Borjas doesn’t provide empirical evidence to support his concerns, but we can identify in the literature two related strands of research that investigate the impact immigrants may have on economic growth, productivity, or income.

The first strand of literature attempts to directly test the economic impact of immigrants on destination countries. For example, Alesina et al. (2016, p. 135) “find that the diversity of (and arising from) immigration relates positively to measures of economic prosperity”. Clemens and Pritchett (2016, p. 1) investigate “the possibility that without tight restrictions on migration, migrants from poor countries could transmit low productivity (‘A’ or Total Factor Productivity) to rich countries—offsetting efficiency gains from the spatial reallocation of labor from low to high-productivity places”.

Their results suggest that current migration restrictions are neither desirably redistributive nor globally efficient. Sequeira et al. (2017) study the effects of European immigration to the United States during the Age of Mass Migration (1850–1920) on today’s US economic prosperity. Relying on variation in the extent of immigration across counties arising from the interaction of fluctuations in aggregate immigrant flows and the gradual expansion of the railway network across the United States, they “find that locations with more historical immigration today have higher incomes, less poverty, less unemployment, higher rates of urbanization, and greater educational attainment” (Sequeira et al. 2017, p. 1).

The authors also find that “these economic benefits do not come at the cost of social outcomes. Places with more historical immigrant settlement today have similar levels of social capital, civic participation and rates of crime” (Sequeira et al. 2017, p. 43). Lewis and Peri (2015) utilize the fact that immigrants’ settlements are significantly concentrated across cities and regions compared to native-born individuals’ settlements to identify immigrants’ impact on urban and regional economies, focusing on productivity and labor markets. The authors find immigrants’ impact on productivity to be positive, mostly because of their skill diversity.

The authors also find that this increase in skill diversity leads to the adoption of new and efficient technologies, which could explain this positive impact on productivity. They speculate that the adoption of new and efficient technology results from immigrants inducing native-born individuals to specialize in more complex jobs that complement immigrants’ skills, and that it induces higher levels of innovation, both of which may contribute to the increase in productivity. While this literature provides one answer to Borjas’s concerns by showing that immigration does not appear to have any deleterious impact on productivity or prosperity, such literature does not address whether the transmission mechanism is institutional in nature or what institutional impact immigrants may have.

The second strand of literature, often referred as the “Deep Roots” literature, investigates “the effects of historical variables on contemporary income by explicitly taking into account the ancestral composition of current populations” (Spolaore and Wacziarg 2013, p. 325). Some of this literature also attempts to test whether the impact on contemporary income is transmitted through institutions. We can find evidence in this literature that could be interpreted as supporting Borjas’s concerns.

For example, Putterman and Weil (2010) estimate the impact of migration in modifying the influence of long-term historical factors on GDP and income inequality. They believe that while geographic factors, the state of technology in a country a long time ago, the timing of the transition to agriculture, and the presence of state-level political institutions are all good predictors of current GDP, accounting for “the history of a population’s ancestors rather than the history of the place they live today greatly improve[s] the ability of those indicators to predict current GDP” (Putterman and Weil 2010, p. 1627).

First, they find that “immigrant-populated countries are better off on average” (Putterman and Weil 2010, p. 1646). Second, they find that where those immigrants came from matters in terms of their impact on income. Depending on their country of origin, the findings indicate that these immigrants “carried something with them—human capital, culture, institutions, or something else” that explains the level of income of their destination countries hundreds of years later (Putterman and Weil 2010, p. 1651). In other words, according to Putterman and Weil, their results suggest that future levels of economic growth are caused by the “migration of people from countries with higher levels of early development” (Putterman and Weil 2010, p. 1652).

Testing whether these immigrants carried their institutions with them by looking at the relationship between their “statehist measure and three indicators of institutional quality: executive constraints, expropriation risk and government effectiveness”, Putterman and Weil (2010, pp. 1652–1653) find that accounting for “the experience of a country’s population greatly improves the ability of this variable to predict the quality of institutions”. Finally, Putterman and Weil (2010, p. 1662) show “that heterogeneity in the historical level of development of countries’ residents predicts” today’s level of income inequality, which can be problematic if it leads to “inefficient struggles over income redistribution or the creation of growth-impeding institutions” (Putterman and Weil 2010, p. 1658). While Putterman and Weil’s (2010, p. 1677) overall results show that, when investigating the drivers of development, economic growth, and income, we cannot ignore the characteristics of human populations and “where the ancestors of the current population lived some 500 years ago”, the authors don’t reach Borjas’s conclusion and don’t present their results as evidence that we should be concerned about modern immigration and its institutional impact.

Building on Putterman and Weil (2010) and using their global migration matrix, Ang (2013, p. 2) examines “the mechanism explaining how agricultural transition and state history, as well as [how] other dimensions of early development… are causally related to income and institutions” today. Ang (2013, p. 1) shows that “the relationship between early development and current economic performance works through the channel of institutions and that better institutions can be traced back to historical factors”. What is more important, Ang’s (2013, p. 12) results show that “migration has played a significant part in shaping current economic performance” as, when adjusting for global migration, historical measures performed “significantly better in explaining the variations in institutions across countries”.

As for Putterman and Weil (2010), Ang (2013) doesn’t argue that his findings can be extrapolated to the current debate on the institutional impact of immigration.Footnote 6 Murphy and Nowrasteh (2017) employ Putterman and Weil’s (2010) data to analyze the impact of migration-adjusted state history and agricultural history factors on today’s GDP per capita at the state level of the United States, which is characterized by ethnic and racial heterogeneity as a result of its historical immigration and forced immigration flows. They find that their results are not consistent with those of Putterman and Weil (2010) when applied at the subnational level in the United States (Murphy and Nowrasteh 2017, p. 13). In addition, they find “no relationship between Agricultural History or State History with the quality of economic institutions”, which matter for economic growth and development (Murphy and Nowrasteh 2017, p. 12).

Algan and Cahuc (2010) follow an intuition similar to Putterman and Weil’s (2010) that immigrants may bring something when they move to explain the level of income of their destination countries hundreds of years later. Instead of focusing on the impact of geography or institutions, they focus on the transmission of trust across generations and its effects on economic growth (Algan and Cahuc 2010, pp. 2085–2086).

Their results suggest that ancestors’ countries of origin and times of arrival are important determinants of inherited trust amongst descendants of immigrants. By using inherited trust as a time-varying measure of inherited trust in their countries of origin and controlling for country fixed effects, they find that inherited trust has a sizeable causal impact on worldwide growth during the twentieth century (Algan and Cahuc 2010, p. 2086).Footnote 7 While their paper provides interesting results regarding how changes in inherited trust may explain differences in development between countries, it doesn’t explain the underlying causes of such changes (Algan and Cahuc 2010, p. 2086). They argue that several historical events may explain such changes and that “these events have had heterogeneous effects across generations and countries”, but they don’t explain why these events have had heterogeneous effects (Algan and Cahuc 2010, p. 2086). Again, Algan and Cahuc (2010) don’t conclude that we should be cautious about contemporary immigration and its impact on development and economic growth.Footnote 8

Finally, Clark et al. (2015) test more directly Borjas’s concerns by examining empirically the effects of contemporary immigration on institutional quality in the short run. Clark et al. (2015) examine a cross section of 110 countries from 1990 to 2011 and employ the Fraser Institute’s Economic Freedom of the World (EFW) index as a measure of institutional quality. They report statistically and economically significant effects that are inconsistent with Borjas’s conjecture.

First, they find that “a large percentage of immigrants in the population in 1990 is associated with a higher level of economic freedom in 2011” (Clark et al. 2015, p. 326). Second, using the results from the literature estimating the impact of economic freedom on economic growth and using their estimate that a one-standard-deviation larger immigrant stock increases economic freedom by 0.34 points, Clark et al. (2015, p. 333) estimate that “an increase in the immigrant share of this magnitude will generate a 0.45% point higher long-run annual growth rate”.