The big, beautiful border wall America built ten years ago
And why it did more harm than good
United StatesNov 24th 2018 edition
IN OCTOBER 2006 George W. Bush signed the Secure Fence Act into law. It sailed through Congress with big bipartisan majorities. Among the Democratic senators voting in favour were Joe Biden, Hillary Clinton and Barack Obama. Over the next four years the law added 548 miles of fencing along the border with Mexico—five times the previous length—built at an over-budget cost of $2.3bn. A further $450m was incurred in maintenance costs, which will continue to grow.
President Donald Trump's pledge to put up a "big, beautiful wall" along the rest of the 2,000-mile southern border helped take him to the White House. Now he is threatening to trigger a partial government shutdown on December 7th unless Congress stumps up for his pet project. ("This would be a very good time to do a shutdown", he mused recently.) Mr Trump's wall would be much larger than the last attempt. He wants $5bn in this fiscal year. An earlier deal struck with Democrats allocated only $1.6bn for border security. The cost of a full wall could be $25bn (and no, Mexico will not be paying for it).
So what effect did the first 550 miles have? Not much, suggests an analysis by economists at Dartmouth and Stanford Universities. Arrests at the southern border dropped after the fence was built, but this cannot be attributed completely to the wall, since those years also saw a deep recession. Still, by using a confidential data source—the ID cards issued by the Mexican government, through its consulate, to its citizens living as immigrants in America, many of them illegally—the economists have isolated the effect of the new fencing on migration flows. And they calculate that it reduced the number of Mexican citizens living in America by only 0.6%.
But perhaps it shored up American wages? Sadly, no. College-educated Americans came out worse, losing about $4.35 per person in annual income. Low-skilled workers without a college education came off only slightly better—gaining 36 cents of income—because of reduced competition in the labour market. This is a pittance next to the $7 per person paid for the wall's construction (to say nothing of the big maintenance and personnel bills to come). Because of lost workers, American GDP probably shrank by $2.5bn (0.02%) overall.
Mexicans immigrate to America illegally because of the lure of high-paying jobs. Policies that increase wages in Mexico tend to drive down migration. Cross-border trade costs more than trade within America over the same distance due to tariffs and border delays. The authors simulate the effects of a 25% reduction in cross-border trade costs and find that migration would have shrunk more than under the Secure Fence Act (by an additional 34%). Yearly benefits for both uneducated and educated American workers would increase—by $59 per head and $81 per head, respectively.
All this suggests that Mr Trump's approach—jeopardising trade relations with Mexico while also agitating for a larger wall—is inconsistent if he aims to reduce illegal immigration from Mexico. If the aim is just to make many voters feel better, there are cheaper ways of doing that, too.
* "Border Walls" by Treb Allen, Cauê de Casto Dobbin and Melanie Morten, NBER working paper.
This article appeared in the United States section of the print edition under the headline "The big, beautiful border wall America built ten years ago"
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