Efficiency Gains from Liberalizing Labor Mobility

44 Pages Posted: 26 Mar 2015

See all articles by Frédéric Docquier

Frédéric Docquier

Université catholique de Louvain; CREAM, Centre for Research on Environmental Appraisal & Management, UK; IZA Institute of Labor Economics

Joel Machado

Luxembourg Institute of Socio-Economic Research (LISER); Universite du Luxembourg - Faculty of Law, Economics and Finance

Khalid Sekkat

Université Libre de Bruxelles (ULB)

Date Written: April 2015

Abstract

In this paper, we quantify the effect of a complete liberalization of cross‐border migration on the world GDP and its distribution across regions. We build a general equilibrium model, endogenizing bilateral migration and income disparities between and within countries. Our calibration strategy uses data on effective and potential migration to identify total migration costs and visa costs by education level. Data on potential migration reveal that the number of people in the world who have a desire to migrate is around 400 million. This number is much smaller than that predicted in previous studies, and reflects the existence of high “incompressible” migration costs. In our benchmark framework, liberalizing migration increases the world GDP by 11.5–12.5 percent in the medium term. Our robustness analysis reveals that the gains are always limited, in the range of 7.0 percent (with schooling externalities) to 17.9 percent (if network effects are accounted for).

Keywords: Liberalization, migration, migration costs, migration policies

JEL Classification: F22, O15, O24

Suggested Citation

Docquier, Frédéric and Machado, Joel and Sekkat, Khalid, Efficiency Gains from Liberalizing Labor Mobility (April 2015). The Scandinavian Journal of Economics, Vol. 117, Issue 2, pp. 303-346, 2015. Available at SSRN: https://ssrn.com/abstract=2584766 or http://dx.doi.org/10.1111/sjoe.12097

Frédéric Docquier (Contact Author)

Université catholique de Louvain ( email )

IRES
Place Montesquieu 3
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://https://perso.uclouvain.be/frederic.docquier/

CREAM, Centre for Research on Environmental Appraisal & Management, UK

University of Newcastle
NE1 7RU Newcastle Upon Tyne
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Joel Machado

Luxembourg Institute of Socio-Economic Research (LISER) ( email )

11, Porte des Sciences
Campus Belval – Maison des Sciences Humaines
Esch-sur-Alzette, L-4366
Luxembourg

Universite du Luxembourg - Faculty of Law, Economics and Finance ( email )

162a, avenue de la Faïencerie
Luxembourg-Limpertsberg, L-1511
Luxembourg

Khalid Sekkat

Université Libre de Bruxelles (ULB) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1
Abstract Views
322
PlumX Metrics