#thesis work tag

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I suspect that part of the reason migration has not been regarded as a development issue is that many of its benefits mostly elude the control of the sending-country government. Once workers have earnings abroad, it is difficult to bring them back into official channels. Taxing workers on their earnings abroad is nigh impossible. Hence, one reason that migration might not have been strongly on the international agenda is that the developing-country governments themselves perceive little benefit in migration. 

Of course, there are good reasons to be nervous about getting sending-country governments involved in migration. Many migrants are leaving precisely because of poor governance in their home countries. Getting those very governments whose citizens are anxious to depart involved in internationally negotiated agreements to control migration, collect taxes, and hold forced savings is not an obvious winner of an idea.

Lant Pritchett, Let Their People Come (2006)

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Labor mobility has been completely off the “globalization” and development agendas, for two reasons. First, these agendas are constructed by and for nation-states, and, as we saw in chapter 1, whatever secondary benefits migration might have for the nonmover citizens of immigrant-sending or -receiving countries, the main beneficiaries are those who move (and their families). Second, the ideas blocking increased labor mobility in the rich industrial countries seem so immovable that it was simply not worth wasting time and energy pushing against them. Personally, as a development economist, I had always avoided working on issues of labor mobility because while freer trade in goods or more capital mobility or even economic aid had obviously viable political constituencies and coalitions, it seemed pointless to even talk about the mobility of unskilled labor because the political obstacles were insurmountable. But as I thought more about it, four arguments convinced me that increased labor mobility is an issue worth raising.

First, ideas are less immovable than they seem. Ideas are a bit like a large dam. A dam can hold against tremendous pressures for decades and even centuries; but once breached, it can disappear in hours. In 1914 nearly every European state was headed by a monarch, a form of government that had persisted in Europe for more than a thousand years; but twenty years later, a blink in historical time, all but a few of the European monarchies were gone. Even more telling, the very idea of a monarchy as even a possible mode of governing was gone. Colonialism persisted for centuries—and then essentially disappeared in the two decades from 1947 to 1965—and the very idea of colonialism disappeared with it. Slavery had been a part of a multitude of civilizations for thousands of years—and was rarely considered morally problematic—and it too disappeared in the blink of the historical eye.

 The ideas that supported monarchy, colonialism, and slavery seemed in their day solid, impregnable, and respectable. Not only did these ideas change, but they changed so decisively that, even a few decades later, people wonder how otherwise rational and well-meaning people could have been held in the thrall of such patently ludicrous, not to mention obviously morally despicable, notions. Abolitionists in the United States were a small, radical, and many thought lunatic fringe group almost right up to the time they completely changed history forever; and it is now almost impossible to believe that they were the fringe.

It is not inevitable, or perhaps even plausible, but it is at least possible that the idea that it is acceptable to place restrictions on the movement of persons that hold human beings cruelly hostage to the place of their birth will be seen by my grandchildren as hopelessly wrongheaded. What seems like prudence and realism today in not promoting what seems “politically impossible” may seem a simple lack of moral courage tomorrow. 

Lant Pritchett, Let Their People Come (2006)

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One popular idea is that migrants are a net fiscal cost—they consume more in publicly provided services than they pay in taxes. There are huge debates about whether this is empirically true or not. A U.S. National Research Council study concluded, at current configurations of taxes and the benefits and structure of immigration, “the annual fiscal impact per U.S. resident of an increase of 100,000 per year in the immigrant flow under the baseline circumstances . . . to be roughly +30 $/person, composed of +40 $/person at the federal level and −10$ per person at the state and local level” (National Research Council 1997). But more important, as to whether any given estimate is better or worse, there is no correct answer to the question about the net fiscal cost, for two reasons.

First, even within a given structure of mobility, “the” fiscal cost has no single correct answer because it is entirely contingent on the structure of immigration—by age, by education, by family composition. Younger migrant workers with no children pay far more in taxes than they receive in benefits. Migrants with low education and earnings who bring children constitute a net fiscal cost—because of publicly provided education. Notice that the studies in the United States show the net fiscal impact varies from positive for federal government and negative for states because of the differences in the taxes collected and services provided at the various levels. This emphasizes that there is no way to extrapolate these results from the United States to any other country, because they would differ in the structure of taxation (direct versus indirect taxes) and benefits.

Lant Pritchett, Let Their People Come (2006)

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The economists’ typical response to objections to potential Pareto-improving policies that worsen the income distribution is to say “Instruments to targets.” That is, nearly any macroeconomic or microeconomic policy reform—trade liberalization, airline deregulation, macroeconomic stabilization—will produce some change in the economy-wide income distribution. But the usual approach is to recommend a policy if it is potentially Pareto improving and to also recommend that broad distributional concerns be addressed through the best available instruments for redistribution. 

That is, there is a broad tradition (to which many object but is nevertheless widespread) that one cannot burden every single policy with a complete general equilibrium analysis of not only the aggregate but also the distributional impact of each policy and use every policy as a distributional instrument. Rather, the “instruments to targets” literature suggests that the most effective policy is to have the best instrument for each target. In this view, while any policy (say trucking deregulation) might have distributional consequences, the policy recommendation should maximize output with one set of instruments and redistribute with another. 

Rodrik (2002) emphasizes that imports from countries with low wages that embody an equivalent (relative) amount of unskilled labor should have exactly the same impact on wages if they affect the net supply/demand balance for unskilled labor in exactly the same way. But when applied to trade, nearly all economists will agree that this is a “second best” problem. This is not a reason that justifies tariff restrictions as an instrument to improve income distribution. That is, in this instance, most economists have argued that policies should be separated and that income should first be maximized (free trade) and then optimal transfers implemented. Hence, it is not clear why this same argument does not apply to the actual mobility of labor (abstracting for a moment from the potential fiscal costs of migrants). I am relatively certain that none of the economists who use evidence of the distributional consequences of increased flows of unskilled labor as an argument against increased labor mobility would be comfortable with that exact same argument as a reason for banning imports from these same places. 

Lant Pritchett, Let Their People Come (2006)

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A common response to the idea that not all people allowed to enter a country to work would necessarily be entitled to all privileges of citizens is: “Who wants to live in the ‘kind of country’ where people are not treated equally?” But the fact is that we do live in a world of vast inequalities. The rich world is comfortable purchasing products from people who make very low wages— why not purchase services from the same people at the same wages? Even more telling, people from rich countries travel as tourists and receive services from people making very low wages. So there is no consistent objection of rich-country citizens to buying goods and services from people who make very low wages. The objection is to doing so while the people are physically present in their country, which is extremely odd as a moral justification—particularly when the people would be present voluntarily. This is a truly selfish altruism because it uses restrictions to keep poor people out of one’s geographic, and hence moral, vision.

Lant Pritchett, Let Their People Come (2006)

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Amartya Sen has popularized the notion of “missing women” in Asia due to differential death rates and (increasingly) sex-selective abortion. Because the child mortality rate in India is about 100 per 1,000 while it is 8 per 1,000 in the United States, this implies that 92 per 1,000 more Indian children than U.S. children die before age five. This means there are 2.2 million missing Indian children each year. However, while the “missing women” is a standard refrain, I have never heard the term “missing Indians” to describe the results of the child mortality differentials between the rich world and India. This is not to say that the problem of sex discrimination is not a serious global issue of unfairness. But what gives the sex comparisons such greater traction in the public mind—particularly in rich countries and in the development community—than the differences by nationality? 

Presumably, there is some sense that differences in well-being between the sexes within a country are “unfair” in a way that the massively larger measured differences in well-being across countries are fair. An Indian girl not having life chances equal to those of an Indian boy is widely regarded as morally unacceptable, while preventing an Indian girl (or Pakistani, Bolivian, or Egyptian girl—or her parents) from moving across national borders to have the same life chances as a German boy (or U.S., French, or Japanese boy) is considered morally acceptable. 

Lant Pritchett, Let Their People Come (2006)

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One of the intriguing features of the recent evolution of ideas is that it has become beyond the pale to think it is morally legitimate to discriminate against immovable ideas human beings because of the conditions of their birth—except for nationality. At the same time, concern for animals has been increasing. This leads to the obvious conclusion that close animals deserve greater moral consideration than distant human beings. Just as one example, in a recent review in the New York Times Book Review, Michael Ruse, a philosopher self-described as a left-leaning academic, lays out this argument quite clearly: “Personally I have a much closer relationship with my ferret than with the citizens of Outer Mongolia. Why should my actions benefit Outer Mongolians rather than my ferrets?” 

He then goes on to say that perhaps his actions should benefit other human beings rather than his ferrets—but that an argument needs to be made. Imagine if the same author had used any other condition of birth. If a heterosexual white Anglo-Saxon Protestant were to pose the question “Why should my actions benefit a gay person or a woman or a Jew rather than my ferrets?”— even suggesting that such a claim needs defense would be unthinkable, scandalous. But curiously, being born in Outer Mongolia puts other human beings (who are physically distant) plausibly lower in the moral order of concern than a ferret that is nearby.

Lant Pritchett, Let Their People Come (2006)

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Though labor mobility remains off the agenda, it is increasingly difficult to make a compelling case for additional reductions to barriers to markets for goods. More simple arithmetic illustrates the similar calculation for development assistance: Moving someone from making $2 an hour (in PPP) to making $10 an hour at 40 hours a week, 50 weeks a year, raises that person’s income by $20,000 a year. All official development assistance is roughly $60 billion a year. Allowing an additional 0.5 percent of the rich-country labor force to enter from poor countries would produce gains in the monetary value of all official development assistance.

Lant Pritchett, Let Their People Come (2006)

Basically.