New paper on open borders by John Kennan
August 22, 2012 Leave a Comment
Post by Vipul Naik (regular blogger and site founder, launched site and started blogging March 2012). See:
John Kennan has come out with a NBER paper titled Open Borders (ungated PDF). The paper is heavy on mathematical economics, and adds to a growing literature that indicates that relaxing immigration restrictions would have massive utilitarian benefits while the negative effect on native wages would be small. I haven’t had time to go through the paper in detail, but here’s the abstract:
There is a large body of evidence indicating that cross-country differences in income levels are associated with differences in productivity. If workers are much more productive in one country than in another, restrictions on immigration lead to large efficiency losses. The paper quantifies these losses, using a model in which efficiency differences are labor-augmenting, and free trade in product markets leads to factor price equalization, so that wages are equal across countries when measured in efficiency units of labor. The estimated gains from removing immigration restrictions are huge. Using a simple static model of migration costs, the estimated net gains from open borders are about the same as the gains from a growth miracle that more than doubles the income level in less-developed countries.
While you’re reading the literature on open borders, check out the pro-open borders reading list on this site, which includes a mix of web articles, research papers, and books. If there’s one research paper on open borders you should read, it is Michael Clemens’ “trillion dollar bills on the sidewalk” paper (ungated PDF).
H/T: Arnold Kling