What's US economy's future? Ask illegal immigrants.

The rise and fall of border crossings foretells economic change, researchers say.

from the May 2, 2007 edition

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PHOENIX - Fewer people are trying to sneak across the US-Mexico border. As a result, US border officials are nabbing fewer illegal immigrants – 30 percent fewer for the first quarter of this year compared with the same period a year ago. That's a triumph, says US Customs and Border Protection, of new sophisticated detection equipment as well as 6,000 National Guard troops situated along the 2,000-mile border with Mexico.

But enhanced security may explain only part of the decline. A slowing US economy, resulting in fewer jobs, is discouraging immigrants from slipping into the United States, according to economists at Arizona State University in Tempe. In fact, falling border apprehensions may be an early predictor of where the economy is headed.

If that's true, then Americans should prepare for rough economic times ahead, says Dawn McLaren, a research economist at Arizona State's business school.

For the past decade, Ms. McLaren has been tracking the relationship between border apprehensions and economic growth. Every time apprehensions declined, the economy slowed about 12 months later, she found. "About a year before a recession, or a down cycle, there was a slowdown in the number of arrests" on the border.

The connection is straightforward: New illegal immigrants hold some of the economy's most marginal jobs, which are some of the first to be left unfilled when a slowdown looks imminent. When jobs are scarce, word quickly gets out to would-be immigrants.

"Because it is difficult and dangerous to cross the border, they're not going to come unless they have a job lined up," McLaren says. "If they get a call from someone saying it's a good time to come, they do. If the caller says wait for the times to get better, they do that."

During the good economic times of the 1990s, the number of apprehensions (and thus illegal border crossings) generally rose. But they fell dramatically after December 1995 as the economy slowed (see chart below), rebounded a bit, and then fell several months before Asian currencies plunged in July 1997, setting off economic jitters in the US. Apprehensions rose again, peaking in January 2000, two months before the dotcom stocks hit their high and 14 months before the US entered a recession. Apprehensions bottomed out in October 2001 along with the recession, rose as growth improved, then dived again when the economy began to slow in late 2002, and then rose again.

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