Working Paper: NBER ID: w12871
Authors: Jess Benhabib; Boyan Jovanovic
Abstract: We ask what level of migration would maximize world welfare. We find that skill-neutral policies are never optimal. An egalitarian welfare function induces a policy that entails moving mainly unskilled immigrants into the rich countries, whereas a welfare function skewed highly towards the rich countries induces an optimal policy that entails a brain-drain from the poor countries. For intermediate welfare functions that moderately favor the rich however, it is optimal to have no migration at all.
Keywords: migration; welfare; immigration policy; human capital
JEL Codes: O00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| skill-neutral immigration policies (J68) | optimal migration policies (J68) |
| egalitarian welfare function (D63) | policies allowing unskilled immigrants (K37) |
| welfare function favoring rich countries (D69) | policies promoting brain drain (I25) |
| intermediate welfare functions (D69) | optimal policy may involve no migration (J68) |
| immigration (F22) | welfare of host countries (I30) |
| average level of human capital (J24) | impact of immigration on welfare of host countries (F22) |
| low-skilled immigrants (K37) | depress productivity and wages (F66) |
| social capital and human capital externalities (J24) | immigration policy and economic outcomes (K37) |
| welfare conditions (I30) | migration of low-skilled individuals (J61) |