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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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References

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  1. Facchini, Giovanni & Mayda, Anna Maria, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants Across Countries," IZA Discussion Papers 2127, Institute for the Study of Labor (IZA).
  2. O'Rourke, Kevin H & Taylor, Alan M, 2006. "Democracy and Protectionism," CEPR Discussion Papers 5698, C.E.P.R. Discussion Papers.
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  4. Dustmann Christian & Preston Ian P, 2007. "Racial and Economic Factors in Attitudes to Immigration," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-41, November.
  5. 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.
  6. 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.
  7. O'Rourke, Kevin H, 2003. "Heckscher-Ohlin Theory and Individual Attitudes Towards Globalization," CEPR Discussion Papers 4018, C.E.P.R. Discussion Papers.
  8. 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.
  9. Anna Maria Mayda, 2006. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 510-530, August.
  10. Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
  11. 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, December.
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  14. 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.
  15. 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.
  16. Mayda, Anna Maria & Rodrik, Dani, 2001. "Why are Some People (and Countries) More Protectionist than Others?," CEPR Discussion Papers 2960, C.E.P.R. Discussion Papers.
  17. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519, October.
  18. Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, M.E. Sharpe, Inc., vol. 47(4), pages 6-16, July.
  19. 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.
  20. 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).
  21. Engerman, Stanley L. & Sokoloff, Kenneth L., 2005. "The Evolution of Suffrage Institutions in the New World," The Journal of Economic History, Cambridge University Press, vol. 65(04), pages 891-921, December.
  22. Boeri, Tito & Hanson, Gordon H. & McCormick, Barry (ed.), 2002. "Immigration Policy and the Welfare System: A Report for the Fondazione Rodolfo Debenedetti," OUP Catalogue, Oxford University Press, number 9780199256310, October.
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