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The simplest most reliable way to help the world’s poor a lot would be for rich nations to accept more poor immigrants. While doing so would lower the price of many goods and services that poor immigrants provide, it should also lower the wages of natives who compete for similar jobs. If rich nations completely opened their borders, how big might this reduction be? It seems that even if 90% of the workforce were immigrants, average native wages wouldn’t fall by more than ~10%. From a new NBER immigration lit review:
Their survey of the earlier literature found that a 10% increase in the immigrant share of the labor force reduced native wages by about 1%. Recent meta-surveys … found comparable, small effects across many studies. … The large majority of studies suggest that immigration does not exert significant effects on native labor market outcomes. Even large, sudden inflows of immigrants were not found to reduce native wages or employment significantly. Effects that do exist tend to be relatively small and concentrated among natives or past immigrants that are close substitutes. … Research on the role of immigrants in the labor market mostly yields consistent findings across countries and experiences: recent migrants have lower earnings than natives, there is partial convergence with duration of stay, displacement effects tend to be small, the most affected groups are close substitutes, etc. (more)
That seems to me a reasonable price to pay for such huge assistance to the world’s poor.
Open Border Cost
Calcutta, Bombay, Hong Kong, Singapore and I don't know how many other places were founded in much the same way. Practically the entire non-white population were immigrants from surrounding regions. They all came voluntarily.
And yet, if you show people pictures of those cities in the days when a tiny unelected white minority ruled over vast populations of brown and yellow people, they still use words like "colonialism" and "racism".
In that more technical paper Peri found a clever way to control for Ive discussed before that can contaminate estimates of the effects of immigration on native employment outcomes. I thought it was important though to point out that academic economists dont really contest the existence of this . That said we have learned a lot by trying to poke holes in the landmark experimental studies summarized and ..While those famous papers dealt with important measurement issues weve also learned that experimental studies are inadequate to deal with at least two other factors indicated by economic theory that may be biasing the one way or another..First and this is the measurement issue dealt with by the experimental studies we want to be sure that there is not something that makes a particular area or job a more attractive place to work causing both foreigners and natives to migrate to that area or job.