Double world GDP
According to the paper Economics and Emigration: Trillion-Dollar Bills on the Sidewalk? (2011) by Michael Clemens at the Center for Global Development, open borders could lead to a one-time boost in world GDP by about 50-150%. This paper is a literature review which summarizes estimates made in numerous other papers, and does not contain any new research findings in of itself. The paper relies on the estimates of gains to world GDP from labor mobility to propose a new research agenda in labor and public economics, focusing on migration issues. The paper was referenced in a blog post by Bryan Caplan. Below is the key Table 1 of the paper:
In Table 2 of the same paper, Clemens considers the possible efficiency gains from a partial relaxation of barriers to labor mobility. Clemens writes (on page 2 of the paper, which is page 84 in the journal):
A conservative reading of the evidence in Table 2, which provides an overview of efficiency gains from partial elimination of barriers to labor mobility, suggests that the emigration of less than 5 percent of the population of poor regions would bring global gains exceeding the gains from total elimination of all policy barriers to merchandise trade and all barriers to capital flows.
Links to cited papers for the open borders estimates
|Name of paper with link||Author||Year of publication||Estimate of gain to world GDP||Location of estimate in paper|
|Efficiency and distributional implications of global restrictions on labour mobility : Calculations and policy implications (gated)||Bob Hamilton and John Whalley||1984||147.3||table 4, row 2|
|The Economic Costs to International Labor Restrictions: Revisiting the Empirical Discussion||Jonathon W. Moses and Bjorn Letnes||2004||96.5||table 5, row 4 (assume elasticity of substitution to be 1.0)|
|Efficiency Gains from the Elimination of Global Restrictions on Labour Mobility: An Analysis using a Multiregional CGE Model||Ana Marie Iregui||2005||67||table 3 (may have label 10.3 in gated versions) (first row, homogeneous labour column)|
|TFP Differences and the Aggregate Effects of Labor Mobility in the Long Run (gated)||Paul Klein and Gustavo J. Ventura||2007||121.69||table 3 (last row, efficient allocation column)|
Other work not cited by Clemens
John Kennan wrote a paper titled Open Borders (ungated PDF) a year after Clemens’ paper came out (the original version came out in August 2012, but the paper was updated in October 2012). The data used in the paper is available at Kennan’s research page. Kennan’s calculations also suggest that open borders would more than double world GDP in the long run, though he does not derive numerical estimates for world GDP (even though his model seems detailed enough for such estimates to be obtainable).
Ghost of Christmas Past, a commenter on EconLog, has critiqued the “double world GDP” estimates in a number of comments, such as this comment by Ghost of Christmas Past on Caplan’s “National Egoism” post and this comment by Ghost of Christmas Past on Caplan’s persuasion bleg post.
Blog posts and articles
- Open Borders: The Case blog posts on doubling world GDP, some selected posts below:
- John Kennan’s Open Borders by Nathan Smith, February 11, 2013. This is a detailed analysis of John Kennan’s paper on open borders.
- Double world GDP versus scope insensitivity, by Vipul Naik, May 10, 2012, on the Open Borders blog.
- The story behind the “double world GDP” estimates by Vipul Naik, October 10, 2012, on the Open Borders blog.
- The Efficient, Egalitarian, Libertarian, Utilitarian Way to Double World GDP by Bryan Caplan, August 20, 2011, EconLog.
- The place premium. This concept developed by Clemens and some of his colleagues is used to estimate the income gains from full labor mobility that would accrue to people at the individual level.