4 thoughts on “The economic case for migration”

  1. Posted 08/02/2016 at 21:17 | Permalink

    Good article, cheers. I liked the bit where you wondered if bureaucrats were really the best people to decide what skilled workers the country needs. Does this mean that people who want points-based systems for immigrants are left wing because it requires more government, in this case in planning and setting the requirements when policies that require less governmental involvement are available?

  2. Posted 09/02/2016 at 07:33 | Permalink

    So “If people take decisions on the basis of their own economic self-interest, this will maximise overall welfare.” Really?

    Muslims (apart from those from oil rich Gulf states) benefit from migrating to Europe for the simple reason that wages are higher in Europe than most Muslim countries. Quite how that benefits Europe is a mystery given that the proportion of Muslims who go out to work and who are skilled is far lower than that of the average European. See:

    https://twitter.com/RalphMus/status/677354863022444546

  3. Posted 09/02/2016 at 09:51 | Permalink

    By focusing on ‘immigration’ as a homogeneous good, monotonic in benefit, this post strawmans the opposing the argument. Very few people would dispute that immigration can have benefits – the hypothetical addition of one highly-skilled foreigner to a workforce would surely be of benefit. The chief questions, not addressed here, are whether (1) there is an optimal level of immigration, beyond which its benefits decline, and potentially become negative; (2) whether the composition of immigration shapes the optimal level. I think most people, including many economists, would agree that there are positive answers to both of these questions, although a reasonable argument to be had over what the optimal level and mix of immigration should be.

    The unconditional application of free trade logic to immigration is obviously nonsense, for the same reasons that labour markets are routinely regulated in ways which we know would be bad policy for goods and services markets – you have to rent and not own, you have various extensive duties of care, etc. We don’t treat people like cattle, as the old saying goes.

    In the same way, when an importer brings a good or service into the country, they or their customer are responsible for its proper use and disposal. An employer of migrants cannot take such a full responsibility. They employ a person, and that person and their family then accrue some bundle of rights for which society as a whole is responsible. For that reason, there are substantial external costs to the decision to recruit migrant workers, and it inevitably creates public policy concerns.

    Contra the strawman implied here, there is nothing incompatible between these observations and a commitment to market-oriented public policy. If your concern is with the epistemological constraints on central planning, then the adoption of market mechanisms – e.g. auctioned work permits limited to a publicly agreed quantity, or permits priced to cover the marginal social cost – would allow for market decision-making over the content of immigration, while ensuring that externalities were fully covered.

  4. Posted 17/02/2016 at 21:36 | Permalink

    It seems to me that concentrating on the GDP per head measure of the economic impact of immigration only tells us one part of the story. Even if we accept that GDP is the best measure of economic activity (which is not 100 clear), it doesn’t take into account accumulated wealth represented by personal investments, infrastructure, etc. and the number of people this is shared between. Let me give an example – let’s say the population grows by (say) 10% in a year due to immigration and this raises GDP by 11% over what it would otherwise have been. Has it made us richer per head? in GDP terms, yes. However, our investments in schools, hospitals, roads, etc. would now be shared between 10% more people, so in terms of these we would be about 10% worse off – and the value of all these things clearly exceeds one year’s GDP. Has anyone made any calculations taking this factor into account?

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