The Openness-Equality Trade-Off in Global Redistribution

Abstract

The Gulf Cooperation Council (GCC) countries accept massive numbers of migrants from poor countries and pay wages that dramatically improve over outside options but are meagre by the standards of natives. As such they do dramatically more per capita to reduce global inequality than do the “fortress welfare states” of the Organisation for Economic Cooperation and Development (OECD) countries. If OECD countries were to imitate the GCC it would reduce global inequality by more than full equalisation within the OECD would. Such examples suggest a philosophically disturbing trade-off between openness to global inequality-reducing migration and internal equality.

The online appendix may be found at http://ssrn.com/abstract=2755304.

Keywords: global redistribution, migration, global inequality, Gulf Cooperation Council, prejudice

JEL Classification: D63, F22, H21, J61, O19