Economics and emigration: Trillion-dollar bills on the sidewalk?

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Citation: Michael Clemens (2011) Economics and emigration: Trillion-dollar bills on the sidewalk?. Journal of Economic Perspectives (RSS)

doi: 10.1257/jep.25.3.83 Wikidata: Q18145455

Download: http://aeaweb.org/articles.php?doi=10.1257/jep.25.3.83

Tagged: Economics (RSS) economics (RSS), migration (RSS), emigration (RSS), immigration (RSS)


Summary:

Constraints on migration may have orders of magnitude greater negative impact on welfare than constraints on trade and investment -- trillions of dollars worth -- but is much less studied:

“international trade” is 13 times more frequent than “international migration” in all the published article abstracts contained in the Research Papers in Economics (RePEc) archive. Furthermore, economists focus on arrival, not departure: in RePEc, “immigration” is four times as frequent as “emigration.”

All barriers, including non-policy barriers such as distance and language, amount to a 74% tariff on goods; price differences between the same goods in different markets are of the same magnitude. Unskilled labor compensation in different markets varies by 1000%.

Literature on of potential welfare increases due to elimination of barriers to international labor mobility includes four estimates, ranging form 67% to 147% of global GDP.

Author surveys four areas of research needed for further estimation:

  • What are the External Effects of Migrants on Nonmigrants?
  • What is the Elasticity of Labor Demand at the Origin and Destination?
  • Is Labor Productivity Mostly about Who You Are, Or Where You Are?
  • What Future Level of Emigration Is Feasible?

For the first three, author finds no hints so far that existing estimates are grossly incorrect, including data from past examples of mass migration and integration. Regarding the last, author notes:

economists should be open to the possibility that dramatic changes in what is practical can happen over several decades. After all, changes in geographic labor mobility that were unthinkable only a few decades ago have come to pass. Through the 1980s, a Polish national attempting to emigrate to West Germany could be shot by soldiers sealing the Inner German border from the east. Today, Polish jobseekers may move freely throughout Germany. The world has summarily discarded vast systems of restrictions on the labor mobility of medieval serfs, slaves, women, South African blacks, indigenous Australians, and a long list of others.

Author briefly speculates about cause of relative lack of attention to emigration from economists, suggests that mercantilist tradition in economics of placing national standing above individual welfare could be one.

Theoretical and practical relevance:

Further media available at a page for a working paper version http://www.cgdev.org/content/publications/detail/1425376