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

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  • Hatton, Timothy J.

    (University of Essex)

  • Williamson, Jeffrey G.

    (Harvard University)

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.

Suggested Citation

  • Hatton, Timothy J. & Williamson, Jeffrey G., 2006. "A Dual Policy Paradox: Why Have Trade and Immigration Policies Always Differed in Labor-Scarce Economies?," IZA Discussion Papers 2146, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2146
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    References listed on IDEAS

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    Cited by:

    1. Hatton, Timothy J. & Williamson, Jeffrey G., 2008. "The Impact of Immigration: Comparing Two Global Eras," World Development, Elsevier, vol. 36(3), pages 345-361, March.
    2. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
    3. Gordon H. Hanson, 2009. "The Economic Consequences of the International Migration of Labor," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 179-208, May.
    4. Timothy Hatton & Andrew Leigh, 2011. "Immigrants assimilate as communities, not just as individuals," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(2), pages 389-419, April.
    5. Paola Conconi & Giovanni Facchini & Max F. Steinhardt & Maurizio Zanardi, 2020. "The political economy of trade and migration: Evidence from the U.S. Congress," Economics and Politics, Wiley Blackwell, vol. 32(2), pages 250-278, July.
    6. Hatton, Tim & Williamson, Jeffrey G., 2006. "What Determines Immigrations' Impact? Comparing Two Global Centuries," CEPR Discussion Papers 5885, C.E.P.R. Discussion Papers.
    7. Iranzo, Susana & Peri, Giovanni, 2009. "Migration and trade: Theory with an application to the Eastern-Western European integration," Journal of International Economics, Elsevier, vol. 79(1), pages 1-19, September.
    8. Vladimir Gligorov, 2009. "Mobility and Transition in Integrating Europe," Human Development Research Papers (2009 to present) HDRP-2009-15, Human Development Report Office (HDRO), United Nations Development Programme (UNDP), revised Apr 2009.
    9. Timothy J. Hatton, 2010. "The Cliometrics Of International Migration: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 24(5), pages 941-969, December.
    10. Junko Doi & Laixun Zhao, 2012. "Immigration Conflicts," Discussion Paper Series DP2012-29, Research Institute for Economics & Business Administration, Kobe University, revised Dec 2012.
    11. Giorgio Bellettini & Carlotta Berti Ceroni, 2008. "Can Unions Hurt Workers? A Positive Analysis Of Immigration Policy," Economics and Politics, Wiley Blackwell, vol. 20(1), pages 106-124, March.
    12. Massey, Catherine G., 2016. "Immigration quotas and immigrant selection," Explorations in Economic History, Elsevier, vol. 60(C), pages 21-40.
    13. Jin, Zhangfeng, 2020. "Welfare Magnets and Internal Migration in China," GLO Discussion Paper Series 498, Global Labor Organization (GLO).
    14. Panizzon, Marion, 2010. "Standing Together Apart: Bilateral Migration Agreements and the Temporary Movement of Persons under “Mode 4” of GATS," Papers 34, World Trade Institute.
    15. 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.
    16. Iranzo, Susana & Peri, Giovanni, 2009. "Migration and trade: Theory with an application to the Eastern-Western European integration," Journal of International Economics, Elsevier, vol. 79(1), pages 1-19, September.
    17. Gianmarco I. P. Ottaviano & Giovanni Peri, 2016. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 2, pages 35-80 World Scientific Publishing Co. Pte. Ltd..

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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