The Global Economic Impact of Open Borders

39 Pages Posted: 5 Apr 2015

Date Written: April 3, 2015

Abstract

Open borders, in the sense of the abolition of policies restricting migration, would cause billions of people to migrate, and result in almost a doubling of world GDP. Based on a model that stresses human capital as a determinant of the wealth and poverty of nations, but which also has a spatial element and allows total factor productivity to differ across cities, two open borders scenarios are constructed. In the first, "pure market clearing" scenario, world GDP rises 91% as 82% of the world's population migrates, mostly to the West, and the living standards of unskilled workers worldwide rise to 26% of the US level. In the second scenario, with several adjustments made to favor greater realism at the expense of some arbitrariness, world GDP rises 85% as 58% of the world's population migrates, and the living standards of unskilled workers worldwide rise to 31% of the US level.

Keywords: migration, human capital, TFP, poverty, world, GDP, growth, geography

JEL Classification: F22, O15

Suggested Citation

Smith, Nathanael, The Global Economic Impact of Open Borders (April 3, 2015). Available at SSRN: https://ssrn.com/abstract=2589733 or http://dx.doi.org/10.2139/ssrn.2589733

Nathanael Smith (Contact Author)

Independent ( email )

No Address Available

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