Should We Let Them All In? How Immigration Helps the Economy

Release Date
January 13, 2015

Topic

Immigration Politics & Policy
Description

What if we could add trillions of dollars to the global economy and improve the lives of billions of people with a single, unpopular, policy change? Professor Ben Powell explains that the consensus among economists is that free trade between countries creates huge gains in prosperity. The same thing happens when you have free trade in labor- in other words, open immigration.

Sources:
“ If only 5% of the population in poorer countries immigrated to richer countries global incomes would rise by four to nine trillion dollars.”
Clemens, Michael A. 2011. “Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?”Journal of Economic Perspectives, 25(3): 83-106. www.jstor.org/stable/23049424
“When an unskilled Haitian moves to the United States, their pay rises by more than 1000%.”
Clemens, Michael A. 2011. “Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?”Journal of Economic Perspectives, 25(3): 83-106. www.jstor.org/stable/23049424
“Most studies show that on the whole those harms are nonexistent or minor, temporary, and clustered on only a small portion of the population.  Free trade in labor brings economic gains to virtually everyone in the long run.”
“Economic Effects of International Labor Mobility” http://www.depts.ttu.edu/freemarketinstitute/docs/TheEconomicEffectsofInternationalLaborMobility.pdf
Learn More:
Leaving Trillion Dollar Bills on the Sidewalk? Center for Global Development: http://www.cgdev.org/blog/migration-and-trillion-dollar-bills-sidewalk-michael-clemens-0
Interview with Michael Clemens on Aid, Migration, and Poverty: http://www.econtalk.org/archives/2013/07/clemens_on_aid.html
The Fiscal Impact of Immigration: http://www.cato.org/publications/working-paper/fiscal-impact-immigration
fImmigration’s Real Impact on Wages and Employment: http://www.cato.org/blog/immigrations-real-impact-wages-employment

What if I told you I know how to add trillions of dollars to the global economy, and improve the lives of billions of people with a single policy change? Sound too good to be true? Well, I should warn you it’s a policy that people in most rich countries oppose. What is it? Open immigration.
The consensus among economists is that free trade between countries creates huge gains in prosperity. The same thing happens when you have free trade in labor. In other words, more open immigration.
We don’t have to remove all of the barriers to immigration to start to see these gains. If only 5% of the population in poorer countries immigrated to richer countries, global incomes would rise by four to nine trillion dollars. These gains are possible because when you allow workers to move to countries with more economic opportunities, they are able to produce more wealth with the same skills by orders of magnitude. For instance, when an unskilled Haitian moves to the United States, their pay rises by more than 1000%.
Some worry that increased immigration would harm native-born workers. However, most studies show that on the whole these harms are non-existent or minor, temporary, and clustered only on a small portion of the population. Free trade and labor bring economic gains to virtually everyone in the long run.
There’s plenty of room for debate about what a more open immigration policy should look like, but our goal should be clear: to allow more workers to freely move around the world, to where the can be as productive and prosperous as possible.