Alex Tabarrok has a splendid post “the case for open borders” on Marginal Revolution.
Along the way he points to “Economics and Immigration: Trillion Dollar Bills on the Sidewalk?” by Michael Clemens and forthcoming Journal of Economic Perspectives, “The Domestic Economic Impacts of Immigration” by David Roodman and “The case for Open Borders” by Dylan Matthews, a Bryan Caplan interview and story on vox. All are worth reading.
1) Women
Anecdotes and analogies are important for how we understand events, beyond equations and tables. Bryan makes this point, with a lovely “elevator pitch” metaphor. Bryan comes up with a good story as well, that I hadn’t thought of:
How much has the entry of women to the labor force lowered men’s jobs and wages? (I was tempted to write “access to jobs,” but someone might take it seriously!) Should the US government have prohibited women from entering the labor force, in order to shore up the wages of men?
The increase in women’s labor force participation was huge — from 32% to 60%, resulting in an increase in overall labor force participation from 59% to 67% of the population from 1960 to 2000. 8% of 320 million is 26 million, so we’re talking about a lot of extra people working.
The answer to the first question is surely yes, but not a lot. 26 million men did not lose their jobs so women could work. And the answer to the second question is surely no.
Put similarly, should we be glad of falling birthrates because that means far fewer young people coming to compete for the jobs of older people? Are countries like Japan and Europe breathing a sigh of relief that there are not a lot of youngsters pushing down wages?
David Roodman’s excellent quantiative review makes the point well
The debate over the economic impacts of immigration can be seen as a battle between metaphors. Is an economy like a pie, with a set number of jobs, so that one person’s employment gain is another’s loss? Or is it like a church congregation, which one person can join to experience communion and fellowship without costing anyone else the same?
To a first approximation the answer is clear: the latter.
2) Charity
Roodman starts with
My client GiveWell, working closely with the foundation Good Ventures through the Open Philanthropy Project, is seriously considering labor mobility as a cause to which Good Ventures should commit resources:
It appears to us that moving from a lower-income country to a higher-income country can bring about enormous increases in a person’s income (e.g., multiplying it several-fold), dwarfing the effect of any direct-aid intervention we’re aware of.
I found it interesting that GiveWell commissioned the study. Many of our charities send cows, goats, adventuresome undergraduates and high school students anxious to improve their college admissions chances to Do Good in foreign villages. If you really want to improve their standard of living, letting them work in the US is far more effective. MR says “plaudits are due Give Well,” and I agree.
3) The wedge
How much is the world losing overall by keeping people from moving? Clemens review the literature
For the elimination of trade policy barriers and capital flow barriers, the estimated gains amount to less than a few percent of world GDP. For labor mobility barriers, the estimated gains are often in the range of 50–150 percent of world GDP.
That’s a lot.
4) Inequality
Bryan and Alex have been adding another point. Letting people work in the US lowers, and has lowered global inequality. Letting foreigners sell things in the US has done the same.
