After reading books by both Krikorian and Riley, I am struck by the contrast in what they consider the natural/efficient state of labor markets to be.
Restrictionists like Krikorian view the “natural” state of the labor market as one with no immigrants. Thus, if large scale immigration increases the supply of labor in a particular labor market, Krikorian refers to this as an “artificially loose labor market” which he in turn blames for the suppression of wages of natives and slowdown in technological progress. This isn’t to suggest that Krikorian isn’t open to allowing immigration when it is helpful, but rather, he views any immigration as a distortion of labor markets that needs justification. Quotes are included below the fold.
On the other hand, moderate open borders advocates such as Riley, as well as more radical open borders advocates like Lant Pritchett, view local labor markets as inherently embedded in global labor markets, and the “efficient” state as one with relatively unrestricted labor mobility. To Riley, then, it is immigration restrictions that constitute a distortion of the labor market. Again, this is not to suggest that Riley would not be open to immigration restrictions under any circumstances, but rather, he would view them as a distortion of the labor markets that would need to be justified on other grounds. Quotes are included below the fold.
Is there a way of resolving the issue? Continue reading Efficient or artificial? Restrictionists versus open borders advocates