Boosting migration builds a clear pathway to economic prosperity

Across the ages, the easiest instinct for any politician to follow whenever immigration rises to the fore in a national debate has almost always been fear.

In the case of the United States, as columnist Bret Stephens recently pointed out in The New York Times, this goes back to the country’s very origins. As they crafted the new nation’s earliest immigration rules, America’s leaders were driven by worries that people of other faiths would swamp the Protestants who they saw as defining the country’s essence.

One need not look very hard around the world to find parallels to notions of fixed core identity based on race, colour and religion or to see political classes bar or sharply limit immigration — even when their countries badly need new workers to overcome labour shortages driven by population decline or ageing. Japan is the most extreme example of this, but it is hardly alone. The contemporary political debate in the United States and much of Europe is driven to varying degrees by nativism, which is often little more than a polite way of saying racism.

Today in the United States, efforts to suppress immigration are associated most strongly with the Republicans. But despite that party’s efforts to depict Democrats as the party of “open” immigration, the United States has expelled about 50 million would-be immigrants to the country since 1965, or roughly the same number of immigrants who currently live in the country. These expulsions have been robustly pursued not only by Republicans but also by Democrats, from Bill Clinton to Barack Obama to Joe Biden.

Even when advancing major reforms, as with the Immigration and Nationality Act of 1965, which lessened de facto discrimination against people of many nationalities, liberal Democrats have nodded to racial fears. Ted Kennedy, then a liberal senator from Massachusetts, for example, felt it necessary to pledge that the new law “will not inundate America with immigrants from … the most populated and economically deprived nations of Africa and Asia”.

This pattern of allowing fear and prejudice to dominate the political discussion around migration is admittedly hard to break, but a growing body of economic research could help. It makes clear that the costs of pandering or giving in to racism when fashioning immigration policy are staggering to rich and poor alike.

In fact, there is probably no more dramatic way of increasing human prosperity in both the receiving societies and in those that generate large population flows than by significantly loosening restrictions on international migration.

I first became aware of this idea years ago through the writings of an economist named Charles Kenny. Whether one is positively disposed to greater immigration or not, it makes intuitive sense to almost everyone in the rich world that opening their borders more widely to people from poorer countries would improve the economic lot of those who immigrate.

But what truly surprised me in reading Kenny’s 2011 book, Getting Better: Why Global Development Is Succeeding — and How We Can Improve the World Even More, was something completely counterintuitive: that “migration to the developed world is perhaps potentially the most powerful force of all for improving the quality of life of people in poor countries”. (Italics mine.)

Kenny was building on the work of others that goes even further, and I believe persuasively so. Among them is Michael Clemens, the author of a 2011 paper with a particularly well-chosen title: “Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?” For decades, mainstream economic policy in the West has held that the most powerful way to increase global prosperity is by reducing barriers to both trade and capital flows. Until very recently, this dogma utterly dominated US economic diplomacy as well as the policies of Western-led institutions such as the World Bank and International Monetary Fund.

The money on the sidewalk in the title of Clemens’ paper refers to the growth and common prosperity the world sacrifices by not pushing a similar openness on questions of migration. “The gains from eliminating migration barriers dwarf — by an order of magnitude or two — the gains from eliminating other types of barriers,” Clemens wrote. “For the elimination of trade policy barriers and capital flow barriers, the estimated gains amount to less than a few per cent of world GDP. For labour mobility barriers, the estimated gains are often in the range of 50-150% of world GDP.”

Even more interesting, given that almost no one envisions a radical easing of restrictions, Clemens wrote that even emigration of less than 5% of the population of the world’s poor regions to richer countries would produce more gains than the long-sought elimination of barriers to the flow of goods and capital.

Over the past decade or so, such notions have inched their way from the periphery of research economics, where migration’s effects have traditionally received relatively little attention, to the mainstream, with such organisations as the Organization for Economic Co-operation and Development and think tanks as politically varied as the Cato and Aspen institutes emphasising the importance of freer migration to growth. What has not happened is politicians in the world’s wealthy countries taking up this cudgel, replacing fear with gain in discussions of immigration policies.

America’s political class, including Democrats, has been pitifully weak on this front, despite powerful evidence that immigration is far less disruptive, economically or socially, than prominent figures such as the far-right broadcaster Tucker Carlson claim, and in fact produces very strong fiscal and productivity dividends. As I have previously written, less restrictive immigration would help the United States in everything from funding a pending avalanche of so-called entitlement costs related to the retirement of the baby boom generation to competition with China, whose population has entered a period of unprecedentedly fast ageing and shrinking.

The reason that even many progressive politicians are loathe to place more open immigration front and centre in their platforms is that nativist attitudes in the United States and other countries rest on powerfully seductive myths. Chief among these is that non-whites are less capable of assimilating into American society and less capable of contributing economically than so-called legacy Americans, as commentators like Carlson have termed the predominantly European newcomers whom generations of immigration law explicitly favoured.

A newly published book titled Streets of Gold: America’s Untold Story of Immigrant Success, by Ran Abramitzky and Leah Boustan, economists at Stanford and Princeton universities respectively, takes on these myths and demolishes them one by one. During the last generation or so, white Americans have grudgingly revised their views of immigrants in limited and selective ways, coming to recognise (and in some cases fear) people from certain places, particularly China and India, as fully capable of excelling in the United States as their new land of adoption. Sometimes this gives way to a new form of racism in which members and descendants of these immigrant communities are described as “model minorities” to set them apart from other people of colour.

Using abundant data, Abramitzky and Boustan show these new prejudices have little basis in fact and make clear that almost without distinction, all immigrants arrive in the United States primed to work hard to catch up with others economically and to contribute. “Children of immigrants from nearly every country in the world, including from poorer countries like Mexico, Guatemala and Laos, are more upwardly mobile than the children of US-born residents who were raised in families with a similar income level,” they write, adding that “immigrants today move up the economic ladder at the same pace as European immigrants did in the past”.

They do so well, in fact, that even children from very poor countries, including those from the places most demonised for contributing to the so-called crisis on the southern US border, perform comparably to the children of immigrants from rich countries like, say, Canada.

Equally eye-opening, the authors show that “immigrants to the United States from nearly every country of origin have more skills or resources than others in their home country”. Take India ($1927 income per capita): the authors note that “77% of Indian-born immigrants to the United States hold college degrees today, compared to only 8% of residents of India”. More impressive still is Nigeria ($2097 income per capita), whose citizens the authors call “the most educated population in the United States, with 81% holding at least a college degree”, compared with only 10% of the people of that West African country who enrol in post-high school education.

This points not only to the need to confront deeply held racial prejudices in the rich world but also to the urgent need to renovate US foreign policy towards the African continent, which will see the greatest population growth in the world during the remainder of this century and become the overwhelmingly largest source of new working-age people during this time span.

The United States may not be able to build physical infrastructure like railways and airports on a scale to compete with China in Africa, but it should devote far more energy and resources to improving soft public goods like healthcare and especially education on the continent. Washington still has important competitive advantages in these areas, and there are both altruistic and selfish arguments for pursuing these goals — the very definition of doing well by doing good.

Many will ask: what about brain drain? One of the most persuasive answers to this misunderstood issue was given to me by Kofi Bentil, senior vice-president and policy analyst at the Imani Center for Policy and Education, a Ghanaian think tank, while I was doing research for my book China’s Second Continent. The West, Bentil said, “needs us for our people [and] I, for one, don’t believe in brain drain. If Ghanaian doctors are leaving the country, what we should do is train more doctors. We need to make that a business of the future.”

This view coincides strongly with the research of economists like Clemens, which shows that the African countries that generate the most migration among medical workers also have relatively better healthcare than those that scarcely produce professional migrants like these. Clemens’ theoretical insight is an important one. We have long thought far too narrowly in considering the possible benefits to developing countries of emigration, focusing almost exclusively on the financial remittances that overseas workers send to their families back home.

Many already recognise the willingness of migrants from poor countries to strive upon arrival in rich countries to improve their lot. The very possibility of emigration, though, may quietly produce this effect on an even larger scale within poor societies themselves. As Clemens writes, not all of those in the developing world who invest in themselves as they dream of building new lives in richer societies ultimately leave their countries of origin. Yet the very existence of emigration as an option spurs them to “raise the human capital stock at home”.

By keeping the door so narrowly closed, the rich countries of the world not only cut themselves off from growth and renewal but also snuff out billions of dreams in countries whose domestic economies give little reason for hope.