic and economic impacts of increased immigration?

Short Answer:  The United States population is growing substantially faster then projected large because of high immigration.  The future population of the country will be much smaller if immigration is restricted.  The bulk of the empirical literature indicates that immigrants have a relatively small impact on wages and that the impact on wages is primarily at the lower end of the income distribution.  The fiscal simulations suggest that increased immigration will result in modest improvements in the long-term federal budget and in the Social Security balance.

Immigration and Population Growth: The CBO (2005) reports between 1994 and 2004 the foreign-born segment of the U.S. work force grew from 12.9 million workers to 21.4 million workers accounting for over half of the total growth in the U.S. workforce. This growth in the labor force may have been a factor impacting the substantial growth in the economy and the ability of the Federal Reserve Board to maintain a low-interest rates policy.   The level of future immigration is an important factor impacting long term economic projections.  The U.S. Census Department has three estimates of future population growth ranging from a low of 313.5 million people to a high of 552.8 million people by the year 2050.  Population growth directly impacts the dependency ratio a key factor impacting future productivity and fiscal conditions.

  • The percent of the population that is projected to be 65 years old or over in the year 2050 is 17.8% under the high-growth population scenario, 20.3% under the mid-growth population scenario and 22.7% for the low-growth population scenario.

The debate on the economic impacts of immigration have largely centered on impacts in labor markets and fiscal impacts. Both of these literatures have differentiated between economic impacts attributable from low-skilled and high-skilled workers.

The Labor Market Impacts:  Two papers Friedberg and Hunt (1995) and CBO (2005) review the literature on the impact of immigration on wages.  This literature suggests that the impact of immigration on native born citizens is weak.   The literature encompasses two approaches, studies that examine regional differences in immigration and wages and studies that examine the impact of immigration on national aggregates.  The literature incorporating information on regional differences in immigration patterns appears to find that immigration has very little impact on wages in local markets.  Some of the studies that used national data suggest that immigration lowers wages.  The most prominent paper of this type, Borjas (2003), concluded that a 10 percent increase in the supply of workers will decrease wages by 3 to 4 percent.

Borjas also presents separate estimates for the impact of immigration on wages for different educational groups.  These results reveal that the supply impacts of increases immigration only impact wages of less educated workers.  Other authors, notably Steelman and Weinberg, attribute the decline in wages at the lower end of the income distribution to technological changes, which have decreased the need for unskilled labor.

The Fiscal Impacts:  The CBO provides a short discussion of the potential long term fiscal impacts of increased immigration in their long term fiscal impact.  The CBO concludes that while a doubling in the current immigrant flow would only fill a small portion of the projected gap between governmental spending and revenues the increase in the immigration of skilled workers with college degrees could have a significant “positive” impact on federal state and local budgets.

Four recent studies in this literature employ inter-generational account methods to evaluate the long term fiscal impact of immigration.  These studies include Lee and Miller (2000), Auerbach and Oreopoulos  (1999),  Storesletten (2000, and Fehr, Jokisch, and Kotlikoff (2004).  The baseline projections from these studies suggest the likely impact of immigration on the long term fiscal balance will be small.   Auerbach and Oreopoulos, for instance, find higher immigration will likely reduce the long term fiscal balance by 10%.

All of the projections in this literature suggest an increase in the number of immigrants with high education levels would improve the fiscal balance of the United States especially for the federal level.  Storesletten estimates the net present value of future tax receipts for high-skilled, medium skilled and low-skilled immigrants are $96,000, $-2,000, and $-36,000 respectively.   These results lead Storesletten to conclude that fiscal balance could be restored by allowing increased immigration of high-skilled immigrants. 

The studies generally reveal that increased immigration of high-skilled workers will have a beneficial impact on the Social Security system.   As noted above, the Census projections for the future dependency ratio are substantially lower for the high population growth scenario.  One scenario, considered by Lee and Miller, found a combination of higher immigration and higher productivity could delay OASDI tax increases by eight years.  

Conclusions:  The evidence in the economics literature reveals strong benefits from the immigration of high-skilled workers.  Critics of immigration focus on the negative impact of immigration on wages, however, the empirical literature suggests the impact of immigration on wages is weak and confined to the lower end of the wage distribution.  Simulation studies suggest that increased immigration could result in modest improvements to the federal fiscal balance and for Social Security.



Auerbach, A.J., and Oreopoulos, P., “Analyzing the Fiscal Impact of U.S. Immigration,” The American Economic Review Papers and Proceedings, Vol. 89, No. 2, (May 1999), pp. 176-80. 

CBO, “The Role of Immigrants in U.S. Labor Markets,” November 2005.

Borjas, G.J., “The Labor Demand Curve is Downward Sloping: Re-Examining the Impact of Immigration on the Labor Market,” Quarterly Journal of Economics, November 2003.

Fehr, H., Jokisch, S., and Kotlikoff, L., “The Role of Immigration in Dealing with the Developed World’s Demographic Transition,” NBER Working Paper No. 10512, (May 2004).

Friedberg, R.M., and Hunt, J., “The Impact of Immigrants on Host Country Wages, Employment and Growth,”  Journal of Economic Perspectives, Vol. 9, No. 2, (Spring 1995) pp. 23-44.

Lee, R., and Miller, T., “Immigration, Social Security and Broader Fiscal Impacts,” The American Economic Review Papers and Proceedings, Vol. 90, No. 2, (May 2000), pp. 350-354.

Steelman, A.,  and Weinberg, J.A., “What’s Driving Wage Inequality?” Federal Reserve Bank of Richmond, Economic Quarterly, Vol 91, No. 3, (Summer 2005), pp. 1-17.

Storesletten, K., “Sustaining Fiscal Policy through Immigration,” Journal of Political Economy, Vol. 108, No. 2, Vol 108, No. 2, (April 2000), pp. 300-23.

Thursday, March 20, 2014

Some dated but relevant work on education, science, and immigration.

This work is somewhat dated but still relevant to ongoing policy discussions.

Summaries and discussion of some dated work on

 education and immigration

National Academies of Science, International Graduate Students and Postdoctoral Scholars in the United States, The National Academies Press, Washington D.C. 2005.

The National Academy of Science (2005) demonstrates that foreign-born graduate students, postdoctoral scholars, and scientists have had an important impact on U.S. scientific and technical research.  This report found:

  • In 1966, approximately 23% of science and engineering doctorates awarded by U.S. schools were given to foreign-born students.  In 2000, 39% of awarded doctorates in science and engineering fields were received by foreign-born students.
  • International students received close to 59% of all engineering doctorates in 2003.
  • The share of international S&E postdoctoral scholars rose from 37% in 1982 to 59% in 2002.
  • More than one-third of U.S. Noble laureates are foreign-born.
  • Nearly half the doctoral-level staff and 58% of the post-doctoral research and clinical fellows at the National Institute of Health are foreign nationals.
  • The foreign-born percent of scientific and engineering doctorate-level employees rose from 24% in 1990 to 38% in 2000.

Kuenzi J., Mathews C., and Mangan, B.F., “Science, Technology, Engineering and Mathematics (STEM) Education Issues and Legislative Options,” CRS Report for Congress, May 22, 2006.

This paper starts with an assessment of the performance of the U.S. education system (k-12) on math and science.  It provides results from a national U.S. proficiency test, results from tests administered to students in many countries, and data on the quality of U.S. teachers.

Test results presented here include results from the National Assessment of Education Progress (NAEP), the Trends in International Mathematics and Science Study (TIMSS) and the Program for International Student Assessment (PISA).   Some recent science and mathematics test results have improved.  However, many U.S. students are not proficient in science and mathematics and U.S. students continue to lag behind students from many other countries.

  • In 2005, 36% of 4th graders and 30% of 8th graders performed at the proficient or above level on the NAEP.  These figures are improvements over previous years.  In 2000, the most recent result for the NAEP for 12th graders, only 17% of students performed at the proficient or better level on the math assessment.

  • U.S. 4th and 8th graders realized improved scores and relative international rankings on the TIMSS science and math tests between 1995 and 2003.  In 2003, most U.S. TIMSS scores were near the median of OECD countries.

  • U.S. students scored below 23 of 29 countries on mathematics literacy and behind 19 of 29 countries on science literacy as measured by the PISA in 2003.

One factor potentially impacting student performance is teacher quality and education.   The report contains statistics on the percent of teachers who did not have a major in the course they were teaching.

  • Over half of middle-school mathematics teachers and 40% of middle-school science teachers did not major in their respective fields.  High school teachers were more likely to major in the field they were teaching.  An estimated 14.5% of high school mathematics teachers and 11.2% of high school science teachers did not major in their respective fields. 

The report contains information on the number of STEM degrees by type of degree along with some comparisons to other countries.  Many of the statistics presented in this report were initially published by the National Science Foundation

  • Around 16% of all college degrees conferred were in STEM fields.  STEM degrees accounted for 14.6% of associate degrees, 16.7% of baccalaureate degrees, 12.9% of Master’s degrees, and 34.8% of doctoral degrees.

  • Statistics from the NSF revealed a large portion of the doctoral degrees went to foreign students.  In particular over half of the doctoral degrees in engineering, approximately 44% of doctoral degrees in mathematics and computer science and 35% of degrees in the physical sciences went to foreign students.

  • The NSF found around 53% of foreign students who earned a doctorate in 1993 were still in this country in 1997 and that 61% of the 1998 cohort remained in the country in 2003.

  • The CRS report contains data originally published by the NSF that indicates the United States has one of the lowest ratios of STEM to non-STEM degree ratios in the world.  The statistics reveal that China has an especially high proportion of degrees conferred in scientific or engineering fields.  (However, this statistic is deceptive because engineering programs in China differ from engineering programs in the United States.) 

The CRS report contains information on existing federal programs designed to increase the number of individuals studying in STEM fields and/or improve the quality of STEM education.  Most of the statistics presented on this topic were originally published in a GAO report.

·      Around $2.8 billion dollars was appropriated by the federal government for programs to increase the number of students selecting STEM fields and/or improve the quality of STEM research.  This money was used to fund 207 different programs.

·      Around 71% of the money for the STEM education programs was allocated to the National Science Foundation (NSF) or the National Institute of Health (NIH).

The repot contains general descriptions of existing federal programs designed to stimulate STEM education.  Federal programs serve 11 target groups including different groups of students, postdoctoral scholars, different levels of teaching and institutions.  The CRS report contains information on the number of students serving each target group. The report does not contain information on dollars allocated to each target group or the relative amount of money spent on motivating research compared to motivating teaching.

A recent NAS report “Rising above the Gathering Storm” cited by the CRS, contains five goals for improved STEM education.  The goals listed in this report are:

  • Quadruple middle and high school math and science course taking by 2010,
  • Recruit 10,000 new math and science teachers per year,
  • Strengthen the skills of 250,0000 current math and science teachers,
  • Increase the number of STEM baccalaureate degrees awarded,
  • And support graduate and early-career research in STEM fields.

It may be appropriate to consider increased aid to community colleges because of increased enrollment in that sector.

The CRS paper describes several new bills designed to enhance STEM education.  These bills include:

  • S 2197 creating summer internships for middle school and high school students at national laboratories,
  • S 2197 also creates specialty schools for the mathematics and science,
  • S 2109 increase funding for science education through the NSF,
  • S 2198 provides grants to institutions for teaching certification, including grants at the master level,
  • H.R. 609 and S. 1615 expand and extend current loan forgiveness and interest rate relief for STEM teachers,
  • Create grants for professionals to teach mathematics and science
  • S 1614, H.R. 609, and S 2198 provide new scholarships for Baccalaureate programs.
  • S 2197 authorizes research grants for early-career scientists.

Summary & Conclusions:   This report documents shortcomings in the performance of U.S. STEM students and the teaching of STEM subjects.  The report also documents the large proportion of STEM graduates students in U.S. schools.  The report discusses existing federal programs to improve STEM education and proposals to expand these programs currently being considered by Congress. 

Wasem, R.E., “Immigration: Legislative Issues on Nonimmigrant Professional Specialty (H-1b) Workers, The Congressional Research Service, July 28, 2006.

This paper provides background on the H-1B immigration program leading up to a discussion of the current policy debate over the future of the program and the future of other forms of immigration for professionals.   Specific topics include an introduction to the H-1B program, an analysis of H-1B admissions, the legislative history and a discussion of issues before the 109th Congress. 

The H-1B program was created in 1952 with a ceiling of 65,000 people.  Over time, labor attestation requirements were added to the law in order to prevent H-1B workers from under-bidding U.S. citizens.  In 1998, the H-1B quota was temporarily raised to allow for an increased number of entrants.  The annual H-1B cap reached 195,000 applicants between 2000 and 2003.  The 107th Congress passed provisions allowing for extended stays by H-1B applicants.  Free trade agreements with Chile and Singapore passed by the 108th Congress reserved a share of H-1B quotas to these two countries.   The 108th Congress also provided an exemption for 20,000 applicants with a masters degree or higher.

The annual cap is currently at 65,000 applicants with a 20,000-person exemption for foreign students with advanced degrees from U.S. universities.

Data in this report reveals that the number of H-1B applications sometimes rose above the legal cap because of problems with the government’s reporting systems. 

The report documents that fees associated with the H-1B program have gradually increased over time.  In 2003, a $1,000 fee was attached to the program to fund DOL job training programs and NSF scholarships and grants.

The report contains a substantial amount of information on attributes of newly arriving H-1B workers.   The single largest category of H-1B workers is in the computer field.  Many H-1B workers also work in the Education and Medicine and Health fields.  Close to half of newly arriving H-1B workers have a Bachelor’s degree and nearly 30% of newly arriving applicants have a Master’s degree.
At this time there is a wide divergence between H-1B proposals in the Senate and H-1B proposals in the House.  The Senate proposals seek to increase the number of people who can get H-1B visas.  The House proposals seek to curb alleged abuse with the H-1B program.
The Senate Immigration Reform Act (S. 2611) increases the number of people who could obtain H-1B visas and broadens exemptions from the H-1B cap.   Specifics of the Senate bill include:

·      The annual cap on H-1B visas is increased from 65,000 to 115,000 people,
·      The cap is automatically increased by 20% each year after the cap is realized,
·      All applicants with an advanced degree from an accredited U.S. university are exempted from the cap, (The current exemption is 20,000 applicants.)
·      Create a 20,000 person exemption for foreign graduates with an advanced degree,
·      The exemption for “non-profit research” is broadened to include all “non-profit” groups,
·      The exemption for “governmental” organizations is modified to include “Federal, State, or Local” governmental research organizations.

The major House-passed immigration bill (H.R. 4437) does not revise the H-1B visa limits.  Proposed legislation n the House is geared towards protecting U.S. workers from layoff and unfair competition.  These proposals would make H-1B workers more costly to hire. Two bills H.R. 3322 (sponsored by Nancy Johnson and H.R. 4378 (Bill Pascrell) have these goals.   The major items in Congresswoman Johnson’s bill are:

  • Broaden layoff protections currently pertaining to H-1B dependent employers to cover all employers hiring H-1B employees,
  • Expand layoff protection from 90 days before and after the hiring of H-1B employees to 180 days.

Congressman Pascrell’s bill has the above two provisions and several others.  Additional items in H.R. 4378 include:

  • More rigid wage attestation procedures on H-1B applications,
  • Documentation of wages paid to H-1B workers,
  • Domestic recruitment efforts by H-1B employers,
  • A prohibition on the hiring of outsourced H-1B workers,
  • A reduction in the H-1B admissions period from six to three years,
  • The elimination of the current 20,000 person exemption for graduates with an advanced degree from U.S. schools,
  • A requirement for the Secretary of Labor to investigate fraud allegations and wage complaints associated with the H-1B program,
  • The creation of a private right of action for people who are potentially harmed by an employer’s violation of H-1B regulations.
A third H-1B bill in the House (H.R. 1325) repeals the H-1B immigration authority.

Summary & Conclusions: The H-1B quota is now at 65,000 applicants with a 20,000-person exemption for individuals with advanced degrees, substantially below previous peak levels.  There are now many more H-1B applicants than openings.  The 109th Congress is sharply divided over whether the H-1B quota should be increased.  

Readers of this post may also like this post on MIT admissions and foreign-born students.

Friday, February 28, 2014

Impact of immigration on U.S. student access to elite science graduate schools

I was looking over my somewhat dated file on immigration issues and reached the conclusion that many of the papers were still relevant.  One wonders whether the world is progressing or standing still.  My first post on immigration issues is on whether immigrants are reducing access by U.S. white males in elite science programs in the United States. 

My work relied on a small amount of MIT admissions data.   The one-word answer in this memo is No.  The one sentence answer is that there is no evidence that foreigner born individuals are crowding Americans out of elite science programs.

It would be useful to get more data both from other schools and over time to more completely model the determinants of the make-up of elite graduate science programs in the United States.  I would be interested in writing an academic article and/or a technical report on the topic.  Individuals who want to support this type of project should email me at or contact me through my linkedin page.

MIT Admissions and Immigration

Issues: There are substantial concerns about the increased reliance in the United States on foreign scientific, technical, engineering, and mathematics talent.  George Borjas expressed concern that U.S-born white-male applicants have been crowded out of the elite U.S. graduate schools.  Borjas writes:

“There is a strong negative correlation between increases in the number of foreign students enrolled at a particular university and the number of white-native men in that university’s graduate program.  This crowd-out effect is strongest at the most elite institutions.”

Does MIT admission data support the contention that U.S.-born white males have been crowded out of MIT graduate programs?

There is substantial concern that the U.S. education system is still leaving certain groups of students behind.  Does MIT admissions data support this contention?

Short Answer:  International students play a large role in MIT graduate programs and a relatively small role at the undergraduate level.  White Americans and Black Americans compose a relatively smaller share of the MIT undergraduate population compared to their share of the overall national population.  Asian-American students compose a much larger portion of the MIT undergraduate population than the general population.  The low share of white males in graduate programs at MIT may be attributable to their relatively low share in the undergraduate program at MIT and possible at other feeder schools to MIT graduate programs.  Immigration does not appear to explain the low level of white male graduate students at MIT.

Differentials in MIT admissions across groups appear consistent with differential in performance on the national math SAT across groups.  It is clear from MIT admissions and national SAT data that the performance of certain groups in scientific fields is lagging.  This data does not allow for an assessment of the U.S. educational system on access to scientific fields.
Some analysis:

  • International students compose slightly over 8% of the undergraduate student body and 37% of the graduate student body at MIT.

  • China, Korea, and India, send considerable numbers of students to MIT graduate programs but only a relatively few students to the undergraduate program.

  • Asian or Pacific Islanders are close to 28% of the MIT undergraduate student body.   According to Census figures republished in the statistical abstract approximately 4.3% of the general population is Asian or Pacific Islander.

  • White non-Hispanics people compose close to 35.2% of the MIT undergraduate student body compared to 66.8% of the general population.

  • Blacks or African Americans compose around 6.0% of the MIT undergraduate student body and around 12.8% of the general population.

  • Nearly 90% of MIT undergraduates have a Math SAT over 700.

  • The mean math SAT score of Asians, Asian-Americans, or Pacific Islander is 594.   By contrast, the mean math SAT score for Whites was 555.

Conclusions and Potential Implications:  This paper examined admissions data from one school and discussed some math SAT trends.    The evidence presented here may not be applicable to other institutions and cannot address many of the broader policy concerns.  However, these statistics do have implications towards Borjas’s crowding-out hypothesis.

Foreign students are a major factor at graduate level programs at MIT but are not a major factor at the undergraduate program. The alleged crowding out of white-male candidates at elite graduate programs like MIT may be a consequence of the relatively low admissions of whites to the undergraduate program. The relatively low admissions of whites and the relatively high admission of Asians to the MIT undergraduate program appears consistent with differentials in national math SAT scores.  The high concentration of foreign students in MIT graduate programs may also reflect a strong job market for U.S. citizens with strong scientific or technical skills and the entry of these candidates to other programs.   Immigration does not appear to be “crowding out” white domestic applicants from graduate programs at MIT.

Both black and white students are under-represented in the MIT undergraduate program relative to their share of the general population.  The under representation of these groups at MIT appears consistent with the performance of these groups on the math SAT.  A broader assessment of the impact of the education system on access to scientific and engineering fields is beyond the scope of this paper.

Table One:  Geographic Composition of MIT

U.S. Citizen
International as a % of total

Table Two:  More on the Geographic Diversity of MIT
China, P.R.C.
Korea, South
Germany, Federal Republic Of
United Kingdom

Table Three: Ethnic Composition MIT
Ethnic Group
Total Undergraduates
%  total
Nonresident aliens
Black, non-Hispanic
American Indian or Alaskan Native
Asian or Pacific Islander
White, non-Hispanic
Race/ethnicity unknown

Table Four:  SAT Scores MIT

SAT Verbal
SAT Math





Table Five: National Math SAT Results
by Ethnic Group


American Indian or Alaska Native
Asian, Asian American or Pacific Islander
Black or African American
Mexican or Mexican American
Puerto Rican
Other Hispanic, Latino or Latin American
No response
Average SAT scores for ethnic groups, 2006 College bound seniors.  Source is the College Board.