mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Immigration Restrictions Cost World Trillions

Economist Michael A. Clemens states something that ought to be well known but for some reason isn’t:  that restrictions on the free movement of labor are more costly than any other existing limits on freedom.  That doesn’t mean there’s much to be done anytime soon.  You can download the whole text of the article here, the abstract is below.

What is the greatest single class of distortions in the global economy? One contender for this title is the tightly binding constraints on emigration from poor countries. Vast numbers of people in low-income countries want to emigrate from those countries but cannot. How large are the economic losses caused by barriers to emigration? Research on this question has been distinguished by its rarity and obscurity, but the few estimates we have should make economists’ jaws hit their desks. The gains to eliminating migration barriers amount to large fractions of world GDP—one or two orders of magnitude larger than the gains from dropping all remaining restrictions on international flows of goods and capital. When it comes to policies that restrict emigration, there appear to be trillion-dollar bills on the sidewalk.

Features Icon
show comments
  • Brock

    The problem is democracy with universal franchise cannot assimilate and educate unlimited numbers of immigrants. Just look how emigrants from California and Massachusetts take their failed blue state policies with them and vote to recreate those failures in Texas and New Hampshire. Now multiply that a million fold as people come from even worse run countries (Latin America, the Middle East, Africa) in greater numbers.

    Unlimited immigration combined with universal franchise would not produce wealth. It would spread bad ideas from bad countries to good countries like an infectious plague.

  • Kenny

    Easy on this immigration business, Mr. Mead.

    Just because the elite of the developed countries might want Third World labor migration does not mean the average person does.

    And it is more than GNP. After all, man does not live by bread alone. An influx of Third Worlders changes the culture and usually not for the better. Have the Turks improve the culture of Germany, the Moslems to culture of Europe, the Mexicians the culture of the U.S.? I’d say definitely no.

  • boqueronman

    Wow! Common sense… out the window!

    Here’s Milton Friedman’s take on unrestricted emigration “I am in favor of the unilateral reduction of tariffs, but the movement of goods is a substitute for the movement of people. As long as you have a welfare state, I do not believe you can have a unilateral open immigration. I would like to see a world in which you could have open immigration, but stop kidding yourselves.” But, hey, who do you believe, some guy named Milton Friedman or the world renowned… Michael A. Clemens?

    So let’s look at the numbers from The Heritage Foundation. “The transfer state redistributes funds from those with high-skill and high-income levels to those with lower skill levels. Low-skill immigrants become natural recipients in this process. On average, low-skill immigrant families receive $30,160 per year in government benefits and services while paying $10,573 in taxes, creating a net fiscal deficit of $19,587 that has to be paid by higher-income taxpayers.” These numbers can be disputed but the cost burden is clear.

    Perhaps more importantly open emigration puts pressure on a low-profile, limited government model. Such an emigration policy, which puts large numbers of low-skill, low-income immigrants in the West, not only creates new beneficiaries for government transfers, but new voters likely to support even greater transfers in the future.

    Also, does anybody actually believe that, for example, China and Japan would institute “open emigration” policies? Bwahahaha! If not, then all the assimilation problems are borne by the EU and U.S. (no wait we have a political parties and a “Progressive” ideology which totally and completely reject assimilation in Europe and the U.S. and who wish to balkanize these territories with multi-culti enclaves). Luckily there is NO possibility of social conflict because…

    This guy Clemens should be ashamed of himself. This is the equivalent of writing a scholarly report on why the economists on the deserted island would be better off if they “assumed a can opener” to open the food tins. Yes, we could assume assimilation and wait 2-3 generations for income gaps to close. But would such a shock to the system allow adequate time for such an adjustment without the cultural clashes reversing any potential gains? The answer seems obvious.

    Or is this “study” just an inside joke? The economists equivalent of exercising shrimp on a treadmill.

  • Tom Holsinger

    Not to mention those who emigrate from richer countries to poorer ones, like the three million Germans who emigrated to the USSR on June 22, 1941.

    Furthermore richer people should always share with poorer ones when asked.

    Abolish national borders and disparities in wealth!

  • Corlyss

    I wonder how this article squares the fact that low-income countries produce semi-skilled and unskilled, often illiterate, workers while the advanced economies have fewer and fewer jobs for those kinds of workers. We can’t get enough skilled people in to the US to satisfy a need that we cannot fill at home because the education system is dumber and more inept than the students it graduates. With only 3% of the population producing our farm products, and illegals perched on the construction trades, how many more unskilled and semi-skilled people can we afford on unemployment?

  • Jacksonian Libertarian

    If you give a man a fish, you feed him for a day, if you teach a man to fish, you feed him for a lifetime.
    Tough love demands that the poor people of failed cultures and states, remain where they are until they learn how to fish from our example, and are no longer poor people of failed cultures and states, but proud fishermen.

  • Corlyss

    Or is this “study” just an inside joke?”
    My experience in trying to find statistics and studies on illegal immigration as it affects the US is this: it’s like gun control. There are no unbiased studies. They all start from a pro or con stance, and then set out to prove they are right. That makes them very hard to offer up as evidence one way or the other. The gushing enthusiasts won’t accept cons’ facts, while the cautious cons are convinced the pros’ evidence is skewed. Damned annoying, that.

  • peter38a

    How about if we did it intelligently, well, that would leave out any “progressive” input, but what if?

    What if we said any European entrepreneur meeting certain criteria e.g. time in business, money in bank could immigrate to this country immediately. I read (source not remembered) that we’d have ten million willing over night. And I cite European because they bring a Western cultural background with them which is as valuable as the economics.

    Could it be done? Certainly, we have given special dispensations to teachers and nurses from the Philippines off and on as the need arises for years.

  • Luke Lea

    “Economist Michael A. Clemens states something that ought to be well known but for some reason isn’t: that restrictions on the free movement of labor are more costly than any other existing limits on freedom. ”

    I hope you don’t seriously subscribe to this utopian libertarian point-of-view? Free mobility of labor — all 6 billion people in the world heading towards the money — would decimate the living standards of ordinary working people in Europe and America. It would also destroy our societies in the process.

    On the up side, the ten thousand or so wealthiest families in the world would become immeasurably richer and more powerful. Corporations would rule, literally.

    Tell me it ain’t so, Walter. You haven’t by chance dropped a tab of acid lately have you in search of your long-lost youth? Maybe while listening to that old hippy anthem John Lennon used to sing?

  • Jim

    The writer has hit on one of the soft spots in libertarian thought. Sure I wish countries would embrace and teach the principles and dignity of free markets. But a society is more than just trade and innovation. It is a culture.

    Especially with a welfare state, we do not integrate folks well. Mexican should be relatively easy to do so; they are hard working, religious and dedicated to family.

    Yet we find most immigrates struggle to even learn English which is a huge barrier, most times for a generation. In Norway, they separate immigrants in schools for up to 2 years as they learn the language. We would never do that here, and it does not address the issue for the parents.

    If we are going to allow more immigration, then we need to get rid of our post-modern outlook and help those folks become a part of the USA.

    As a small example, I have met the Russian, Pole, and German communities in my area who have married Americans, some to first generation folks from their own countries. 90+% of them are divorced, and end up impoverishing their husbands, children and struggling for a generation.

    This is no longer the era of two acres and a mule.

  • Grant

    California seems to have tried this. So who wants to send their kid to the average school filled with third world immigrants in LA? Any takers? This is easy for the elites to argue, but if you are say a carpenter or a dry wall hanger, suddenly getting undercut by dirt cheap labor means a business you have built for decades can collapse quickly.

    Let’s have a trial run first. End tenure and import as many cheap academics as we can from countries like India and China so we can gauge the effects of unhindered, mass immigration on a test population. I am sure the academic class will welcome the new competition under the enlightened spirit of diversity and global comradeship.

  • Jeff77450

    Two or three years ago there was an article in _The Economist_ about a study that had been done that determined that, long-term, the U.S. could support about 200,000,000 people. A single study, by itself, doesn’t conclusively prove anything. Still, just based on my being stuck in traffic I’m inclined to believe it. Then there’s the 44,000,000 Americans on food-stamps which lends further support.

    The era of America needing large amounts of unskilled labor ended decades ago.

  • Tom Holsinger

    Abolish the nation-state!

    Abolish disparities in wealth!

    Ein Reich, Ein Volk, Ein Fuhrer!

  • Mick The Reactionary


    “Let’s have a trial run first. End tenure and import as many cheap academics as we can from countries like India and China so we can gauge the effects of unhindered, mass immigration on a test population. I am sure the academic class will welcome the new competition under the enlightened spirit of diversity and global comradeship.”

    A test run? What kind of subversive idea this is? Are you racist or something?

    It is NOT how we do things in Post-Nation, post American Good Old USA. We jump into pool head first to find if there is any water there.

    It is much better, more progressive way.
    Ask any Ruling Class apparatchik, ask any academician, ask professor Mead. They will tell you.

  • Alex

    Emigration of poverty spreads poverty. The developed countries are getting less productive and burdened with higher anti-poverty/discrimination costs due to their transformation into third world countries.

  • Jim.

    Without an honest synergy / congestion analysis, this paper is so deeply flawed as to be useless. If we assume that people will move until an “equilibrium of utility” state is reached, then people would crowd into (say) the San Fransisco Bay Area until it became as unpleasant to live in as Kabul (or pick your own nightmare destination). The paragraph on page 93 that dismisses these concerns out of hand as much as admits that economics in general (and this author in particular) is largely ignorant of the magnitude of these problems, and simply assumes them away.

    This paper also makes the critical mistake universal among economists: that human beings are gas molecules, whose behavior can be evaluated with thermodynamic-style cycles or trivial “efficiencies”.

    Even taken at it word, it is deeply misleading. Look at Figure 1, for example. It draws a high-wealth country’s “wage curve” (whatever that bit of quasi-mathematical economic voodoo means) such that wages only drop a fraction — 10%, maybe — when unchecked labor competition occurs.

    Is this reasonable in any real-world example? What’s the wage difference between union shops in Michigan against the free labor competition in right-to-work states? (It’s factor of two or three, if I’m not mistaken.) There are industries in this country (skilled construction, particularly) that saw their incomes go from middle-class to minimum-wage with immigrant competition. Maybe this averages out to 1-2% when you dilute it across the whole economy, but is that little trick valid when you assume billions of people moving around, in every vocation? If industry after industry faced the same pressure, wouldn’t that instead cause an undiluted wage collapse of 50% or more across the entire economy?

    While professionals *might* only see a marginal cut in what they can demand against unlimited H1Bs (software engineers in Silicon Valley, for instance), that is by no means applicable to the vast reservoirs of unskilled or semiskilled labor on this planet.

    In the H1B case, what would the writers of these papers make of the fact that many talented individuals from India are being coaxed back to their country of origin by promises of drivers, hordes of servants, and a higher standard of living than in America? It’s not the money, remember. It’s everything you can *buy* with the money. Wishing to keep this class of worker leads to wage parity or supremacy *within the country-of-origin*, compared to emigration.

    The fact is that any gains this world makes MUST involve people assimilating into useful (and more productive) enterprises, with the values and behaviors (and education) required for success there. It MUST involve consumption of whatever resources that economic activity requires. If these factors are not respected, believing that there are “trillion-dollar bills on the sidewalk” is magical thinking that will be as destructive as “safe as houses”, or massive public credit. Lean on it too much, and everything falls apart.

  • Corlyss

    @ Tom
    “Abolish the nation-state!”

    Right. It’s worked so well in Europe, hasn’t it?

    People are not going to be loyal to, or pay taxes to, or fight to defend, a building that enshrines a bunch of soulless paper-pushers whose only mission is to perpetuate their jobs. NGOs don’t work as a substitue for the state. There is no democracy without the nation-state. There is no effective justice without the nation-state. Bureaucrats can’t represent people or transmit culture, i.e., the stuff of civilization. NGOs are among the most anti-democratic organizations in history. They cannot but end in tyranny.

  • Mick The Reactionary

    Author of this paper, alleged economist Clemens, is from The Center for Global Development.

    From CGD site:
    “GCD works to reduce global poverty and inequality through rigorous research and active engagement with the policy community to make the world a more prosperous, just, and safe place for us all.”

    In other word, Globalist Do-Gooders.

    Global Do-Gooding is not compatible with borders and nationhood.


    Apparatchik from Globalist Do-Gooders think-tank, Mr Clemens
    “states something that ought to be well known but for some reason isn’t: that restrictions on the free movement of labor are more costly than any other existing limits on freedom.”

    It seems Professor Mead thinks that anti-intuitive and non-trivial conclusions of Mr Clemens opus are
    obvious and easy to understand.

    Perhaps. So it would be very easy for someone as talented and with excellent writing skills as Dr Mead to make it clear to run-of-the-mill folks with IQ of about 100-110.

    How about that Dr Mead?

    You have 16 comments, all of which think this opus, you thought so highly about, is a propaganda piece.

    Time to show how wrong the commenters are.

  • OtisMcWrong

    One of the most oft-spewed bits of silliness from the “invite the world” crowd is that being in favor free markets somehow implies being in favor of open borders. In fact, the opposite is true. The basic essence of a free market is two parties willingly participating in a transaction free of coercion. In the case of open borders, one party (the immigrants or their sponsors) is forcing the transaction on the other party (the citizen).

    A country belongs to its citizens. Not to other country’s citizens, or to its government. Assuming that government is merely an administrative extension of the people (hopelessly naive I know, but bear with me), a “free market” structure would seem to preclude most immigration. One half of the transaction (the citizens) have consistently polled overwhelmingly against massive immigration, yet we still have it. In economic terms, we are being forced to participate in these transactions.

    Our reasons for not wanting to participate are not relevant. I’m not asked to justify why I prefer Coke to Pepsi. Why should I be asked to justify why I don’t want millions of 3rd world aliens to move here? The fact that I don’t is enough. I prefer to not participate in this transaction and yet am forced to. Don’t further the indignity by telling me it’s “free market”.

  • Mick The Reactionary


    “One of the most oft-spewed bits of silliness from the “invite the world” crowd is that being in favor free markets somehow implies being in favor of open borders. In fact, the opposite is true. The basic essence of a free market is two parties willingly participating in a transaction free of coercion.”

    An excellent observation. Of course the folks of the USA are not willing participants as indicated by the polls.

    Professor Mead, you thought highly of the opus by Open Borders apparatchik, will you defend it?

    Or you (silently) declared defeat and moved on?

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service