Tuesday, March 24, 2015

On the case of Open Borders

Last Monday at the American libertarian blog The Volokh Conspiracy, Ilya Somin made a post announcing his support for the thesis of the Open Borders NGO that migration should be as unhindered as possible. Linking to various authors' arguments in favour of this thesis, Somin makes the argument that the tendency worldwide should be not to raise barriers to migration but to lower them.

As the Open Borders Manifesto notes, and as I have said in the past, most open borders advocates do not claim that the right to free migration is absolute and always trumps opposing considerations. Just as I reject absolute property rights or absolute freedom of speech, so too I reject absolute rights to free migration. But we do believe there should be a strong presumption in favor of free migration that can only be overcome by strong evidence that restriction is the only way to prevent a harm great enough to outweigh the vast benefits of freedom to natives and migrants alike.

Many of the commenters at the Volokh Conspiracy are unconvinced, arguing that the author underestimates the costs involved. I myself am undecided about the thesis: There do seem to be great potential gains in GDP globally if there was a freer global market in labour alongside other global markets, but I'm also quite aware that there could be significant political costs if these associated migrations ever became problematic.

What do you, readers of Demography Matters, think of the argument?


Cicerone said...

Surely for an individual there are undoubtedly benefits when migrating (otherwise one wouldn't do it, would one?), but the point that is missing here is that a free movement of people would lead to a rapidly dwindling pool of talents in developing countries. When they always see their most skilled people run away, they will never get the chance to develop.

Free borders in the end make the difference between rich and poor regions more extreme, since the best and brightest will go to places where they will earn the most money, or in other words, places where already many bright and talented people are.

It basically boils down into a discussion about the common good vs. the individual good. Which matters more? If only the individual good matters, then open borders is the way to go. But that would leave the poor and unskilled in the dust.

John Lee said...

Cicerone: the "brain drain" hypothesis is fairly testable, however. Did it prove harmful for the development of countries like Germany, Italy, Poland, and Ireland that so many of their people emigrated to the US in the 19th century (when the US had open borders)? Is the migration of their people retarding today the development of India or China? Would it be conducive to the development of troubled municipalities like Detroit in the US or the banlieues of Paris if their inhabitants were forced to stay there and work on developing the locality, instead of seeking opportunity elsewhere? I have never heard sound arguments for answering these questions in the affirmative, and for promoting mobility restrictions as a development policy.

For a pretty wonky analysis of why open borders is an important but also politically-nigh-on-impossible cause, I highly recommend economist Lant Pritchett's free book Let Their People Come, published by the Center for Global Development. This from Pritchett sums it up quite well to me:

"There are 10 million people in the Sahelian country of Niger; if there were globally free labor mobility and only 1 million lived in Niger now, how many people would move there? Though some people might say that this creates a case for more aid or freer trade, it is hard to believe that if people moved out of Kansas because farming was no longer an attractive opportunity, then the best that can be done for the people of Niger or Chad is that they get slightly more assistance and slightly better prices for the items they grow."

Colin said...

I'm in favour of open borders as an ethically preferable situation, and if we lived in a world where all countries had roughly equal economic development and social provision and stable exchange rate, there wouldn't be any practical hurdles. If we wanted, we could have free migration right now between say the EU and Canada, and both sides would benefit. If we want to work towards open borders, perhaps bilateral agreements like this are a good place to start.

Things get a lot more dicey though when it comes to free movement where there's a huge disparity in income levels. The PPP differences in income are drastic enough, but the difference in nominal incomes at current exchange rates create even larger distortions. For instance a migrant from Argentina to the US may end up downgrading from a middle-class job to a menial job, and actually be worse off in terms of his quality of life (now that he has to pay for rent, food and so on at US prices, not to mention the cost to his social life), but if he can save even a fraction of his income, it could still be worth it for his family because the remittances become immensely valuable in terms of purchasing power when converted back into Argentine pesos.

Jeff Rigsby said...

I think it's useful to apply some basic economic concepts to thinking about this question. The strongest argument for cross-border labor migration is the opportunity to generate welfare gains by arbitraging wage differentials, which in the case of migration from poor countries to rich ones are extremely large.

On the other hand, migration also generates externalities for the receiving country: some positive, some negative.

To a certain extent those externalities are an artefact of the welfare state. (High-income migrants pay more in tax than they consume in public services, so their presence is a gain to native-born residents over and above the value of the labor they provide. For low-income migrants, the externality is a negative one.)

But some immigration-related externalities would exist even in a counterfactual universe with no tax and transfer system at the national level. It's reasonable to believe, for example, that linguistic homogeneity is a type of public good and that migration between countries with different languages diminishes its value.

Finally, there's an issue of distribution. High-skilled immigrants will tend to reduce wage inequality in the receiving country, while low-skilled immigrants will tend to increase it. (It's quite possible, though, that even high-skilled immigration may end up increasing overall income inequality, by increasing the share of land in national income. I don't know whether anyone has tried to model that effect, but concerns about the cost of housing are clearly a major factor in the popular objections to high levels of immigration.)

I think there's a strong case to be made that the ideal immigration policy for rich countries would be "open borders" with three major caveats:

* that the migrants not be eligible for citizenship or permanent residence, and perhaps (in the case of unskilled workers) be required to leave for good after some lifetime maximum of time in country;

* that migrants be ineligible from most benefits of the welfare state (in lieu of becoming a charge on the national health system, for example, they might be required to purchase private insurance from their own earnings through an Obama-style mandate);

* that migrants be charged a very high fee for work visas (some large fraction of what a full-time employee can earn at the minimum wage), with the resulting revenue used to subsidize public services or the wages of low-skilled native workers.

This might be as near as anyone can come to a Pareto improvement on the status quo.