Interesting brief 2006 article from Richard Freeman (one of the most eminent labour economists alive) on liberalising migration laws. It actually doesnt have that much to recommend it -- most of the relatively-original (at the time anyway) points it makes have already been made by the Pritchett & Clemens literature, and for non-original points, there are better literature reviews out there. But some of the language is quite poetic: Suggest linking labor standards to trade and its protectionism in disguise. Limit capital flows and the International Monetary Fund is on your back. But restrict people flows? Thats just an accepted exercise of national sovereignty! Geographic variation in wages and living standards around the world gives the global economy the appearance of a gated wealthy community consisting of the advanced countries, surrounded by impoverished ghettos, with immigration restrictions preventing the ghetto residents from moving to where their productivity and well- being would be higher. Why Do Immigrants Come? For economic gain, says the economist. Because of social networks, says the sociologist. Over short distances, says the geographer. For family reasons, say the rules for visas in many countries. All are right. The huge gains in income that immigrants from a low-income country obtain by moving to a high-income country virtually guarantee that most of the gains to immigrants occur not because of positive selectivity of immigrants but rather because high-income countries have more complementary inputs: higher capital/labor ratios, more modern technology, superior infrastructure, more efficient markets due to greater legal protections of property and persons, and lower levels of corruption and rent-seeking. As a result of the huge rise in productivity and earnings that an immigrant gains from working in an advanced country, the earnings of small numbers of immigrants in an advanced country can be large relative to the national incomes of their home countries. The 0.1 percent of India’s population living in the United States earn roughly the equivalent of 10 percent of India’s national income. As Dani Rodrik (2001) said: If international policy makers were really interested in maximizing worldwide efficiency, . . . they would all be busy at work liberalizing immigration restrictions.
Posted on: Sun, 27 Jul 2014 06:58:45 +0000
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