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Wednesday, June 12, 2019

Crooked Timber (J. Quiggen): Can globalization be reversed?: Part II (migration) [feedly]

Can globalization be reversed?: Part II (migration)
http://crookedtimber.org/2019/06/12/can-globalization-be-reversed-part-ii-migration/

In my previous post about globalization, I concluded that plausible policy shifts (essentially, the continuation and widespread adoption of Trump's current policies) could bring about a substantial reversal of one element of globalization – the complex global supply chains that now characterize the production of goods. In this post, I'm going to look at migration, which is now the most politically salient aspect of globalization, and argue that even draconian policies are unlikely to do more than slow the most important consequences of migration.

The UN DESA International Migration Report 2017 shows that

3.4% of the world's inhabitants today are international migrants. This reflects a modest increase from a value of 2.8% in 2000. By contrast, the number of migrants as a fraction of the population residing in high-income countries rose from 9.6% in 2000 to 14% in 2017.

The focus on migrant stocks illustrates one of the crucial distinctions between migration and trade. Trade is a matter of flows, but the primary issues in migration relate to stocks, that is, cumulative flows. So, even if migration flows are slowed, the stock of migrants will continue to grow. That growth is limited by mortality, but that in turn is offset by the fact that the children of migrants will resemble their parents in many (not all) of the characteristics that have created political tension.

A second point, that needs to be treated with care is that immigration is primarily an issue for high-income countries. That's partly because net migration flows from poor to rich countries, as would be expected. But it's also because there's a lot of migration between high-income countries. The US, UK and Germany are all among the Twenty countries or areas of origin with the largest diaspora populations. If the numbers were expressed as a percentage of population rather than an aggregate, some other European countries might make the list.

The final factor that needs to be taken into account is that permanent migration represents only a tiny proportion of international travel. It's estimated that there are over a billion international arrivals a year, compared to annual migration flows in the tens of millions. That's a reversal of the 19th century pattern when migration to the "New World" was commonly a one-way trip, and when tourism barely existed. The underlying cause is that the cost of travel has declined rapidly, far more so than the cost of shipping goods.

Everyone who travels overseas is potentially a migrant. They may see new places they might prefer to their home, meet people with whom they might form relationships, take on temporary work that opens up permanent opportunities and so forth. These effects are enhanced by the ITC revolution which has effectively eliminated costs of communication between people in different countries. I'm typing this in Toulouse, but it would make no difference if I were in Toowoomba, or even somewhere proverbially remote like Timbuktu (Mali currently has 63 per cent Internet penetration). All of this creates a demand for migration that goes beyond the traditional motivators: moving to an unknown country in the hope of a better life and fleeing your hope country to escape war and persecution.

Can this flow be halted or reversed? Anti-immigrant sentiment has already led to the adoption of measures sufficiently draconian to impose substantial costs on current citizens, both native-born and naturalized, without achieving more than a modest reduction in flows.

These costs of restrictionist policies arise most sharply for anyone who forms a relationship with someone from another country. In Australia, your spouse can generally get a visa, but at the potential cost of being unable to reunite with immediate family members. In Britain, as I understand it, even spouses aren't allowed in unless their income is high enough. These are huge restrictions on freedom for those affected.

Exclusion of foreign workers, is in large measure, the rationale of restrictionist policy. But, even on extreme estimates, the benefits to native-born workers are small enough to be offset by a single round of regressive tax cuts. And these estimates look only at net flows from poor to rich countries. The EU puts a lot of effort into restricting work opportunities for Australians and vice versa. There's almost no aggregate effect on labour markets, but it puts plenty of burdens on individual workers and raises costs for employers, with no net benefit.

A policy to push net immigration to zero, or even close to zero, would almost certainly impose personal and economic costs on the country concerned so high as to be politically untenable. And anything less implies a continuation of the gradual mixing of the world's population that is the most immediately visible consequence of globalization.



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