Can immigration save the global economy?
Everywhere you turn - from Europe to China - the signs of an impending global recession are multiplying. A new paper from the National Bureau of Economic Research (paywalled) argues that liberalizing immigration would be a boon for the global economy. Dylan Matthews explains:
University of Wisconsinâ??s John Keenan tries to quantify it in a new paper. He builds a model that assumes that in the absence of restrictions, people will try to maximize income while still feeling some attachment to their native countries, and so some but not all workers will move to where their wages will be highest. He estimates that fully eliminating immigration restrictions worldwide would effectively double the worldâ??s labor supply. This, unsurprisingly, leads to enormous economic growth, such that typical workers in developing countries would see annual wages more than double, from an average of $8,903 today to $19,272 with open borders. That is, the typical worker in the third world would end up making about double the individual poverty line in the United States today. Certain countries have even more astounding results; the typical Nigerian would see gains of $21,940.
Needless to say, such an immigration scheme is unobtainable in today's world. But the world is still leaving a lot of economic growth on the table by bottling up its most important resource.
