Migration Can Solve Poverty

Michael Clemens et. al explain the ridiculous inefficiency of migration barriers in the “The Place Premium: Wage Differences for Identical Workers across the U.S. Border.” Center for Global Development Working Paper 148:

Findings:

• Gaps in wages represent one of the largest remaining price distortions in any global market
• For many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination, typically much larger than wage discrimination based on ethnic group or gender within spatially integrated labor markets
• Wage gaps imply that simply allowing labor mobility can reduce a given household’s poverty to a much greater degree than most known antipoverty interventions inside developing countries.

(HT: Trade Diversion)