August 21, 2012
The Washington Post’s Dylan Matthews reports on a new paper from the (US) National Bureau of Economic Research (£), which examines what would happen if all immigration restrictions were dropped.
[University of Wisconsin’s John Keenan] 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 world’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.