Immigration and Globalization: A Review Essay

A question lies at the core of any examination of the link between immigration and globalization: what exactly would a world without national borders—a world in which people could move freely from one country to another—look like? Economists have, in fact, devoted a lot of effort to documenting how international differences in economic conditions change as national governments lower the barriers that limit trade across countries. Much of international trade theory attempts to imagine what happens to employment, prices, and incomes when countries allow unrestricted flows of goods and capital across national boundaries. One common theme in these models, which has greatly influenced economic policy, is that the removal of restrictions on such flows increases global income and tends to equalize prices and wages across countries. Decades of experience with various trade liberalization policies, however, do not seem to have had as much of an impact on global income or on international wage inequality as the proponents of free trade would have expected. This fact has motivated some economists to consider yet another scenario: the removal of immigration restrictions that prevent the movement of people across countries. The modeling of economic adjustments resulting from unrestricted international migration adds greatly to the complexity of describing what would happen in such a world: How many persons would move? What would economic conditions in the new borderless world look like? What would happen to the institutions and social norms that govern economic exchanges in specific countries after the entry/exit of perhaps hundreds of millions of people? Would the institutions that presumably led to efficient exchanges in the richer countries remain dominant and Immigration and Globalization: A Review Essay †