The economics of mass deportation

From Marginal Revolution. 

"Following the removal of 50% of unauthorized immigrants, in the short run average native real wages rise 0.15% nationally, driven by an increase in the capital-labor ratio. In the long run, however, native real wages fall in every state, and by 0.33% nationally, as capital gets decumulated in response to a lower population. Consumer prices in the sectors intensive in unauthorized workers – such as Farming – rise by about 1% relative to the price of the average consumption basket, while most other sectors experience negligible relative price changes.

That research result is from Javier Cravino, Andrei A. Levchenko, Francesc Ortega & Nitya Pandalai-Nayar."

 

What Zimbabwe Can Learn From Chile: A Tale of Two Data Series

By Paul McDonnold of AIER. Excerpts:

"In 1996, the Economic Freedom of the World (EFW) Index debuted. The model aggregated dozens of variables into a single figure for each nation, between 0 (the least economic freedom) and 10 (the most economic freedom)."

"In 1970, for instance, Chile’s EFW Index was in the bottom quartile globally at 4.69. This was the year socialist Salvador Allende won the presidency with only 36 percent of the popular vote (no candidate having won a majority, the legislature chose him). A slew of socialist reforms followed. Banks were nationalized, price controls were instituted and money printed like there was no tomorrow. Predictably, private investment plummeted and inflation spiked as the nation plunged into a recession.

A military coup overthrew Allende in 1973, with an alleged but uncertain level of help from the Nixon Administration and in particular Secretary of State Henry Kissinger. The new Chilean leader, Augusto Pinochet, was no socialist. But he did wield power like one—through brutal repression. And while his advisors included free-market economists such as Hernán Büchi, the regime’s policies were at best a burlesque of economic freedom.

Consequently, in 1975 Chile’s EFW Index reached an all-time low of 3.82. But after Pinochet was defeated in a 1988 plebiscite, the nation began to liberalize its society and its economy. In 1990, it moved into the top quartile of EFW rankings for the first time, with a reading of 6.89. While the nation’s economic and political path since has not always been smooth, Chile has stayed in the top quartile every year. What does such economic freedom mean on the ground? 

According to the current CIA World Factbook, since the 1980s Chile’s poverty rate has fallen by more than half."

"Zimbabwe is another story. It began 1970 in a slightly better position than Chile, with an EFW reading of 4.96. It was known as Rhodesia then, a new republic trying to transition from British rule. The decade of the 1970s was one of political instability as a government led by Prime Minister Ian Smith contended with both Marxist and Maoist communist groups for the country’s future. The Maoist Zimbabwe African National Union (ZANU) prevailed, changing the nation’s name to Zimbabwe in 1980. ZANU has been in control of Zimbabwe ever since, with Robert Mugabe serving as prime minister or president from 1980-2017.

While ZANU has not remained strictly loyal to the Maoist model of communism, and has attempted some pro-business policies, government intrusion in the economy remains high. Property rights are not well enforced. Corruption is systemic and regulations stifle both new business formation and foreign investment. Consequently, since 2000 Zimbabwe has remained in the bottom quartile of EFW Index scores, with a 2023 reading of 3.91, a 21 percent decline from 1970. 

These numbers have tragic implications, especially for the least privileged. In 2023, Zimbabwe’s poverty rate was over 70 percent and an estimated half the population lived on less than $1.90 per day."

Trends in Competition in the United States: What Does the Evidence Show?

Carl Shapiro and Ali Yurukoglu. In Journal of Political Economy Microeconomics.

"Abstract

Has the US economy become less competitive in recent decades? One might think so, based on a body of research that has rapidly become influential for antitrust policy. We explain that the empirical evidence relating to concentration, markups, and mergers does not show a widespread decline in competition. Nor does it provide a basis for dramatic changes in antitrust policy. To the contrary, the evidence indicates that many of the trends are likely to reflect competition in action. We identify opportunities for future research in the cross-industry evidence-at-scale paradigm, the industry-specific study paradigm, and their intersection."

 

Report: Arkansas Education Freedom Accounts students test well in ‘fiscally modest’ program

Scores for math, language outdo nationwide averages, UA Department of Education Reform says

By Josh Snyder of the Arkansas Democrat-Gazette. Excerpts:

"Arkansas students who participated in the Educational Freedom Accounts program last school year outperformed on average 57% of students nationwide in math and 59% of students in English language arts on nationally norm-referenced exams, a new report indicates.

The figures are part of a 92-page report on the Educational Freedom Accounts program for the 2024-25 school year that was published Wednesday by the University of Arkansas Department of Education Reform"

"The program significantly expands state taxpayer funding of student tuition and other costs related to private schools and some homeschool expenses. While it is often referred to as a voucher program, some advocates argue it works differently than traditional vouchers. The 2025-26 school year is the first in which the program is open to all Arkansas students; during the initial 2023-24 school year, enrollment in the program was capped at 1.5%, while in 2024-25 enrollment was capped at 3%."

""The program remained fiscally modest relative to the state's K-12 budget while continuing to build operational capacity and provider choice statewide," it states."

"Of those participants in the 2024-25 school year, 76% attended participating private schools, while 24% used program funds to support their homeschooling."

"Students completed a total of 5,317 tests using the NWEA Measure of Academic Progress. Those students outperformed 58% of students nationwide in math on average and 60% of students nationwide in English language arts" 

"A total of 2,380 tests were completed using the Iowa Test of Basic Skills. On average, students who took that assessment outperformed 62% of students nationwide in math and 64% of students nationwide in English language arts.

Homeschool students outperformed 63% of students nationwide in math on average, and outperformed 68% of students nationwide in English language arts."

"a greater percentage of students participating in the accounts program demonstrated mastery in English language arts, math and science than the statewide aggregate for the exam" 

"The report also argues the Educational Freedom Accounts program saved the state as much as $22 million."

"Students receiving an account get 90% of what public schools get per student in state funding from the previous school year."

Gavin Newsom Opines on Wealth and Taxes

The California Governor finally admits who pays for Sacramento’s spending—billionaires. 

WSJ editorial. Excerpts:

"He now admits that taxes affect where people choose to live and invest."

"The union claims the measure would raise $100 billion in revenue. That’s doubtful given that it has already spurred many billionaires to decamp."

"“The impact of a one-time tax does not solve an ongoing structural challenge,” the Governor said Thursday. “You would have a windfall one time, and then over the years, you would see a significant reduction in taxes because taxpayers will move.”"

"Mr. Newsom said he is very “mindful” that “we rely on a very small number of people that allows us to do historic things”—i.e., spend at historic levels. His recently proposed budget includes $539 billion in spending, up 68% from 2019."

"the top 1% of earners pay about half of state income tax."

"California’s federal Medicaid dollars this year are projected to increase by $18 billion (15%)." 

Moving from socialism to capitalism greatly improved Poland's economy

See Poland’s Economy Set to Enter Global Top 20 Following Another Strong Year by Don Nico Forbes of The WSJ. Excerpt:

"Poland’s economy topped $1 trillion last year, punctuating a decades-long boom that is in stark contrast to the faltering economies of its much bigger European neighbors.

The milestone, confirmed by data released Friday by the country’s statistics agency, likely lifted Poland into the world’s top 20 economies for 2025. It is expected to supplant Switzerland, which hasn’t yet released its end-of-year tally. Poland now sits right behind No. 19 Saudi Arabia’s $1.3 trillion economy.

Three-and-a-half decades ago, under an isolated communist regime, the purchasing power of an average Pole—adjusted for local prices—was on par with Jamaica. Now, it’s higher than Japan."

New York’s Charter Schools Live Up to Their Promise

Success Academy in the Bronx has a 90% poverty rate yet has reached a 96% proficiency rate in reading

By Jason L. Riley. Excerpts:

"we know from decades of empirical research that public charter schools often outperform their traditional counterparts. The problem is that the American Federation of Teachers, the National Education Association and other opponents of school choice see charters as a threat—not to kids but to unions."

"the decline in the quality of public education in the U.S. predates the advent of charters in the 1990s. Charter schools are being blamed for a pre-existing trend"

"A study of reading outcomes in New York state public schools that serve high concentrations of economically disadvantaged children found a disproportionate number of charter schools winning the highest marks. Charters were 9.5% of the study’s sample but “earned 38.5% of the spots on our list of exemplars.”" 

"The 10 highest-scoring schools were located in New York City, and seven of those were charter schools in the Bronx, which is home to some of the poorest ZIP Codes in the country. “All serve a high concentration of low-income students, with 66% to 92% of children qualifying for free or reduced-price lunch,” the report noted. “And yet, 90% to 97% of their third graders were proficient readers in 2024, the year of our analysis. In comparison, the proficiency rate for all third graders across the state was just 43%.”"

"The top-scoring school was a Success Academy charter school in the Bronx, where the student-body poverty rate is 90% and 94% of students scored proficient in third-grade reading in 2024."

"A wait list in New York City runs to 163,000 students, yet lawmakers have placed an arbitrary limit on the number of charters"