Second generation human capital benefits of migration

Summary: One important element in estimating the benefits of liberalized migration is the effect on the human capital of migrants' children. Taking human capital benefits of childhood in a developed country into account increases estimates of overall benefits, and may favor permanent migration relative to temporary guest worker programs. I discuss human capital benefits in health, language competence, educational attainment, gender equality, and attachment to location. Benefits are largest and important for immigrants with initially low human capital. Some but not all of these benefits can be attained using retained earnings of temporary migrant workers to help their children at home.

How migration liberalization might eliminate most absolute poverty

Summary: While some estimates that open borders would double gross world product implicitly project the migration of most of the developed country labor force, a much smaller quantity of migration might cut global poverty rates by half or better. The additional income to the poorest required to bring them above extreme poverty lines is in the hundreds of billions of dollars per annum, while doubling world product would approach a hundred trillion dollars of additional annual output. Legal barriers to migration, and blocked desire to migrate, are most extreme for the poorest countries, suggesting extra migrants from those sources. While migrants may receive more income gains than are needed to escape absolute poverty remittances to family, trade, and investment may help to distribute the gains more widely. Overall, the case that migration liberalization for less skilled workers could eliminate most absolute poverty is significantly more robust than the most extreme estimates of global output gains.

What does migration to the United Arab Emirates tell us about labor mobility?

Summary: Some notes on migration to the United Arab Emirates (UAE). As in some other Gulf oil states, e.g. Qatar, almost the entire UAE private sector workforce is composed of foreign guest workers. The ratio of foreign workers to natives is high enough that if achieved by all developed countries it could absorb the labor force of the developing countries. The distribution is dominated by less skilled workers and workers from poor countries, who enjoy much higher wages than at home, but much lower than in countries such as the United States. Emirati tolerance of extremely high immigration may be related to the almost complete insulation of Emirati nationals private labor markets, and the exclusion of migrants from citizenship and access to government revenues. In Dubai, the native population primarily subsists on taxes on the foreign-dominated private sector, enjoying an extremely prosperous standard of living. The UAE shows that truly massive guest worker programs can greatly benefit migrants and natives when politically feasible, and could eventually eliminate most global poverty if broadly imitated. 

Migration levies and unskilled labor mobility in Singapore

Summary: Several advocates of increased labor mobility have suggested taxes on migrants to compensate natives of destination countries for any inconveniences and to increase the reward of accepting more migrants, as a theoretical matter. In practice Singapore already accepts an exceptionally large number of unskilled and less skilled temporary workers, taxes them heavily, and uses the extensive net revenue to make a significant contribution to the public accounts. It appears that Singapore captures most of the economic surplus of migration, although migrants also benefit significantly. However, the system produces great local inequality and has a number of other problems that may outweigh fiscal benefits in its political appeal. While Singaporean migration policy seems much better than most developed countries', it is not first-best from a humanitarian point of view, and the model's value in promoting labor mobility elsewhere is uncertain, although intriguing.

Upward and downward biases in the "double world GDP" estimates of the gains of open borders

Summary: I discuss recent estimates that open borders could double gross world product through increases to migrant productivity. Such a doubling would be extreme, but not out of the range of our experience: it would be equivalent to raising world per capita income to the level of Greece (U.S. levels would quadruple world product), or a couple decades of continued economic growth. However, it would require the great majority of the developing world to migrate. I discuss the migration levels required for the estimates, polling and historical data bearing on migration levels, and population and economic growth trends that affect the estimates. Over several decades, the impact estimates seem too high, requiring implausible quantities and rates of migration, although potential effects remain large. Over the longer term, boosts such as population growth in poor countries and increased education for second generation migrants increase the maximum potential of migration beyond doubling world output, but development in poor countries, changes in place premium, and other changes may reduce gains over time.