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A Dual Policy Paradox: Why Have Trade and Immigration Policies Always Differed in Labour-Scarce Economies?

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  • Hatton, Timothy J.
  • Williamson, Jeffrey G

Abstract

Today's labour-scarce economies have open trade and closed immigration policies, while a century ago they had just the opposite, open immigration and closed trade policies. Why the inverse policy correlation, and why has it persisted for almost two centuries? This paper seeks answers to this dual policy paradox by exploring the fundamentals which have influenced the evolution of policy: the decline in the costs of migration and its impact on immigrant selectivity, a secular switch in the net fiscal impact of trade relative to immigration, and changes in the median voter. The paper also offers explanations for the between-country variance in voter anti-trade and anti-migration attitude, and links this to the fundamentals pushing policy.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5443.

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Date of creation: Jan 2006
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Handle: RePEc:cpr:ceprdp:5443

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Keywords: history; immigration restriction; policy; tariffs;

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  1. Christian Dustmann & Ian Preston, 2004. "Racial and Economic Factors in Attitudes to Immigration," CReAM Discussion Paper Series 0401, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  2. Stanley L. Engerman & Kenneth L. Sokoloff, 2001. "The Evolution of Suffrage Institutions in the New World," NBER Working Papers 8512, National Bureau of Economic Research, Inc.
  3. Timothy J. Hatton & Jeffrey G. Williamson, 2008. "Global Migration and the World Economy: Two Centuries of Policy and Performance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582775.
  4. Facchini, Giovanni & Mayda, Anna Maria, 2006. "Individual Attitudes Towards Immigrants: Welfare-State Determinants Across Countries," CEPR Discussion Papers 5702, C.E.P.R. Discussion Papers.
  5. O'Rourke, Kevin H. & Sinnott, Richard, 2006. "The determinants of individual attitudes towards immigration," European Journal of Political Economy, Elsevier, vol. 22(4), pages 838-861, December.
  6. Anna Maria Mayda (Georgetown University) and Dani Rodrik (Harvard University), 2005. "Why are some people (and countries) more protectionist than others?," Working Papers gueconwpa~05-05-11, Georgetown University, Department of Economics.
  7. Kevin H. O'Rourke & Alan M. Taylor, 2006. "Democracy and Protectionism," NBER Working Papers 12250, National Bureau of Economic Research, Inc.
  8. Anna Maria Mayda (Georgetown University), 2005. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes towards Immigrants," Working Papers gueconwpa~05-05-10, Georgetown University, Department of Economics.
  9. Wellisch, Dietmar & Walz, Uwe, 1998. "Why do rich countries prefer free trade over free migration? The role of the modern welfare state," European Economic Review, Elsevier, vol. 42(8), pages 1595-1612, September.
  10. Tim Hatton, 2004. "Explaining Trends in UK Immigration," ANU Working Papers in Economics and Econometrics 2004-440, Australian National University, College of Business and Economics, School of Economics.
  11. Richard E. Baldwin & Philippe Martin, 1999. "Two Waves of Globalisation: Superficial Similarities, Fundamental Differences," NBER Working Papers 6904, National Bureau of Economic Research, Inc.
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  13. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
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  15. Kevin H. O'Rourke, 2003. "Heckscher-Ohlin Theory and Individual Attitudes Towards Globalization," The Institute for International Integration Studies Discussion Paper Series iiisdp07, IIIS.
  16. Christian Dustmann & Ian Preston, 2004. "Is Immigration Good or Bad for the Economy? Analysis of Attitudinal Responses," CReAM Discussion Paper Series 0406, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  17. Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, M.E. Sharpe, Inc., vol. 47(4), pages 6-16, July.
  18. John H. Coatsworth & Jeffrey G. Williamson, 2002. "The Roots of Latin American Protectionism: Looking Before the Great Depression," NBER Working Papers 8999, National Bureau of Economic Research, Inc.
  19. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519.
  20. Timothy J. Hatton, 2000. "How much did immigrant "quality" decline in late nineteenth century America?," Journal of Population Economics, Springer, vol. 13(3), pages 509-525.
  21. Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
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