The Global Welfare and Poverty Effects of Rich Nation Immigration Barriers

Most rich nations maintain very tight restrictions on immigration despite widespread opening of trade and international capital flows since World War II. This paper uses a two-region, one-sector, dynastic growth model with a continuum of skills to assess the welfare effects and poverty implications of these barriers. Similar to other global studies of migration, I find that rich nation migration barriers impose huge losses on the global economy. This paper also estimates, for the first time to my knowledge, the global poverty implications of those barriers and finds that freeing migration into rich nations would reduce global poverty by at least 40% and as much as 66%. This corroborates the conclusions drawn by others that opening rich nations to freer migration may do more to reduce poverty around the world than any other policy.