The Political Economy of Immigration Law: Impact of Simpson-Rodino on the United States and Mexico.

This article discusses the economic implications of the U.S. Immigration Reform and Control Act of 1986 for the U.S. and Mexico. About two years ago, the U.S. passed the Immigration Reform and Control Act also called the Simpson-Rodino bill of 1986. The Act called for increased enforcement of migration policy, employer sanctions and amnesty for those who could prove continuous residence since 1982. Despite considerable discussion and debate prior to the act, the legislation was passed without any comprehensive economic analysis of its potential impact on the U.S. or its main source of undocumented immigration which is Mexico. A general equilibrium approach to the problem of migration policy indicates that the U.S. has even more to gain than Mexico from greater accessibility to Mexican labor in the next decade than Simpson-Rodino would permit. However, the gains to capital and the majority of higher skilled workers would be partially offset by slower earnings growth for the lowest ten percent of its wage earners. The fact of increasing labor market interdependence between the U.S. and Mexico, owing to proximity, demographic trends, growing wage differentials and rising social aspirations will demand much greater cooperation in policy-making than occurred in the case of Simpson-Rodino.