Relaxing the Restrictions on the Temporary Movements of Natural Persons: A Simulation Analysis
50 Pages Posted: 21 Mar 2003
Date Written: January 2003
While the liberalization of trade has been at the forefront of the global agenda for many decades, the movement of natural persons remains heavily guarded. Nevertheless, restrictions on the movement of natural persons across regions impose a cost on developing and developed economies that far exceeds that of trade restrictions on goods. This Paper uses a global CGE model to investigate the extent of these costs, by examining the effects of an increase in developed countries' quotas on both skilled and unskilled temporary labour equivalent to 3% of their labour forces. The results confirm that restrictions on the movement of natural persons impose significant costs on nearly all countries (over $150 billion in all), and that those on unskilled labour are more burdensome than those on skilled labour.
Keywords: GATS Mode 4, temporary migration, CGE
JEL Classification: F22, J61
Suggested Citation: Suggested Citation