Putting the Power of Policy In the Hands of the Public
Geoffrey Garrett
Dean at University of Southern California - Marshall School of Business
Last week's Democratic National Convention, like the Republican National Convention the week before, was largely political theater—more infomercial than thought leadership. The problem with all the theater is that it crowds out, if not shuts down, any attempt at reasoned analysis of the big issues in this election.
Take the example of undocumented migrants: what to do about unauthorized immigration is one of the most incendiary issues in the presidential election. Donald Trump proposes deporting them all, and wants to build a wall at the Mexican border. Hillary Clinton is increasingly focusing on a comprehensive pathway to legalization.
There are 11+ million people living in the U.S. who either came here without a visa or have stayed after their visas expired. Most of the adults in this group work, and many of the kids go to school. Many families pay taxes, even though they don’t get the benefits residents receive.
Using our newly launched Penn Wharton Budget Model, which gets under the hood on big issues, we found that legalizing unauthorized immigrants (consistent with Clinton’s position) would actually have very little impact on jobs or employment. But if we increase deportations by just 10% per year, by 2020 U.S. employment will drop by nearly 2 million people and GDP will plummet by $200 billion.
The reasoning behind our analysis of deportation is straightforward. Undocumented migrants are already extensively integrated into the economy, so legalizing them wouldn’t have much impact on the economy. Over the very long run, employment would actually decline, because undocumented migrants would be able to find jobs that better match their skills. Conversely, there would be a significant cost to large-scale deportations because many undocumented migrants today work and, if they are deported, there will be fewer workers contributing to economic growth.
If you don’t believe me on the economy and undocumented immigration, you don’t have to take me on faith. I invite you to run different policy simulations yourself using our Budget Model. You can also look into other aspects of immigration policy, including the economics of high skilled worker migration.
In creating the Penn Wharton Budget Model, our goal is not to make policy recommendations, or to judge whose proposals are better or worse. Our goal is to say “if you do a, b, and c, the facts tell us you should expect x, y, and z to happen.”
We kept three core tenets in mind to make our work more useful, relevant and easy to understand:
- Focus on the big issues: We have analyzed immigration and social security, and plan to launch an analysis of tax reform in the fall;
- Estimate impact on the big outcomes: We focus on the impact of different policy choices on the federal budget, economic growth, and jobs and employment;
- Empower users: you don’t need to be an econometrician to use our model – just slide dials on our web interface to see different outcomes. We have done the hard work using cloud computing to anticipate the literally thousands of different data runs (stochastic simulations) on national individual and household-level data.
In an upside down world where Democrats are the party of security and the status quo and Republicans are the party of change and anti-globalization, it is more important than ever to anchor the political debate in authoritative analysis of the big issues.
Geoffrey Garrett is Dean, Reliance Professor of Management and Private Enterprise, and Professor of Management at the Wharton School of the University of Pennsylvania. Follow Geoff on Twitter.
President at Logistics 50 International
8 年By saying "Undocumented migrants" your political views come blaring out. People who break the law are not undocumented. They are illegal. If students showed up and walked into Wharton classes demanding an education would they be undocumented students and you would honor their requests? If people break into your house and sit down at the dinner table and demand food are they undocumented house guests. It is a sad day when you place the survival of the country and its rule of law aside in the supposed interest of economic gain by keeping illegals integrated in the economy. When a mafia boss offers to pay the prosecution anything they want so he can stay out of jail, would you support allowing that since the mafia boss will clearly stimulate the economy through his purchasing of fine wine, cars, homes while out of jail but can't do that while in jail. To put all our values behind economic ones gets you to the point where Europe is now. Blaming the uneducated masses, Brexit and other issues for economic woes misses where the blame should really go. On folks who think they can sit in academia and turn dials to perfectly predict the results of choices. Given your background which includes apparently no private sector productive jobs, other than thinking about a lot of ideas, it makes sense that the real world is so distant from your world view as to render your opinions meaningless. How sad that a fine school like Wharton ends up being nothing more than a haven for a political scientist without a business background. It's a business school, if you want to espouse your political views cross Locust Walk and join another school.
Senior Acquisition and Program Management Analyst
8 年The problem with algorithms is you can make the results what you want. Change the weighting on certain parameters and the results can change drastically. Something else, I'm not sure we realize is that immigration is only one subject of debate in this election.
Distinguished Solution Architect Verizon
8 年Interesting article. The concept of universal voting appeals more and more. Where citizens vote and decide on the issues facing our nation directly. It changes the dynamics of the world we live in greatly!