We live in a world where trade policies are liberal and immigration policies are
restrictive. Recent globalization discussions give the impression that this policy difference is a modern phenomenon (Wellisch and Walz 1998; Hillman and Weiss 1999), implying that trade policy was liberal and open a century ago. This conventional view is quite wrong. Instead, while most labor-scarce economies today have open trade and closed immigration policies, a century ago the labor-scarce economies had just the opposite, open immigration and closed trade policies. Thus, the inverse policy correlation has persisted over almost two centuries.
Why have policies towards the movement of labor and goods always been so different in labor-scarce economies? After all, importing labor-intensive products is pretty much like importing labor. So shouldn’t trade and migration policies reinforce each other? Consider for a moment the simple 2×2×2 model in which trade is driven by factor endowments. Furthermore, let us think about the country where labor is relatively scarce since that’s the country for which immigration policies matter. Suppose such a country puts up a tariff to protect the scarce factor, labor. In the absence of immigration, wages will increase. But if labor is allowed to move across borders, the tariff-induced wage increase will be undone by immigration (Mundell 1957). By the same logic, an immigration policy designed to protect domestic labor will be undone by free trade: the desired effect will only be achieved by restricting both trade and immigration. Simple theory predicts that immigration and import restriction should go together. In fact, they never have. Therein lies the policy paradox.
World mass migration began in the early nineteenth century, when advances in transportation technology and industrial revolutions at home enabled increasing numbers of people to set off for other parts of the globe in search of a better life. Two centuries later, there is no distant African, Asian, or Latin American village that is not within reach of some high-wage OECD labor market. This book is the first comprehensive economic assessment of world mass migration taking a long-run historical perspective, including north-north, south-south, and south-north migrations. Timothy Hatton and Jeffrey Williamson, both economists and economic historians, consider two centuries of global mobility, assessing its impact on the migrants themselves as well as on the sending and receiving countries.
Global Migration and the World Economy covers two great migration waves: the first, from the 1820s to the beginning of World War I, when immigration was largely unrestricted; the second, beginning in 1950, when mass migration continued to grow despite policy restrictions. The book also explores the period between these two global centuries when world migration shrank sharply because of two world wars, immigration quotas, and the Great Depression. The authors assess the economic performance of these world migrations, the policy reactions to deal with them, and the political economy that connected one with the other. The last third of Global Migration and the World Economy focuses on modern experience and shows how contemporary debates about migration performance and policy can be informed by a comprehensive historical perspective.