CORRECTING FOR THE EFFECTS OF IMMIGRATION AND PENSION CONTRIBUTIONS.

CORRECTING FOR THE EFFECTS OF IMMIGRATION AND PENSION CONTRIBUTIONS. The Samuelson article I posted on yesterday has a good discussion of the effects of immigration and employee benefits on measurements of per capita growth. These are important, but I rarely see them discussed. The effect of immigration is that there are more poor people in the economy because immigrants tend to have fewer skills and lower wages. Migrating to this country raises their incomes substantially, but comparisons of income do not take into account their lower incomes in their countries of origin. Without a correction, it looks as if some of the people in the country (the new immigrants) have become poorer. The effect of the economy in making them better off is ignored. Similarly fringe benefits are not usually included in income comparisons, although Samuelson says that in the last seven years about 40% of the increase in average compensation came from health care benefits and pension contributions.