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

  • Hatton, Timothy J.

    ()

    (University of Essex)

  • Williamson, Jeffrey G.

    ()

    (Harvard University)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2146.

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Length: 39 pages
Date of creation: May 2006
Date of revision:
Publication status: published in T.J. Hatton. K. H. O'Rourke and A. M. Taylor (eds.), The New Comparative Economic History: Essays in Honor of Jeffrey G. Williamson, Cambridge Mass: MIT Press, 2007
Handle: RePEc:iza:izadps:dp2146
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  1. Stanley L. Engerman & Kenneth L. Sokoloff, 2001. "The Evolution of Suffrage Institutions in the New World," NBER Working Papers 8512, National Bureau of Economic Research, Inc.
  2. Kevin O'Rourke, 2003. "Heckscher-Ohlin Theory and Individual Attitudes Towards Globalization," NBER Working Papers 9872, National Bureau of Economic Research, Inc.
  3. Dustmann, Christian & Preston, Ian, 2000. "Racial and Economic Factors in Attitudes to Immigration," CEPR Discussion Papers 2542, C.E.P.R. Discussion Papers.
  4. Kevin O'Rourke, 2007. "Democracy and Protectionism," The Institute for International Integration Studies Discussion Paper Series iiisdp191, IIIS.
  5. Giovanni Facchini & Anna Maria Mayda, 2006. "Individual Attitudes towards Immigrants: Welfare-State Determinants Across Countries," CReAM Discussion Paper Series 0604, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  6. 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.
  7. 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.
  8. 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).
  9. 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, March.
  10. 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, June.
  11. 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).
  12. Richard E. Baldwin & Philippe Martin, 1999. "Two Waves of Globalisation: Superficial Similarities, Fundamental Differences," NBER Working Papers 6904, National Bureau of Economic Research, Inc.
  13. Timothy Hatton, 2005. "Explaining trends in UK immigration," Journal of Population Economics, Springer, vol. 18(4), pages 719-740, November.
  14. Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
  15. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519, March.
  16. 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.
  17. 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.
  18. 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.
  19. repec:rus:hseeco:121615 is not listed on IDEAS
  20. 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.
  21. 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.
  22. Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, M.E. Sharpe, Inc., vol. 47(4), pages 6-16, July.
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