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Gains from Trade versus Gains from Migration: What Makes Them So Different?

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  • PETER J. HAMMOND
  • JAUME SEMPERE

Abstract

Would unrestricted “economic” migration enhance the potential gains from free trade? With free migration, consumers' feasible sets become non‐convex. Under standard assumptions, however, Walrasian equilibrium exists for a continuum of individuals with dispersed ability to afford each of a finite set of possible migration plans. Then familiar conditions ensuring potential Pareto gains from trade also ensure that free migration generates similar supplementary gains, relative to an arbitrary status quo. As with the gains from customs unions, however, wealth may have to be redistributed across international borders.

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  • Peter J. Hammond & Jaume Sempere, 2006. "Gains from Trade versus Gains from Migration: What Makes Them So Different?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(1), pages 145-170, January.
    • Handle: RePEc:bla:jpbect:v:8:y:2006:i:1:p:145-170
    DOI: 10.1111/j.1467-9779.2006.00256.x
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    3. Gabriel Felbermayr & Wilhelm Kohler, 2014. "Can International Migration Ever Be Made a Pareto Improvement?," World Scientific Book Chapters, in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 11, pages 373-393, World Scientific Publishing Co. Pte. Ltd..
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