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

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Author Info
Timothy J. Hatton
Jeffrey G. Williamson

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Abstract

Today's labor-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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11866.

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Date of creation: Dec 2005
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Handle: RePEc:nbr:nberwo:11866

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Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
J1 - Labor and Demographic Economics - - Demographic Economics
O1 - Economic Development, Technological Change, and Growth - - Economic Development

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hatton, Timothy J., 2003. "Explaining Trends in UK Immigration," CEPR Discussion Papers 4019, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Kevin O'Rourke, 2003. "Heckscher-Ohlin Theory and Individual Attitudes Towards Globalization," NBER Working Papers 9872, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. 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. [Downloadable!] (restricted)
    Other versions:
  4. Kevin O'Rourke, 2007. "Democracy and Protectionism," The Institute for International Integration Studies Discussion Paper Series iiisdp191, IIIS. [Downloadable!]
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  5. Hilary W. Hoynes & Marianne E. Page & Ann Huff Stevens, 2006. "Poverty in America: Trends and Explanations," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 47-68, Winter. [Downloadable!] (restricted)
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  6. Mayda, Anna Maria & Rodrik, Dani, 2005. "Why are some people (and countries) more protectionist than others?," European Economic Review, Elsevier, vol. 49(6), pages 1393-1430, August. [Downloadable!] (restricted)
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  7. Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May. [Downloadable!] (restricted)
  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. [Downloadable!]
  9. Dustmann, Christian & Preston, Ian, 2000. "Racial and Economic Factors in Attitudes to Immigration," IZA Discussion Papers 190, Institute for the Study of Labor (IZA). [Downloadable!]
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  10. Mayda, Anna Maria, 2004. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," IZA Discussion Papers 1115, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. Kevin H. O'Rourke & Richard Sinnott, 2004. "The Determinants of Individual Attitudes Towards Immigration," Trinity Economics Papers 20042, Trinity College Dublin, Department of Economics. [Downloadable!]
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  12. 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, November. [Downloadable!]
  13. Richard E. Baldwin & Philippe Martin, 1999. "Two Waves of Globalisation: Superficial Similarities, Fundamental Differences," NBER Working Papers 6904, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. 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). [Downloadable!]
  15. 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. [Downloadable!] (restricted)
  16. repec:rus:hseeco:121615 is not listed on IDEAS
  17. 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. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hatton, Timothy J. & Williamson, Jeffrey G, 2006. "What Determines Immigrations' Impact? Comparing Two Global Centuries," CEPR Discussion Papers 5885, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Susana Iranzo & Giovanni Peri, 2007. "Migration and Trade in a World of Technological Differences: Theory with an Application to Eastern-Western European Integration," NBER Working Papers 13631, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Timothy J. Hatton & Andrew Leigh, 2007. "Immigrants Assimilate as Communities, Not Just as Individuals," IZA Discussion Papers 2538, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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