In The Political Economy of World Mass Migration (AEI Press, 2005), Jeffrey G. Williamson examines global immigration policy from 1820 to the present--a period he characterizes as the two “global centuries.” He specifically focuses on the political and economic causes and repercussions of immigration backlash.

Falling barriers to trade, labor flows, and capital markets characterized the period between 1820 and World War I, the first global century. This was followed by an inward-looking era--from 1914 to 1950--marked by economic isolationism and anti-global sentiments. Williamson observes that today--during the last half of the second global century--even though there has been renewed world integration in trade and capital markets, immigration policy in high-wage countries remains restrictive.

In the beginning of the twentieth century, the primary source of American immigration was Europe. Growing concern about the types of immigrants from southern and eastern Europe, however, sparked a series of restrictions aimed at stemming the tide of immigration from those areas.

Williamson points out that today our immigration is drawn from across the globe. Most of the immigrants from Asia and Africa are “high quality”--people with education and skills who are likely to find jobs and not become welfare-dependent. But one-quarter of our immigration is from Mexico, and there the skill gap is very low.

By “skill gap,” Williamson signifies the difference between the average skills in the country of origin and the skills of people who choose to immigrate. Williamson explains that usually, owing to a self-selection process, the people who immigrate tend to have greater ambition and more education than their fellows. The more difficult it is to immigrate, the wider this skill gap is likely to be. Distance of travel, opportunity, financial costs, and the size of networks of family and friends in the home country are among the factors contributing to immigration difficulty. For Mexico, the barriers to immigration are not high. Therefore the skill gap is the lowest. Western Europe faces the same situation with immigration from eastern Europe, the Balkans, and Turkey.

The skill gap concept is crucial to Williamson’s analysis of immigration policy during the second global century. Where the number of those immigrating with a low skill gap is high, in general, wages for the native unskilled population decline because of the resulting competition between the two groups. Thus, Williamson concludes, where wage levels are threatened by low-quality immigration, the end product in the modern era is restrictive immigration policy designed to protect wage levels.

Williamson also notes that while there was a general consensus by the mid-1990s “that the effects of immigration on [a] host country labor market are small,” the effects of immigration are best observed at the national level, where it “has different effects . . . on different . . . groups.” Though employers gain through lower wages, the overall effect on the economy appears to be neutral. The impact, however, falls disproportionately on people with lower skills. According to one study, immigration had no effect on the pay of non-immigrants with some college education, but reduced the average wage by 4.9 percent for college graduates, 2.6 percent for high school graduates, and 8.9 percent for high school dropouts.

Williamson concludes that the two global centuries show us that:

• The greater the perceived threat to the wages of the native unskilled workers from both lower and high quality immigrants, the more restrictive the immigration policy.
• Immigration policy seems to be influenced indirectly by conditions in the labor market and directly by immigration forces that, if left alone, would have an impact on labor market conditions.
• The switch to more restrictive immigration policies is a result of falling immigrant quality rather than from growing flows of immigrants or foreign-born workers.
• The United States is a clear policy leader, showing no evidence of responding to policies adopted elsewhere. Other immigrant-receiving countries are more sensitive to the policies of their competitors and of the United States.
• Poor labor market conditions and rising inequality play an important role in precipitating an immigration backlash.
• Immigration restrictions came late in the first global century--perhaps because unskilled workers did not have a political voice until late in the century.
• Mounting domestic pressures for restrictive immigration policies in the first global century were finally catalyzed into action by a dramatic “triggering event”: World War I. Will today’s growing pressures for immigration restrictions find their own comparably dramatic “triggering event”?

Jeffrey G. Williamson first delivered The Political Economy of World Class Migration: Comparing Two Global Centuries as the American Enterprise Institute’s 2004 Henry Wendt Lecture. Williamson is the Laird Bell Professor of Economics at Harvard University, where he is also a faculty fellow at the Center for International Development and a faculty associate at the Weatherhead Center for International Affairs.