IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp9789.html
   My bibliography  Save this paper

Bounding the Price Equivalent of Migration Barriers

Author

Listed:
  • Clemens, Michael A.

    (George Mason University)

  • Montenegro, Claudio

    (University of Chile)

  • Pritchett, Lant

    (Harvard Kennedy School)

Abstract

Large international differences in the price of labor can be sustained by differences between workers, or by natural and policy barriers to worker mobility. We use migrant selection theory and evidence to place lower bounds on the ad valorem equivalent of labor mobility barriers to the United States, with unique nationally-representative microdata on both U.S. immigrant workers and workers in their 42 home countries. The average price equivalent of migration barriers in this setting, for low-skill males, is greater than $13,700 per worker per year. Natural and policy barriers may each create annual global losses of trillions of dollars.

Suggested Citation

  • Clemens, Michael A. & Montenegro, Claudio & Pritchett, Lant, 2016. "Bounding the Price Equivalent of Migration Barriers," IZA Discussion Papers 9789, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9789
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp9789.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Caselli, Francesco, 2005. "Accounting for Cross-Country Income Differences," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 9, pages 679-741, Elsevier.
    2. Michèle V. K. Belot & Timothy J. Hatton, 2012. "Immigrant Selection in the OECD," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1105-1128, December.
    3. Cynthia Feliciano, 2005. "Educational selectivity in U.S. Immigration: How do immigrants compare to those left behind?," Demography, Springer;Population Association of America (PAA), vol. 42(1), pages 131-152, February.
    4. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
    5. Guildo W. Imbens, 2003. "Sensitivity to Exogeneity Assumptions in Program Evaluation," American Economic Review, American Economic Association, vol. 93(2), pages 126-132, May.
    6. Williamson, Jeffrey G., 1999. "Real wages, inequality and globalization in latin america before 1940," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 17(S1), pages 101-142, March.
    7. Gita Gopinath & Pierre-Olivier Gourinchas & Chang-Tai Hsieh & Nicholas Li, 2011. "International Prices, Costs, and Markup Differences," American Economic Review, American Economic Association, vol. 101(6), pages 2450-2486, October.
    8. Birdsall, N. & Graham, C. & Pettinato, S., 2000. "Stuck in the Tunnel: Is Globalization Muddling the Middle Class?," Papers 14, Brookings Institution - Working Papers.
    9. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
    10. Michael Clemens & Claudio Montenegro & Lant Pritchett, 2008. "The Place Premium: Wage Differences for Identical Workers across the U.S. Border," Working Papers 148, Center for Global Development.
    11. James R. Hines, 1999. "Three Sides of Harberger Triangles," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 167-188, Spring.
    12. Fernando Ramos, 1992. "Out-Migration and Return Migration of Puerto Ricans," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 49-66, National Bureau of Economic Research, Inc.
    13. Alfonso Irarrazabal & Andreas Moxnes & Luca David Opromolla, 2015. "The Tip of the Iceberg: A Quantitative Framework for Estimating Trade Costs," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 777-792, October.
    14. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 869-924, December.
    15. Burda, Michael C, 1995. "Migration and the Option Value of Waiting," CEPR Discussion Papers 1229, C.E.P.R. Discussion Papers.
    16. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    17. Orrenius, Pia M. & Zavodny, Madeline, 2005. "Self-selection among undocumented immigrants from Mexico," Journal of Development Economics, Elsevier, vol. 78(1), pages 215-240, October.
    18. Dustmann, Christian & Mestres, Josep, 2010. "Remittances and temporary migration," Journal of Development Economics, Elsevier, vol. 92(1), pages 62-70, May.
    19. Alex Armstrong & Frank D. Lewis, 2012. "International migration with capital constraints: interpreting migration from the Netherlands to Canada in the 1920s," Canadian Journal of Economics, Canadian Economics Association, vol. 45(2), pages 732-754, May.
    20. Orley Ashenfelter, 2012. "Comparing Real Wage Rates: Presidential Address," American Economic Review, American Economic Association, vol. 102(2), pages 617-642, April.
    21. Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-335, December.
    22. David McKenzie & John Gibson & Steven Stillman, 2010. "How Important Is Selection? Experimental vs. Non-Experimental Measures of the Income Gains from Migration," Journal of the European Economic Association, MIT Press, vol. 8(4), pages 913-945, June.
    23. Caselli, Francesco, 2005. "Accounting for cross-country income differences," LSE Research Online Documents on Economics 5266, London School of Economics and Political Science, LSE Library.
    24. Jaeger, David A, 1997. "Reconciling the Old and New Census Bureau Education Questions: Recommendations for Researchers," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(3), pages 300-309, July.
    25. Branko Milanovic, 2015. "Global Inequality of Opportunity: How Much of Our Income Is Determined by Where We Live?," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 452-460, May.
    26. Ashenfelter, Orley, 2012. "Comparing Real Wage Rates," IZA Discussion Papers 6500, Institute of Labor Economics (IZA).
    27. Hillel Rapoport, 2002. "Migration, credit constraints and self-employment: A simple model of occupational choice, inequality and growth," Economics Bulletin, AccessEcon, vol. 15(7), pages 1-5.
    28. Barry R. Chiswick & Paul W. Miller, 2012. "Negative and Positive Assimilation, Skill Transferability, and Linguistic Distance," Journal of Human Capital, University of Chicago Press, vol. 6(1), pages 35-55.
    29. Sebastian Edwards, 1999. "How Effective Are Capital Controls?," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 65-84, Fall.
    30. Friedberg, Rachel M, 2000. "You Can't Take It with You? Immigrant Assimilation and the Portability of Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 221-251, April.
    31. repec:pri:indrel:dsp01t435gd01h is not listed on IDEAS
    32. J. B. Taylor & Harald Uhlig (ed.), 2016. "Handbook of Macroeconomics," Handbook of Macroeconomics, Elsevier, edition 1, volume 2, number 2.
    33. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    34. Daniel Chiquiar & Gordon H. Hanson, 2005. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 239-281, April.
    35. Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2006. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 7, pages 307-458, Elsevier.
    36. Catalina Amuedo-Dorantes & Cynthia Bansak & Susan Pozo, 2005. "On the remitting patterns of immigrants: evidence from Mexican survey data," Economic Review, Federal Reserve Bank of Atlanta, vol. 90(Q 1), pages 37-58.
    37. J. William Ambrosini & Karin Mayr & Giovanni Peri & Dragos Radu, 2015. "The selection of migrants and returnees in Romania," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(4), pages 753-793, October.
    38. Timothy J. Hatton & Jeffrey G. Williamson, 2006. "International Migration in the Long Run: Positive Selection, Negative Selection, and Policy," Springer Books, in: Rolf J. Langhammer & Federico Foders (ed.), Labor Mobility and the World Economy, pages 1-31, Springer.
    39. Bernt Bratsberg, 2002. "School Quality and Returns to Education of U.S. Immigrants," Economic Inquiry, Western Economic Association International, vol. 40(2), pages 177-198, April.
    40. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    41. González, Felipe & Miguel, Edward, 2015. "War and local collective action in Sierra Leone: A comment on the use of coefficient stability approaches," Journal of Public Economics, Elsevier, vol. 128(C), pages 30-33.
    42. Robert Kaestner & Ofer Malamud, 2014. "Self-Selection and International Migration: New Evidence from Mexico," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 78-91, March.
    43. David McKenzie & Hillel Rapoport, 2010. "Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 811-821, November.
    44. William J. Collins & Marianne H. Wanamaker, 2014. "Selection and Economic Gains in the Great Migration of African Americans: New Evidence from Linked Census Data," American Economic Journal: Applied Economics, American Economic Association, vol. 6(1), pages 220-252, January.
    45. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    46. Katarzyna B. Budnik, 2009. "Rationality of Post-Accession Migration," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 57-83.
    47. George J. Borjas, 1991. "Immigration and Self-Selection," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 29-76, National Bureau of Economic Research, Inc.
    48. Barham, Bradford & Boucher, Stephen, 1998. "Migration, remittances, and inequality: estimating the net effects of migration on income distribution," Journal of Development Economics, Elsevier, vol. 55(2), pages 307-331, April.
    49. Ran Abramitzky & Leah Platt Boustan & Katherine Eriksson, 2012. "Europe's Tired, Poor, Huddled Masses: Self-Selection and Economic Outcomes in the Age of Mass Migration," American Economic Review, American Economic Association, vol. 102(5), pages 1832-1856, August.
    50. Rosenzweig, Mark R., 2010. "Global Wage Inequality and the International Flow of Migrants," Working Papers 77, Yale University, Department of Economics.
    51. Abhijit V. Banerjee & Esther Duflo, 2008. "What Is Middle Class about the Middle Classes around the World?," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 3-28, Spring.
    52. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    53. repec:ebl:ecbull:v:15:y:2002:i:7:p:1-5 is not listed on IDEAS
    54. Halliday, Timothy, 2006. "Migration, Risk, and Liquidity Constraints in El Salvador," Economic Development and Cultural Change, University of Chicago Press, vol. 54(4), pages 893-925, July.
    55. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-987, December.
    56. Dani Rodrik & Mark Rosenzweig (ed.), 2010. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 5, number 6.
    57. Lutz Hendricks, 2002. "How Important Is Human Capital for Development? Evidence from Immigrant Earnings," American Economic Review, American Economic Association, vol. 92(1), pages 198-219, March.
    58. David Hummels, 2007. "Transportation Costs and International Trade in the Second Era of Globalization," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 131-154, Summer.
    59. Abowd, John M. & Freeman, Richard B. (ed.), 1991. "Immigration, Trade, and the Labor Market," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226000954, September.
    60. Christian Dustmann & Tommaso Frattini & Anna Rosso, 2015. "The Effect of Emigration from Poland on Polish Wages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 522-564, April.
    61. Akee, Randall, 2011. "Errors in self-reported earnings: The role of previous earnings volatility and individual characteristics," Journal of Development Economics, Elsevier, vol. 96(2), pages 409-421, November.
    62. Manning, Willard G., 1998. "The logged dependent variable, heteroscedasticity, and the retransformation problem," Journal of Health Economics, Elsevier, vol. 17(3), pages 283-295, June.
    63. Benjamin Elsner, 2013. "Does emigration benefit the stayers? Evidence from EU enlargement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 531-553, April.
    64. Kaivan Munshi, 2003. "Networks in the Modern Economy: Mexican Migrants in the U. S. Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 549-599.
    65. Vollrath, Dietrich, 2009. "How important are dual economy effects for aggregate productivity?," Journal of Development Economics, Elsevier, vol. 88(2), pages 325-334, March.
    66. J. M. Finger & A. J. Yeats, 1976. "Effective Protection by Transportation Costs and Tariffs: A Comparison of Magnitudes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 169-176.
    67. Caselli, Francesco, 2005. "Accounting for cross-country income differences," LSE Research Online Documents on Economics 3567, London School of Economics and Political Science, LSE Library.
    68. Rooth, Dan-Olof & Saarela, Jan, 2007. "Selection in migration and return migration: Evidence from micro data," Economics Letters, Elsevier, vol. 94(1), pages 90-95, January.
    69. Michael A. Clemens, 2011. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 83-106, Summer.
    70. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tjaden, Jasper & Dunsch, Felipe Alexander, 2021. "The effect of peer-to-peer risk information on potential migrants – Evidence from a randomized controlled trial in Senegal," World Development, Elsevier, vol. 145(C).
    2. Biavaschi, Costanza & Burzyński, Michał & Elsner, Benjamin & Machado, Joël, 2020. "Taking the skill bias out of global migration," Journal of Development Economics, Elsevier, vol. 142(C).
    3. Parag Mahajan & Dean Yang, 2020. "Taken by Storm: Hurricanes, Migrant Networks, and US Immigration," American Economic Journal: Applied Economics, American Economic Association, vol. 12(2), pages 250-277, April.
    4. Clemens, Michael A., 2021. "Violence, development, and migration waves: Evidence from Central American child migrant apprehensions," Journal of Urban Economics, Elsevier, vol. 124(C).
    5. Michael A. Clemens & Hannah M. Postel, 2018. "Deterring Emigration with Foreign Aid: An Overview of Evidence from Low‐Income Countries," Population and Development Review, The Population Council, Inc., vol. 44(4), pages 667-693, December.
    6. Michael A. Clemens & Hannah Postel, 2017. "Temporary work visas as US-Haiti development cooperation: a preliminary impact evaluation," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-18, December.
    7. Lant Pritchett, 2018. "Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth," Working Papers 479, Center for Global Development.
    8. Maud HAZAN & Claire ZANUSO & Rafael NOVELLA, 2018. "Aspirations, attentes et réalités de la jeunesse dans un Etat fragile : le cas haïtien," Working Paper 98e53f2a-19d2-4649-a3e5-6, Agence française de développement.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael A. Clemens & Claudio E. Montenegro & Lant Pritchett, 2019. "The Place Premium: Bounding the Price Equivalent of Migration Barriers," The Review of Economics and Statistics, MIT Press, vol. 101(2), pages 201-213, May.
    2. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    3. Ran Abramitzky & Leah Boustan, 2017. "Immigration in American Economic History," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1311-1345, December.
    4. 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.
    5. Gröger, André, 2021. "Easy come, easy go? Economic shocks, labor migration and the family left behind," Journal of International Economics, Elsevier, vol. 128(C).
    6. Jaschke, Philipp & Keita, Sekou, 2021. "Say it like Goethe: Language learning facilities abroad and the self-selection of immigrants," Journal of Development Economics, Elsevier, vol. 149(C).
    7. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    8. Hanson, Gordon H., 2010. "International Migration and the Developing World," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4363-4414, Elsevier.
    9. Clemens, Michael A. & Mendola, Mariapia, 2020. "Migration from Developing Countries: Selection, Income Elasticity, and Simpson's Paradox," IZA Discussion Papers 13612, Institute of Labor Economics (IZA).
    10. Parag Mahajan & Dean Yang, 2020. "Taken by Storm: Hurricanes, Migrant Networks, and US Immigration," American Economic Journal: Applied Economics, American Economic Association, vol. 12(2), pages 250-277, April.
    11. Moav, Omer & Gould, Eric, 2008. "When is "Too Much" Inequality Not Enough? The Selection of Israeli Emigrants," CEPR Discussion Papers 6955, C.E.P.R. Discussion Papers.
    12. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 869-924, December.
    13. Spitzer, Yannay & Zimran, Ariell, 2018. "Migrant self-selection: Anthropometric evidence from the mass migration of Italians to the United States, 1907–1925," Journal of Development Economics, Elsevier, vol. 134(C), pages 226-247.
    14. Clemens, Michael A. & Pritchett, Lant, 2019. "The new economic case for migration restrictions: An assessment," Journal of Development Economics, Elsevier, vol. 138(C), pages 153-164.
    15. Leopold, Stefan & Ruhose, Jens & Wiederhold, Simon, 2023. "Why is the Roy-Borjas model unable to predict international migrant selection on education? Evidence from urban and rural Mexico," IWH Discussion Papers 16/2023, Halle Institute for Economic Research (IWH).
    16. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    17. Fernández-Huertas Moraga, Jesús, 2013. "Understanding different migrant selection patterns in rural and urban Mexico," Journal of Development Economics, Elsevier, vol. 103(C), pages 182-201.
    18. Mariele Macaluso, 2022. "The influence of skill-based policies on the immigrant selection process," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 595-621, July.
    19. Michael A. Clemens, 2019. "Measuring the Spatial Misallocation of Labor: The Returns to India-Gulf Guest Work in a Natural Experiment," Working Papers 501, Center for Global Development.
    20. Elsner, Benjamin & Narciso, Gaia & Thijssen, Jacco J. J., 2013. "Migrant Networks and the Spread of Misinformation," IZA Discussion Papers 7863, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    migration; growth; impact; GDP; tariff; quota; deadweight; cost; visa; barrier; price; wedge;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp9789. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.