Dr Delacroix gives us a great review of the most recent literature on the relationship between open borders and substantial increases in GDP (50%-150%):
Thank you, Rick, for causing me to read this very good paper (and thanks to Brandon for making it easily available). I did not find the 150% increase in GDP you promised . That’s OK because it helps me point to one weakness of this paper that should be relevant to any discussion of emigration/immigration focused on policies. The author seems to have been unable to extract from the others articles on which his is based any coherent time dimension. A temporal dimension seems to be lacking. When discussing public policy it ‘s always necessary to consider: “In the short run, in the long run.” An increase of world joint GDP of 150% in fifty years thanks to relaxed immigration seems plausible; the same rise by next year is out of the question, of course.
On several issues, the author comes close to confusing “absence of evidence” with “evidence of absence.” This may be fine for a scholarly article in the discipline of economics. Difficulty to measure or to act upon should not constrain blog discussion however. Five things.
1 “Begin with the country of origin. The departure of some people such as the skilled or talented from a poor country might reduce the productivity of others in that country.”
Qualitative differences between those who emigrate and the population of origin may be very large: This is “cream of the crop” vs “bottom of the barrel” issue. This should be obvious with respect to easily measured age and health status for example. The young and stalwart go first. It may be as true with respect to difficult to measure but obviously existing qualities such as the propensity to take economic risks, for example. Thus, I would be surprised if current Mexican illegal immigrants to the US where not economically more desirable immigrants than their own siblings of the same sex who stayed put. I mean more desirable from my viewpoint, someone who is already inside a country of destination. The risks the illegals took to move act like a beneficial sift in this respect, it seems to me.
Periodically African immigrants drown off Lampedusa in the Mediterranean just for a chance to set foot in the EU where medial jobs expect them. They all have close relatives living in the same economic circumstance at home who did not join them.*
The author calls these considerations a kind of externalities and mentions that they are difficult to measure. Difficult to measure does not mean non-existent; it does not even mean small, as he implies. Passion is also difficult to measure, and so is the wrath of a woman scorned. Neither is small in any sense of the word. Stuff that you do not enter into the equation does not show up in the results except in an unclear, residual sort of way. Those who should be in charge of measuring them, the government bureaucracies of countries of origin, are often inept, corrupt, uninterested or discouraged from doing so by government that prefer slogans to facts. Yet, that’s no reason to write these thing off from our thinking.
2 Author asks sensibly:
“Is productivity mostly about who you are, or where you are?”
Productivity clearly has a lot to do with where you are. (Take a man’s shovel in Sonora, teach him how to drive a backhoe in Brooklyn….) I don’t know what the proportions are between it and the answer to the “who” question but I think it would be absurd to set the “who” at zero. Even national origin may matter on the average: If you absolutely must choose between an unknown Englishman and an unknown Frenchman for a cook, which would you chose?
3 Author is too quick to dismiss the argument of impoverishment caused by emigrants’ departure in their countries of origin. He even uses a logically flawed argument, I think:
“But if human capital externalities from health workers were a first order determinant of basic health conditions, African countries experiencing the largest outflows of doctors and nurses would have systematically worse health conditions than other parts of Africa. In fact, those countries have systematically better health conditions (Clemens, 2007).”
Or, is it more likely that: African countries possessing quality health personnel training programs enjoy superior health conditions as a result (I am thinking vaccinations) and some of the health personnel they train are employable in rich countries.
By the way, this raises the general problem of losing at – least temporarily – the benefits associated with the cost of rearing labor. When a Filipina arrives in the US at 19, ready to work in a hospital, the fact is that I contributed nothing to the cost of bringing her up to that point. Someone else has, in the Philippines, most likely. It’s possible that on the average, the home remittances of such immigrant workers more than covers the cost of rearing and training them. I don’t know if it’s true, or how often. I would like to find out.
Author’s savant discussion of externalities seems (seems) to conclude that even if there is a loss to the country of origin, not much can be done. Of course, something can be done: Let the country of destination pay fees to someone or something in the country of origin that supported the cost of training the immigrant worker; in other words, re-imburse at low cost the expense incurred in creating an unearned benefit in the country of destination.
4 Policy makers in Europe are much exercised over the “lifeboat effect.” Even if immigrants’ arrival results in superior economic growth, even if it solves long term problems, as in Social Security, a sudden influx of large numbers may quickly overwhelm destination societies. It may markedly lower their standards of living. (Think of elementary school classes suddenly crowded with children who don’t know the teachers’ language.) I did not find that this article deals with this matter except between the lines, in an implied manner.
[Wholly theoretical Figure 1 does not help me with this although I am attracted to its curves.]
5 Author does his job as an economist well. He writes about the economics of emigration/immigration and he reports on solid research within the constraints of the discipline of economics discourse. But here are also political consequences of immigration we are free to discuss on this blog. (That’s what blogs are for, I think.) This is especially true for a libertarian blog because it poses squarely the problem of national boundaries, of the respect they are owed or not, of their convenience or inconvenience vis-a-vis libertarian aspirations.
Political consequences of immigration loom large in the imaginations of many people in the countries of destination. The manifestations of their concern are not all vacuous or ignorant, or hysterical. The 8 million Swiss -including many immigrants – may have good reason to wonder how many people they can absorb who think that separation of church and state is not only a bad idea but a major sin. Many French people of old French origin are openly racist. Among those responsible French people who are not racist at all, it’s common to worry about the short-term consequences of the legitimate burden high fertility immigrants place on their already sinking welfare system. (The high fertility is documented; it’s not a rumor.) Many American conservatives are worried about Mexican immigrants’ high propensity to vote Democratic. In the end, it’s possible to imagine a scenario where, in combination with other factors,** Mexican immigration helps turn the United States become a one-party state for all intents and purposes. Incidentally, I like Mexicans and I think they make first-rate immigrants. See my co-author articled with Nikiforov on my – Facts Matter – blog.
Sometimes, author handles humor a little too lightly: “Mayda (2006) finds that it is the wealthier, better educated, and less nationalist individuals in rich destination countries who have more favorable attitudes toward immigration.” Sure thing, I am thinking! They want a steady supply of maids and gardeners.
* As some readers already know ad nauseam, I am an immigrant myself. I had four siblings brought up in pretty much the same micro and macro environments as I. They all shared my mediocre level of educational attainment (high school or less). Three of my siblings never tried to move to a richer country as I did; another tried and failed. The difficulties inherent in emigration must select in favor of the desperate, the brave, and of the sociopathic. (Ask me for a good recent book on the latter.)
** The Republican Party’s current striking political incompetence (small p) looms large on my mind as I write this