The Economic Impact of International Labor Migration: Recent Estimates and Policy Implications

Abstract

In this essay, I survey the economic theory and the most recent empirical evidence of the economic impact of international labor migration. Estimates of the magnitude of the gains that the world could enjoy by liberalizing international migration indicate that even partial liberalization would not only produce substantial increases in the world's real income but also improve its distribution. The gains from liberalization would be distributed such that if we examine the effects on natives in the countries of immigration, on the migrants, and on those left behind in the countries of emigration, we find that each group would enjoy significant gains. Furthermore, estimates of the impact of immigration on native workers in the United States indicate that only the least skilled native workers suffer adverse effects and that these effects are small. Thus, although the economic effects of immigration on native workers and distributive justice among natives are often advanced as reasons to reduce immigration, these concerns do not provide a sound justification for our restrictive immigration laws. Instead, the appropriate response to concerns about the distribution of income among natives is to increase the progressivity of our tax system. Protectionist immigration policies are not only likely to be relatively costly as an instrument for redistribution but also perverse from the standpoint of global justice. Thus, considerations of economic efficiency and distributive justice both militate in favor of liberalized immigration policies.

Keywords: Immigration Law, Labor Economics, Economics, International Trade

JEL Classification: F22, J61, K