If people were money: estimating the potential gains from increased international migration

This paper examines the potential economic gains from increased international migration. It expands on the findings of an existing applied equilibrium model that generated estimates of the efficiency gains that the world might expect to reap from increased migration. In particular, it explores in depth the results on the actual number of migrants being generated by the various scenarios of the model, and the per-migrant cost/benefits associated with each.

Findings include:

• the model tends to generate very large flows of migrants across international borders: even in the most reasonable scenario, the model generates 44 million migrants (or about 5% of the native population in the developed world)
• worldwide efficiency gains from this level of migration are also very large: if people were money, and enjoyed the same freedom of mobility enjoyed by finance today, the world could expect an efficiency gain as high as US$ 3.4 trillion
• the per-migrant gains generated by the model are much larger than those generated by an influential study of American conditions
• these consequences hinge critically on their distribution, an aspect of the model which remains underdeveloped
• liberalising immigration restrictions may provide the fastest and easiest ways of diminishing international wage gaps
• an adjusted version of the model aimed at generating lower per-migrant gains produces much smaller estimates for both migrant flows and efficiency gains. However, even in this case the estimated efficiency gains from increasing migration are remarkably large
• the original model estimates are not unreasonable, and its empirically-grounded input estimates would make it preferable to the adjusted model

[adapted from author]