The labor market effects of immigration and emigration from OECD countries

Here is a new paper by Frédéric Docquier, Çaglar Ozden & Giovanni Peri, forthcoming in Economic Journal:

In this paper, we quantify the labor market effects of migration flows in OECD countries during the 1990’s based on a new global database on the bilateral stock of migrants, by education level. We simulate various outcomes using an aggregate model of labor markets, parameterized by a range of estimates from the literature. We find that immigration had a positive effect on the wages of less educated natives and it increased or left unchanged the average native wages. Emigration, instead, had a negative effect on the wages of less educated native workers and increased inequality within countries.

A gated version of the paper is here, ungated versions are here.

Yes, I am familiar with how these models and estimates work, and yes you can argue back to a “we really can’t tell” point of view, if you are so inclined.  But you cannot by any stretch of the imagination argue to some of the negative economic claims about immigration that you will find in the comments section of this blog and elsewhere.

And no I do not favor open borders even though I do favor a big increase in immigration into the United States, both high- and low-skilled.  The simplest argument against open borders is the political one.  Try to apply the idea to Cyprus, Taiwan, Israel, Switzerland, and Iceland and see how far you get.  Big countries will manage the flow better than the small ones but suddenly the burden of proof is shifted to a new question: can we find any countries big enough (or undesirable enough) where truly open immigration might actually work?

In my view the open borders advocates are doing the pro-immigration cause a disservice.  The notion of fully open borders scares people, it should scare people, and it rubs against their risk-averse tendencies the wrong way.  I am glad the United States had open borders when it did, but today there is too much global mobility and the institutions and infrastructure and social welfare policies of the United States are, unlike in 1910, already too geared toward higher per capita incomes than what truly free immigration would bring.  Plunking 500 million or a billion poor individuals in the United States most likely would destroy the goose laying the golden eggs.  (The clever will note that this problem is smaller if all wealthy countries move to free immigration at the same time, but of course that is unlikely.)

For the initial pointer I thank Kevin Lewis.