Thinking of immigration

 Reading opinions on both sides of the recent 100k fee for H1B workers got me thinking about benefits / costs of immigration to any society . 

I couldn’t Marshall my thoughts together just by pondering these opinions which were more of if these immigrants were absent we would take their jobs versus immigrants might be creating these jobs , so I decided to ask chat gpt to compare 2 fictional countries :

Here is the output :

Here’s a clean, apples-to-apples thought experiment that shows what opposite immigration policies can do to jobs, output, overall activity, and social cohesion.

Setup (two hypothetical countries)

• Same starting point (Year 0): population 50M, labor force 25M, unemployment 5%, GDP $2.0T, trend growth 2%/yr.
• Production: Cobb-Douglas (constant returns): Y = A K^{0.35} L^{0.65}.
• Policies (10-year horizon)
  
• Openland (welcoming): net immigration = 0.8% of pop/yr (≈400k/yr). 75% are working-age; 70% of those join the labor force. Modest diversity/innovation bump to productivity of +0.1 pp/yr once absorbed.
• Closedland (restrictive): zero net immigration. Aging trims labor force –0.3%/yr. No extra TFP bump.
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Intuition: In the short run, more labor nudges wages down a touch and raises GDP; with time, capital and productivity adjust so wages recover and GDP per capita depends on whether productivity benefits arrive. In restrictive settings, fewer workers can lift wages briefly but slow total activity and strain public finances as dependency rises.

Short-run (0–3 years): frictions dominate

Jobs & wages

• Openland: Labor supply rises; with capital fixed initially, sectors exposed to new competition can see a small wage dip (rule-of-thumb: ~–0.2% wage impact for a +0.6% labor shock/yr), and unemployment can tick up ~0.1–0.3 pp while matching/credentialing occurs. Displacement is usually small and temporary; complements (managers, engineers, owners) often see gains.
• Closedland: Tighter labor supply nudges wages up a bit in shortage sectors; unemployment can dip below 5%. But firms face hiring constraints → postponed projects, longer wait times, and more inflation pressure.

Output & activity

• Openland: With K fixed, extra labor raises Y roughly by (1-\alpha)\Delta L ≈ +0.4%/yr above trend. More consumption, more services used; housing and infrastructure face pressure if supply is tight.
• Closedland: Shrinking labor force reduces near-term output growth by ≈ –0.2%/yr vs trend. Some substitution to automation; service availability tightens (childcare, eldercare, hospitality).

Social cohesion

• Openland: Big inflows stress housing, schools, and identity if integration lags → higher short-run friction unless governments expand supply (housing/transport), speed up credential recognition, and invest in language/civics.
• Closedland: Less cultural churn; fewer near-term strains. But labor shortages can widen inter-regional divides (booming, high-rent cities vs stagnating towns), and fiscal pressures build with aging.

So any policies in this regard have to consider this factors . Do not based immigration on just a moral appeal, look to the economic effects.

Long-run (10 years): capital & skills adjust

Using the assumptions above (incl. a modest +0.1 pp/yr productivity bump in Openland), here’s a compact scoreboard: