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Open Borders

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  • John Kennan

Abstract

There is a large body of evidence indicating that cross-country differences in income levels are associated with differences in productivity. If workers are much more productive in one country than in another, restrictions on immigration lead to large efficiency losses. The paper quantifies these losses, using a model in which efficiency differences are labor-augmenting, and free trade in product markets leads to factor price equalization, so that wages are equal across countries when measured in efficiency units of labor. The estimated gains from removing immigration restrictions are huge. Using a simple static model of migration costs, the estimated net gains from open borders are about the same as the gains from a growth miracle that more than doubles the income level in less-developed countries.

Suggested Citation

  • John Kennan, 2012. "Open Borders," NBER Working Papers 18307, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18307
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    References listed on IDEAS

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    Cited by:

    1. Marco DELOGU & Frédéric DOCQUIER & Joël MACHADO, 2013. "The dynamic implications of liberalizing global migration," LIDAM Discussion Papers IRES 2013029, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    2. Costanza Biavaschi & Michal Burzynski & Benjamin Elsner & Joël Machado, 2016. "The Gain from the Drain - Skill-biased Migration and Global Welfare," RF Berlin - CReAM Discussion Paper Series 1624, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    3. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2017. "Immigrant labor market integration across admission classes," RF Berlin - CReAM Discussion Paper Series 1702, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    4. Jan Ditzen, 2014. "Economic Growth and Migration," SEEC Discussion Papers 1406, Spatial Economics and Econometrics Centre, Heriot Watt University.
    5. John Kennan, 2014. "Freedom of movement for workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-86, September.
    6. Biavaschi, Costanza & Elsner, Benjamin, 2013. "Let's Be Selective about Migrant Self-Selection," IZA Discussion Papers 7865, Institute of Labor Economics (IZA).
    7. Marco Delogu & Frédéric Docquier & Joël Machado, 2018. "Globalizing labor and the world economy: the role of human capital," Journal of Economic Growth, Springer, vol. 23(2), pages 223-258, June.
    8. Zimmermann, Klaus F., 2013. "Reflexionen zur Zukunft der Arbeit," IZA Standpunkte 56, Institute of Labor Economics (IZA).
    9. Davide Gandolfi & Timothy Halliday & Raymond Robertson, 2017. "Trade, FDI, migration, and the place premium: Mexico and the United States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(1), pages 1-37, February.
    10. Zimmermann, Klaus F., 2013. "The Mobility Challenge for Growth and Integration in Europe," IZA Policy Papers 69, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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