Kyle Fitzgibbons

Refugees might be the face of migration in the media, but 90 percent of the world’s 247 million migrants have moved across borders voluntarily, usually for economic reasons. Voluntary migration flows are typically gradual, placing less stress on logistics and on the social fabric of destination countries than refugee flows. Most voluntary migrants are working-age adults, a characteristic that helps raise the share of the population that is economically active in destination countries.

Moving more labor to higher-productivity settings boosts global GDP. Migrants of all skill levels contribute to this effect, whether through innovation and entrepreneurship or through freeing up natives for higher-value work. In fact, migrants make up just 3.4 percent of the world’s population, but MGI’s research finds that they contribute nearly 10 percent of global GDP. They contributed roughly $6.7 trillion to global GDP in 2015—some $3 trillion more than they would have produced in their origin countries. Developed nations realize more than 90 percent of this effect.

Realizing the benefits of immigration hinges on how well new arrivals are integrated into their destination country’s labor market and into society. Today immigrants tend to earn 20 to 30 percent less than native-born workers. But if countries narrow that wage gap to just 5 to 10 percent by integrating immigrants more effectively across various aspects of education, housing, health, and community engagement, they could generate an additional boost of $800 billion to $1 trillion to worldwide economic output annually. This is a relatively conservative goal, but it can nevertheless produce broader positive effects, including lower poverty rates and higher overall productivity in destination economies.

Whether the US chooses to “build a wall” to immigration will become increasingly irrelevant to patterns of international migration, while the decisions the EU makes about policing its external borders will become more consequential.

Net immigration from Mexico to the US, after surging for three decades, has been negative for the past eight years (Villarreal 2014, Gonzalez-Barrera et al. 2015). After adjustment to the Great Recession, the US labour market is picking up, so what will happen to immigration to the US in coming years? Patterns of future macroeconomic shocks, civil conflict, or natural disasters are difficult to foresee with any clarity, but there is one critical determinant of migration pressures that is easy to predict: changes in labour supply. These will arise as a result of differential population growth across countries.

What do we foresee for global international migration? Using forecasts from the United Nations, we can map the growth of young cohorts who will enter the labour force by 2050. Like Australia in an earlier era, within a few decades nearly all of the New World will be a low-population-growth bastion surrounded oceans that greatly complicate immigration for low-income individuals. Europe, also contracting demographically, will be ringed by high-population-growth regions, including North Africa, Iraq, Iran, Pakistan, Central Asia, and particularly sub-Saharan Africa.  
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The US will experience a gradual decline in its newly arrived immigrant population. Inflows to the US will increasingly be from countries that generate legal immigrants, such as India and China.

San Diego - Tijuana Border

Winners and Losers. And what about legal immigration? The time has come to start talking about legal immigration more realistically. Despite what the Chamber of Commerce claims, legal immigration is not manna from heaven. As with all other social policies, legal immigration creates winners and losers, and any rational discussion of immigration policy must consider that tradeoff. The employers who gain, along with many willing co-conspirators in the media and academia, have effectively silenced debate by reframing the issue as a battle between white-hatted globalists who carry the banner of progress on the one side and the xenophobes and racists on the other. If nothing else, the widespread revolt against globalization makes it obvious that there are indeed losers, and the losers are tired of being lied to and being left behind. American workers had no voice in setting up a system that was bought and paid for by the economic interests that gain from increased immigration. It is time to change that balance of power—those who gain should bear part of the costs, and those who lose should receive some of the benefits. There are many ways of redistributing the gains—ranging from taxing those industries that most benefit from the hiring of immigrants to making employers pay tens of thousands of dollars for each H-1B visa granted. If nothing else, this would help employers internalize the cost of the policies that they have benefitted so much from, and lead to a much more rational discussion of how much and which type of immigration we should have.

Who Are You Rooting For? President-elect Trump clearly articulated his vision of what immigration policy should accomplish in his acceptance speech at the Republican convention: “Decades of record immigration have produced lower wages and higher unemployment for our citizens, especially for African-American and Latino workers. We are going to have an immigration system that works, but one that works for the American people.” This goal is consistent with an approach of responsible nationalism, where the well being of Americans, and particularly of American workers, should weigh heavily when we determine in which direction to go. There are obviously many other groups that we might care about–including the immigrants themselves, the firms that profit from the additional labor, and the people left behind in the source countries. It is easy to detract from the discussion by arguing over mundane trivialities: Does immigration reduce wages by 3 percent or 5 percent? Is the fiscal burden $50 billion or $75 billion? We need a radical reframing of the immigration debate. The detractors of President-elect Trump’s proposals should be asked to answer a simple question: Who are theyrooting for? By making them explicitly declare whose well-being they really care about, we will get a much more honest look at the ideological forces that drive their immigration proposals, and the American people would get a chance to see who exactly is representing their interests.
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How Many? To be brutally honest, I don’t know. Any economist can easily answer the question in the abstract: As long as the contribution of an additional immigrant exceeds the costs imposed by that immigrant, it would be optimal to let that person in. Unfortunately, it is not that easy to operationalize this very simple rule. In fact, there isn’t a single academic paper that one can rely on to make a credible argument about what the optimal number of immigrants should be. The United States has admitted an average of about 1.5 million immigrants per year over the past two decades (about 1 million legal and half-a-million illegal). It seems self-evident that the debate over the consequences of immigration—which partly fueled the momentum behind Trump’s victory—hints that many Americans believe that we have gone beyond the optimal number. We also have some evidence that this high level of immigration led to a slowdown in immigrant assimilation. More than two decades ago, the Commission for Immigration Reform, led by the legendary Barbara Jordan, recommended to President Clinton a target of around 500,000 legal immigrants per year. If the “enforcement first” approach is successful and dramatically slows down the flow of illegal immigrants, it may be sensible to initially settle on a number between the 500,000 Jordan recommendation and the current 1 million legal immigrants. Let the political bargaining begin!