Does it matter where immigrants come from?

Not all groups are equal.

Written by Lipton Matthews.

Immigration advocates claim that foreigners make America richer, increase productivity and kickstart entrepreneurship. They churn out studies touting the benefits of immigration. But what do the facts say?

Some immigrants arrive with high levels of education; others arrive with less. Those with high levels of education tend to be successful. Yet for certain countries of origin, even less educated migrants get ahead – for example, by establishing small businesses. Some groups become so successful that they manage to corner the market.

This is achieved by honing human capital and cultivating social networks. South Koreans and Gujarati-speaking Indians achieved commercial prominence in the dry-cleaning business and the hospitality sector, respectively. South Koreans are 34 times more likely to operate dry cleaners than other immigrant groups and Gujarati Indians are 108 times more likely to manage motels. These kinds of success stories make the case for “immigration” sound plausible.

However, repeating statistics that showcase some groups’ accomplishments can’t change the fact that other groups accomplish much less. Like talent in America, the abilities of immigrants are unequally distributed.

The evidence that some immigrants boost economic growth and innovation is substantial. Yet the ethnic background of these immigrants is rarely mentioned in public debates. Asserting that European immigrants, rather than immigrants in general, have a disproportionately positive impact can be risky indeed. Distinguished scholar Lawrence Mead was publicly skewered in 2020 for suggesting (in a now retracted article) that immigrants from the developing world struggle to achieve parity with native-born Americans because they lack the individualistic culture of earlier immigrants from Europe.

An individualistic culture matters for development because it promotes independence and encourages citizens to be accountable for their failures. Mead’s thesis is that the independent mindset that individualism fosters is a crucial source of American ingenuity. While controversial in some circles, one can hardly dispute that European human capital played a pivotal role in driving US economic development.

In a 2020 study, Yale researchers showed that in the period 1880–1920, European immigrants were actually more innovative than natives, with German and British immigrants innovating at particularly high rates. Immigrants had such a large impact on growth that curtailing the flow of British and German immigrants after 1880 would have decreased per capita income by 10 percent.

Another study, which focused on the late 19th and early 20th centuries, found that technology areas in which European immigrants were more active from 1880 to 1940 predicted numbers of patents and citations between 1940 and 2000. The literature also indicates that areas which had greater European immigration boast higher living standards, greater educational achievement and more innovation today.

European countries have gotten much richer, so Europeans no longer have a strong incentive to migrate to America. Hence recent immigrants tend to come from non-Western countries. Yet there is still substantial inequality in the performance of non-Western groups.

Research consistently shows that Chinese and Indian immigrants are the primary contributors to immigrant patenting. Thanks to their high levels of education, Indian immigrants are 55 times more likely to be employed in a scientific profession than immigrants from the Caribbean, Mexico and Central America.

Furthermore, a landmark report by the RAND Corporation found that East Asian immigrants enter the US with wages considerably below the native level, but manage to narrow the gap within 10-15 years. European immigrants arrive with wages roughly at the native level, and continue to earn comparable wages. Mexican immigrants, by contrast, enter with wages considerably below the native level, and do not narrow the gap like East Asians – even when controlling for education. Clearly, immigrant groups have different propensities for wealth creation and professional achievement.

Looking beyond America, researchers have found that educated European immigrants contribute to higher levels of patenting in Canada. While some would attribute this effect to the immigrants’ high human capital, it is not the whole story.

Westerners are the most individualistic people in the world and individualism is a robust predictor of both innovation and economic growth. Economists have shown that immigrants from individualistic countries have higher cognitive skills and invest more in human capital than those from other cultures. Such immigrants are more likely to be employed in professional jobs that offer lucrative incomes. Consistent with the research, they are also more innovative, more entrepreneurial and more likely to work in research occupations.

As a matter of fact, much of the non-Western world has profited from European human capital. During the period 1882–1904, the Chilean government implemented a policy of attracting skilled Europeans. This initiative succeeded at raising the human capital of natives, who were recipients of knowledge transfer, and it boosted economic output fifty years after being discontinued. Researcher Felipe Gonzales credits Europeans for modernizing Chile’s economy. Studies of European immigration to Argentina produce similar results, with one finding that counties with historically higher shares of European immigration have better academic performance, more skilled employees and superior economic outcomes.

Although often omitted from the public debate, studies in the UK find that the net fiscal contribution of European immigrants is positive, whereas immigrants from outside the European Economic Area are a net cost.

According to Oxford Economics (2018), European immigrants in the 2016-2017 fiscal year paid £4.7 billion more in taxes than they took in public services; for non-EEA immigrants, the figure was minus £9 billion. Interestingly, European immigrants added £2,300 more to the public coffers than the typical UK adult, whereas those from outside the EEA contributed over £800 less. Quite striking is the fact that European immigrants make a positive fiscal contribution even when the government is running a deficit.

By contrast, non-EEA immigrants are heavily represented in the UK’s social housing sector (which refers to housing that is subsidized by the government). Nearly fifty percent of households headed by Ghanaians and Jamaican immigrants in London are in social housing.

Nor has the Netherlands benefited from taking in non-Western immigrants. A rigorous study by researchers associated with the University of Amsterdam estimates that from 1995–2020, the Dutch government spent €‎400 billion net on immigration. Even more startlingly, asylum seekers cost the government €‎475,000 per person. For those aware of the link between culture and development, these findings are unsurprising. As such, importing poor migrants from countries lacking a bourgeois culture is often a recipe for disaster.

US pundits can maintain the delusion that all immigrants are valuable; the evidence is clear that Western and some Asian immigrants are disproportionately successful. Uncontrolled immigration from poor non-Western countries is detrimental to America’s interests because the immigrants are culturally different from the ‘wretched refuse’ of Europe who arrived in the 19th and 20th centuries. Americans ignore this difference at their peril.

Lipton Matthews is a research professional and YouTuber. His work has been featured by the Mises Institute, The Epoch Times, Chronicles, Intellectual Takeout, American Thinker and other publications. His email address is: lo_matthews@yahoo.com

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