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When We Reject Immigrants, We Reject Trillions of Dollars in Wealth

1 0 9
09.09.2021

Immigration

Veronique de Rugy | 9.9.2021 2:13 PM

Exactly 10 years ago, economist Michael Clemens published a paper in the prestigious Journal of Economic Perspectives called "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?" He urged fellow economists to consider a paradigm shift in their research about immigration. Though economists had mostly neglected the global economic losses caused by migration barriers, the existing estimates "should make economists' jaws hit their desks."

As a fellow at a Washington, D.C., anti-poverty think tank called the Center for Global Development, Clemens suspected this research would reveal that by restricting immigration, the amount of wealth we leave on the table globally is in the trillions of dollars. He notes it's essential to seek a better characterization of the gains to labor mobility globally—gains for the countries to which migrants go and for the countries they leave. He highlighted a few issues economists should explore, including "the magnitude and mechanisms of the effect of workers' location on their productivity, relative to the effect of workers' inherent traits on their productivity." In layperson terms: How much does where you live matter to your productivity?

Thankfully, many economists answered Clemens' call. In fact, it's hard to overstate the importance of this paper and the impact it has had on this field of research.

As George Mason University economist and renowned immigration scholar Bryan Caplan wrote to me, "Before Clemens' seminal paper, even immigration's biggest fans failed to understand the strongest argument for their own position. Namely: Virtually everyone, regardless of skill, is much more productive in the First World than the Third World." And that doesn't just apply to high-skilled immigrants. It also applies to very low-skilled immigrants, who, when they immigrate, can tap into labor markets with efficiently run firms, predictable legal systems, and ample capital (think of a tractor instead of a wooden hoe or an electric saw rather than an ax).

In his illustrated book, Open Borders: The Science and Ethics of Immigration, Caplan asks, "how productive would you be in Haiti?" The answer is not very. Better yet, we now know that immigrants aren't the only beneficiaries of their relocations. Caplan explains: "(Immigrants become) so much more productive,........

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