Another article worthy of note in the current issue of the Journal of Economic Perspectives is a nicely-written, concise survey of the economics of emigration.
The gains from eliminating migration barriers dwarf … the gains from eliminating other types of barriers. For the elimination of trade policy barriers and capital flow barriers, the estimated gains amount to less than a few percent of world GDP. For labor mobility barriers, the estimated gains are often in the range of 50–150 percent of world GDP.
In fact, existing estimates suggest that even small reductions in the barriers to labor mobility bring enormous gains. …. A conservative reading of the evidence …suggests that the emigration of less than 5 percent of the population of poor regions would bring global gains exceeding the gains from total elimination of all policy barriers to merchandise trade and all barriers to capital flows. For comparison, currently about 200 million people—3 percent of the world—live outside their countries of birth. ….
The departure of some [skilled] people … from a poor country might reduce the productivity of others in that country. Such an effect would tend to offset the gains from emigration. Externalities like these are often assumed to be so pervasive that the literature refers to skilled migration with a pejorative catchphrase—“brain drain”—embodying the assumption. (To see why economists should avoid this term, picture reading a journal article on female labor force participation that calls it the “family abandonment rate.”) ….
[Economist have published 13 times as many journal articles on "international trade" as on "international migration", and the migration papers are] focused … more on the relatively small and uncertain effects of remittances and “brain drain” than on the relatively massive and likely global effects of migration—including the benefits for the migrants themselves? …. [Why?] Perhaps the literature focuses on remittances and “brain drain” because those effects more obviously pertain to national welfare than individual welfare.
Michael A. Clemens, “Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?“, Journal of Economic Perspectives 25:3 (Summer 2011), pp. 83-106.
Obsession with national welfare, Clemens writes, is “a grand old tradition in economics”, one that dates from the mercantilists, who wrote long before Adam Smith. Modern economists – despite Adam Smith’s unfortunate use of the term “Wealth of Nations” in the title of his famous book – are supposed to be concerned with individual welfare rather than the wealth or power of nations. (We now leave analysis of the latter to political scientists.)
Michael Clemens is a senior fellow at the Center for Global Development, a Washington, D.C. research institute, where he leads the Migration and Development initiative.
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