What is the greatest single class of distortions in the global economy? One contender for this title is the tightly binding constraints on emigration from poor countries. Vast numbers of people in low-income countries want to emigrate from those countries but cannot. How large are the economic losses caused by barriers to emigration? Research on this question has been distinguished by its rarity and obscurity, but the few estimates we have should make economists’ jaws hit their desks. The gains to eliminating migration barriers amount to large fractions of world GDP—one or two orders of magnitude larger than the gains from dropping all remaining restrictions on international flows of goods and capital. When it comes to policies that restrict emigration, there appear to be trillion-dollar bills on the sidewalk.
Obviously, full open borders is not a feasible short-term goal. But why shouldn’t we look forward to a freer, more egalitarian world of tomorrow in which people are allowed to live where they want? Imagine if there was a law saying a person’s not allowed to move from Ohio to DC after college to look for work. We can do better than the current status quo. Largely freeing goods and capital to move around the world while imprisoning human beings according to the happenstance of their birth is an odd equilibrium to have chosen.
In some ways, I think Clemens even sells himself short. Legal barriers to labor mobility among rich countries seem to me to also be a big deal.