Open borders open thread: November

This is an open thread for people to comment on any issue about the Open Borders website, open borders as a topic, or anything else of relevance to open borders that is not directly relevant to our other blog posts. We’ll have one such thread every month. Please use this thread for comments of a generic nature. This will help keep discussions of specific posts focused on the points made in those posts.

Thank you very much!

12 thoughts on “Open borders open thread: November”

  1. I think there is room for more discussion of language here. I think there has been mention of the literature showing how low-skilled migrants who do not speak the native language of a recipient country can be complementary to natives, who take jobs requiring local language proficiency while migrants take manual labor and other non-linguistically demanding jobs.

    But the role of language as a barrier to migration in the European Union is also interesting. Within the EU migration seems to have been relatively small compared to that within the US, probably due to linguistic/cultural factors. Strong wage differentials are enough to drive people from Eastern Europe to richer areas, but between similar-income countries that pressure is not present.

    This factor seems most useful for thinking about the economic effects of open borders between rich countries, e.g. extending the EU common labor market to include places like the US, Canada, Japan, Korea, and Australia.

  2. I’d like to see open borders advocates give their estimates of the effect of income differentials on migration rates. That is, when people have the ability to migrate, there are fixed costs of moving, which are more often overcome when the relative difference in wages and quality of life is greater between locations. In the European Union people from the poorest countries move more than the richest.

    I have seen some open borders advocates talking about 40% of GDP (GDP of the sending country as a portion of the recipient country) as a level at which economic migration slows to a crawl.

    However, the largest place premia, relative to rich countries, are found in the countries with the lowest incomes. And representative migrants from these countries tend to underperform on various measures in the rich countries. So this effect would tend to skew the immigrant mix under open borders towards less desirable immigrants.

    How will migration rates vary by place premium gap? What will be the shape of the function from wage differential to migration rate, if most anyone can migrate?

  3. Spain (along with other economically distressed European countries) is selling residency permits bundled with houses to clear some of the excess in the property market:

    http://www.telegraph.co.uk/news/worldnews/europe/spain/9689008/Foreigners-offered-chance-to-stay-in-Spain-for-130000.html

    “Although the details are yet to be agreed, the measure is expected to imitate agreements established in Portugal and Ireland earlier this year where residency papers are issued in return for property investments of 400,000 euros (£327,000) and 500,000 euros (£410,000) respectively. Hungary last month offered permanent residence to non-EU nationals if they bought at least 250,000 euros worth (£201,000) of a special issue bond.

    But Spain seemed likely to undercut those offers significantly, promising residency in return for investment in properties with a minimum value of 160,000 euros (£130,000), the national average property sale price, Mr Garcia-Legaz indicated.
    “It’s a balanced figure,” the secretary of state for trade said. “Any lower and it might create a massive demand for residence permits with housing as the excuse to get them.”
    The measure is designed to boost foreign investment, targeting the Chinese and Russian markets, where demand for Spanish properties has continued to grow while northern European demand has waned.”

      1. In this vein, it would be worth calculating what the net present value of the $500,000 investment in a depressed area, required for a US investor green card, is. It might translate into a surprisingly low real cash cost, since one hopes to get most of an investment back, and the minimum time of investment is only 2 years. The real cost of a green card might be $100,000 or less already, albeit with delays, hassle, and a need for cash upfront.

        http://www.csmonitor.com/Business/2009/0813/want-a-us-green-card-bring-cash
        http://www.nytimes.com/2011/12/19/nyregion/new-york-developers-take-advantage-of-financing-for-visas-program.html?pagewanted=all

        Making the process faster and less hassle helps:

        “”Investor visa” or citizenship programs are offered by many nations, including the United States, Canada, Britain and Austria. But the Caribbean countries offer a fast path to citizenship at a very low cost. The whole process, including background checks, can take as little as 90 days in St. Kitts.”

        http://en.wikipedia.org/wiki/EB-5_visa
        Interestingly, there are apparently 10,000 slots for investor green cards each year, and historically less than 10% were used, although his has recently shot up to almost 40%.

        Still, if one wants to enable more migration to the US, one could start businesses, e.g. in construction, and work with foreign investors seeking green cards.

        1. Hi BK,

          Thanks for your comments. We’ll be looking at these shortly and might do a post or posts on this in the near future.

  4. Megan McArdle’s interesting discussion of demographic decline and immigration. One noteworthy point is that the foreign-born share of the U.S. population is already the highest it’s been since the 1920s and rising:

    http://www.thedailybeast.com/articles/2012/12/04/our-demographic-decline.html

    Another is that under family reunification schemes greatly increased immigration of workers also brings in their parents and grandparents, eating away at the gains in pension sustainability from bringing in young people.

  5. Restrictionists like to complain about the US “diversity visa lottery” which allows random high school graduates (or people with experience in trades requiring 2 years of experience) to apply for green cards if they meet standard requirements such as not being infected with HIV/AIDS and lack of a criminal record.

    But in fact they seem quite selected to me, relative to what we would see under open borders, with cheap, fast, convenient entry for anyone.

    About half of these diversity winners are African, about a quarter of immigration from Africa to the United States:

    http://en.wikipedia.org/wiki/Diversity_Immigrant_Visa#2012_results
    http://en.wikipedia.org/wiki/Immigration_to_the_United_States#Contemporary_immigration

    Rates of high school graduation in sub-Saharan Africa are very low, as low as 0.5%, and averaging less than 20% (and some of the higher numbers reflect the presence of people of non-native-African descent, e.g. South Africa, which has extreme educational disparities).

    http://huebler.blogspot.com/2012/02/ssa.html
    http://www.africa.com/blog/education_reform_successes_in_south_africa/

    In Sub-Saharan Africa 5% of people are infected with HIV/AIDS, concentrated overwhelmingly among the half of the population who are not children and not very old, which is also the primary immigrant source, so this provides about a 10% filter.

    http://www.pewforum.org/future-of-the-global-muslim-population-regional-sub-saharan-africa.aspx#5

    About half of lottery winners fail to follow through with the migration (discovering they were ineligible, failing to muster fees, changing addresses and not receiving the mail).

    And finding out about the program, bothering to apply, fill out paperwork, and so forth all provide additional filters. There are long delays, which tax patience and conscientiousness.

    So I wouldn’t be surprised if even the diversity visa recipients are selected to be among the top 5%-10% of potential African migrants, ranked by expected contribution to the receiving country. The non-diversity visa categories (the other 75% of current immigration from Africa) are even more selected.

    So the shift in selectivity involved in a move to open borders would be very large.

    1. See table 3 in this paper for more selection data:

      http://perso.uclouvain.be/frederic.docquier/filePDF/DM_ozdenschiff.pdf

      42.6% of emigrants from Sub-Saharan Africa have tertiary education, versus 2.8% of residents of SSA.

      For South-central Asia (India and surrounds), 52.5% of migrants fit the bill, versus 5.0% of residents.

      For the Caribbean, 38.6% vs 9.3%.

      For East Asia 55% vs 6.3%.

      It’s mathematically impossible to scale up immigration to open borders levels without a collapse in selection on migrant quality.

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