The Economic Case for Restricting Migration

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 03.11.2015, 12:15 - 13:30

   

Presentation by 

Michael A. Clemens (Center for Global Development)
   

Abstract:

Past research on the economic effects of migration restrictions has stressed income distribution. In this paper, we consider the new economic case for migration restrictions based on global efficiency. A recent literature has proposed that the impact of migrants on host countries is non-linear and has zero (or perhaps positive) impact at low levels but at some threshold of migration flows the impact on turns negative as the migrant stock reduces total factor productivity. This raises the possibility that migration restrictions at some level could enhance global production. We examine this model’s empirical plausibility and implications for optimal policy. In a simple model, the case for efficiency-enhancing migration barriers rests on three parameters: transmission, the degree to which origin-country total factor productivity ‘comes with’ migrants; assimilation, the degree to which migrants’ productivity determinants become like natives’; and agglomeration, the degree of nonlinearity in the migrant stock effect. On current evidence about the magnitudes of these parameters, economically optimal policy implies limits on migration set at a level that substantially relaxes current draconian restrictions.

   
   
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