On Immigration and Economic Inequality - Alberto Alesina

The following is an excerpt from a 2018 GrowthPolicy interview with the late Italian Economist, Alberto Alesina

[On inequality] - We need to clarify “which” economic inequality. Income inequality and especially poverty have gone down in the world in the last few decades. This is because previously poor countries such as China, India, other East Asian countries, some Latin American countries, and now even many sub-Saharan African countries have been growing faster than rich countries. This is thanks to, amongst other things, globalization and trade. So for the world as a whole we should celebrate the reduction of poverty and income inequity. In the U.S., income and wealth inequality have gone up. I am more worried about poverty and social mobility than inequality. The key policies are those that provide equal opportunities as much as possible and avoid pockets of poverty with no escape even for those who try. Improving the quality of free public education, affordable health care for all, and publicly supported scholarship for colleges are key policies, together [with] urban policies which eliminates ghettos.

People’s beliefs affect policymakers’ decisions, so [those beliefs] matter a lot. When stereotypes about immigrants become common, then the media accommodate these views of the public since the public is their target for revenues. Thus, it becomes a vicious circle. In our research we find that in the six countries we examine (U.S., U.K., France, Germany, Italy, and Sweden) people vastly overestimate the number of immigrants in their countries, and believe than they are poorer and more dependent on the receiving countries’ welfare state to survive than they actually are. Reasonable people can honestly disagree on immigration policies, and the paper does not offer any policy prescription about that, but the important thing is that these policies need to be based on facts, not erroneous perceptions.