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Do Migration Restrictions Matter?

Author

Listed:
  • Gustavo Ventura
  • Paul Klein

Abstract

Migration restrictions are pervasive and severe. Their worldwide enactment starting in the 1920's constituted a fundamental policy shift for a number of countries and for the world as whole. Yet, very little is currently known about the quantitative consequences of these barriers to labor mobility, and their significance vis-a-vis capital mobility. In this paper, we ask: quantitatively, what are the consequences for allocations and welfare of reducing or eliminating barriers to international migration? We answer this question in a life-cycle model of the world economy in which capital is endogenously accumulated, and both capital and labor are potentially mobile. Heterogeneous individuals decide when and whether to migrate given current and future prices. Output is produced using three inputs: capital, labor and land. The presence of a fixed factor (land) enables us to distinguish the effects of capital and labor mobility. Preliminary calculations show that restrictions do matter: their removal leads to significant increases in world's output and capital stock, and to sizeable increases in the welfare of natives of poor countries.

Suggested Citation

  • Gustavo Ventura & Paul Klein, 2004. "Do Migration Restrictions Matter?," Econometric Society 2004 North American Winter Meetings 506, Econometric Society.
  • Handle: RePEc:ecm:nawm04:506
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    Citations

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    Cited by:

    1. Eric Ng & John Whalley, 2008. "Visas and work permits: Possible global negotiating initiatives," The Review of International Organizations, Springer, vol. 3(3), pages 259-285, September.
    2. Clemens, Michael A. & Montenegro, Claudio E. & Pritchett, Lant, 2008. "The place premium : wage differences for identical workers across the US border," Policy Research Working Paper Series 4671, The World Bank.
    3. Francesco Caselli & James Feyrer, 2007. "The Marginal Product of Capital," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 535-568.
    4. Monge-Naranjo, Alexander, 2016. "Openness and the Optimal Taxation of Foreign Know-How," Working Papers 2016-20, Federal Reserve Bank of St. Louis.
    5. Alexander Monge-Naranjo, 2012. "Knowledge Spillovers and The Optimal Taxation of Multinational Firms," 2012 Meeting Papers 593, Society for Economic Dynamics.
    6. Ariel T. Burstein & Alexander Monge-Naranjo, 2009. "Foreign Know-How, Firm Control, and the Income of Developing Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 124(1), pages 149-195.
    7. Francesc Ortega, 2004. "Immigration and the survival of the welfare state," Economics Working Papers 815, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Monge-Naranjo, Alexander, 2016. "Markets, Externalities, and the Dynamic Gains of Openness," Working Papers 2016-23, Federal Reserve Bank of St. Louis, revised 01 Nov 2016.

    More about this item

    Keywords

    Capital Mobility; Migration; Cross-Country Income Differences.;

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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