Illegal Immigration: The Host-Country Problem

What can the pure theory of international trade tell us about international migration? I have long found it curious that, although migration is a central feature of the international economy and has been for a long time, and although regional economists have devoted considerable attention to the phenomenon, it has never received from the pure theory of international trade more than a small fraction of the attention lavished on the theory of international capital movements. No doubt part of the reason for this is the widely appreciated fact that much of the latter is in effect a theory of factor movements, if for no better reason than that nothing which might distinguish one factor from another is allowed to play a significant role. Thus, one might argue, we do in fact have a significant literature on migration: all that is necessary is that the word “capital” be replaced by “labor” in much of the theory of international capital movements. Indeed, a good part of what trade theorists have written about migration has in effect done just that, with labor distinguished in no essential way from other factors. This approach to migration is all to the good, as far as it goes. It does, after all, give us a useful theory, and it gives us that theory on the cheap. But we are quite noticeably without a theory addressed in any substantive way to those aspects of migration that are distinctive to it…