Despite the great danger and cost of crossing the border illegally into the United States, hundreds of thousands of the hardest-working Mexicans are drawn by the relative prosperity they can achieve north of the border — where the average income of a Mexican-American household is more than $33,000, almost five times that of a family in Mexico.
In poor economies, fast economic growth increases inequality as some workers profit from new opportunities and others do not. The share of national income accruing to the top 1 percent of the Chinese population more than doubled from 1986 to 2003. Inequality spurs economic growth by providing incentives for people to accumulate human capital and become more productive. It pulls the best and brightest into the most lucrative lines of work, where the most profitable companies hire them.
And the subject of immigration is a reminder that a new US Congress is about to be sworn in, with expectations of a new, harsher policy approach to immigration. Will that be good or bad for inequality and the economy?
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