Factors constraining migration in the short run following significant migration liberalization

A while back, I posted in Open Borders Action Group the following question:

What do you think would be the critical factor constraining migration rates in the short run if migration policy were significantly liberalized?

and offered a list of possibilities to begin with. Commenters rated the possibilities and added a few more. I have tried to combine the wisdom offered by different commentators and will list the possibilities in decreasing order of importance as per the combined wisdom. The numbering is not the same as in the original OBAG post, but I parenthetically include the original numbers for comparison.

Note that this post isn’t based on a direct analysis of empirical data. That would take too much time and space. I’m planning to have more posts with detailed discussions of particular cases, such as the Mariel boatlift and German reunification. Note that neither of these fits the template too well, because these involve emigration push factors more than liberalization pull factors. If you have other suggestions or historical instances of sudden influxes of migrants based on migration liberalization or for other reasons, do share them in the comments.

A little more context: there are many different views regarding how many would move under migration liberalization. One view is that receiving countries will be swamped. Another extreme is that migration policy has little effect on migration rates (this is a crude simplication of some economic determinist views). Both views present problems for advocates of open borders: the former suggests that it would overwhelm the world, while the latter suggests that there wouldn’t be sufficient migration to realize the huge potential economic gains from migrating.

Bryan Caplan recently pointed out that Paul Collier’s diaspora dynamics model helps resolve the contradiction in a manner that doesn’t look too bad for open borders: migration rates are slow initially, and pick up gradually. This post considers more closely what factors affect the initial migration flow after significant liberalization.

#1: Jobs (was #4 in the original list)

Economic opportunity is a primary reason for people migrating. That doesn’t necessarily mean they will go to the place with the highest-paying jobs, but they’re highly unlikely to move if they (or their family members) don’t expect to find a job that’s at least somewhat better than what they currently have. One reason why migration has such huge promised benefits is that people can move to jobs where they produce more and earn more, thanks to a place premium.

However, it takes time for new jobs to be created. For instance, factory jobs require the factory to be constructed first. Even for job types with low capital costs (such as janitorial services), natives or existing migrants need to set up the services first before others can confidently expect to find employment.

In addition to the fixed costs and time lag of creating jobs (in anticipation of the larger number of migrants who would fill those jobs), there are also regulatory barriers that prevent people from taking up certain kinds of jobs immediately upon moving. If these barriers were relaxed, people might be able to move more quickly. Else, they may need to first arrange for appropriate training or licensing programs to pass the licensing restrictions needed to practice the trade.

#2: Presence of friends and connections in the target country (diaspora dynamics) (was #8 in the original list)

People rarely want to move if they don’t know anybody where they are going. Paul Collier’s analysis of diaspora dynamics notes that migration between two regions starts as a trickle, and, if initial migrants report positive experiences, then it starts building up. In addition to the informational value, people also have better legal, social, and cultural support structures once a diaspora from their homeland has already settled in the new country.

#3: Bureaucracy (was #7 in the original list)

Even after a government announces significantly more liberal migration, the implementation of the policy on the ground would probably take time. New embassies or consulates would be needed to process the larger numbers of visa applications. Other government departments that screen migrants for criminal or terrorist risk would need to be expanded. The legislative changes would take time to be translated into new administrative procedures. This would add delays ranging from several months to several years, depending on how big the changes are.

#4: Housing (was #1 in the original list)

New migrants need a place to stay. Construction of housing has a significant lag time, ranging from at least a few months to a few years, depending on the location. This relates to the bureaucracy point: much of the delay in housing construction can be attributed to delays with getting permits, though the time cost of physically constructing new houses is also nontrivial.

Housing may not be a big issue if migrants can squeeze into existing housing more. I expect that many potential migrants would be willing to live (at least in the short run, while new housing is still being constructed) in crowded housing conditions in order to benefit from the greater earning power in the new country. However, existing laws against overcrowding might again get in the way. Since these regulations tend to be local, however, it’s possible to imagine that, under more liberal migration policies, some cities that are particularly keen to attract migrants will loosen their regulations to encourage such migration, even if others continue to maintain regulation that forbids overcrowding.

#5: Arranging money for the moves, and closing shop in the home country (was #5 in the original list)

The significance of this factor depends to quite an extent on the population segment for which migration is liberalized. Poor potential migrants would probably need some time to arrange for their moves, because they are cash-constrained. They may need to borrow money from existing lenders. Or, new lending arrangements specifically tied to the liberalized migration policy might emerge. This could take several months. High-skilled migrants may not be cash-constrained, but they may have a harder time closing shop in their home country. Those pursuing educational degrees may wait till their degree is completed. Those in a job may need to give a few months’ notice to their employers. People may need to figure out whether and how to dispose of their current real estate and other assets.

#6: Roads and transit infrastructure (was #6 in the original list)

Transportation infrastructure is a major determinant of where people choose to live now, and it will be a determinant of migration flows. The density of roads as well as other transportation infrastructure (such as railway lines) puts limits on the densities sustainable in a region.

This may not be a big factor if migrants can easily move to relatively underpopulated rural areas. But mass migration is likely to be spurred by large numbers of factory or service jobs in dense urban regions, and these do depend on development of transportation infrastructure. Moreover, existing diasporas from their homeland (such as Chinatowns or Little Italies) are most likely to be found in dense urban regions.

#7: Housing utilities infrastructure: electricity, water, and cooking gas (was #2 in the original list)

If native use levels of housing utilities remained unchanged, and migrants were expected to use them at the same rate as natives, then the infrastructure would need considerable expansion before people could migrate. However, I expect that, at least initially, migrants would use considerably less of the infrastructure than natives do. Further, short-run price increases in infrastructure can discourage use at the margin — there’s considerable scope to cut back on the use of electricity and water that people don’t bother implementing because the cost is too little. Resources such as water and electricity are also used heavily by agriculture and industry, and they can cut back on the use of these with rising prices. Moreover, the costs of electricity are determined by the costs of fuels (petroleum, natural gas, coal). Enough of these are traded in a global market that people moving from one region to another will not increase the relevant demand too much in the short run (though demand would increase over the longer run as these people become more prosperous and assimilate into First World levels of fuel use). Finally, some of the housing utility costs scale with the number of households rather than the number of individuals, so if migrants live in more crowded housing, and/or the higher housing prices encourage natives as well to switch to more crowded housing, the overall increase in the use of utilities is even lower.

#8: Physical transportation of migrants to their new lands (was #3 in the original list)

This is arguably the least important, because the fraction of travel currently devoted to long-term migration is fairly small (1-10%) of international travel. Much international travel involves business trips, people visiting friends and relatives, and vacation trips. If a lot more people seek to permanently migrate, that would raise international travel costs somewhat, and dissuade some people from going on vacation trips or visiting friends and relatives. Some people may teleconference instead of making an international business trip. We don’t need an expansion in the number of flights in the short term, though that will probably happen over the longer term. The time taken for people to get visas and to arrange money for their moves is probably more than the lag time involved with flight booking.

Flights may be too expensive for some potential migrants. It’s also possible that ship-based transportation will be able to take care of some of these migrants. Currently, ships are not used for people traveling long distances, but this is largely because most such people value their time a lot higher than the extra cost of traveling by air. If air travel gets too expensive, or if the people traveling care more about cost than time, then cheap, ship-based travel will emerge. It’ll probably be intermediate in quality (and cost) between the ships used to transport people in the 19th century to Ellis Island and the luxury cruise liners of today.

4 thoughts on “Factors constraining migration in the short run following significant migration liberalization”

  1. As to #8: Travel by train, bus or car would be further options. I guess many immigrants to Europe would come in this way, probably most immigrants from Eastern Europe, but possibly many also from farther away.

  2. Probably open borders would not come about in one big step, especially not one step that is completely unexpected. This would leave time to prepare for the new regime.

    There might be several steps that lift restrictions only gradually, and the process would be drawn out, with different speeds in different countries.

    And even if it were one big step, there would be a long debate over whether to open borders. Since public opinion is unlikely to move fast on such an issue (and is not in favor of the idea right now), there would be a slow build-up in support for open borders.

    All this information would be public. So entrepreneurs both in sending and receiving countries would be able to adjust their plans beforehand. Others might bet on the outcome more as speculators. So things would not start on day one of open borders, but earlier on.

Leave a Reply to Hansjoerg Walther Cancel reply