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Several studies indicate that increased labor mobility could bring about large economic benefits worldwide, and fully open borders could bring gains of between 67% and 122% of world GDP (Clemens 2011) and dramatically reduce global poverty (Shulman 2014). Much of this increase would come via substantially increasing the wages of migrants from poorer countries, allowing them to earn more, and possibly sending remittances that will help their families or communities out of poverty.

However, there are some negative effects. There may be a “brain drain” from low income countries, that harms their economies in the long run. Additionally, domestic workers in high-income countries may face more competition which could lower their wages or increase unemployment rates for domestic workers. However, it is extremely unclear whether this effect is significant. Third, high levels of immigration may destabilize culture in damaging ways. Finally, political “backlash” against high levels of immigration may fuel the rise of anti-immigration political movements, who may revert policies, resulting in lower levels of immigration than before. They may also introduce other damaging policies.

Regardless of the merit of the arguments, increasing labour mobility has proven politically difficult, since citizens from high income countries generally strongly oppose this type of reform.

Further reading

Clemens, Michael A. 2011. Economics and emigration: Trillion-dollar bills on the sidewalk?
The journal of economic perspectives 25(3): 83-106.
An attempt to estimate the economic losses caused by barriers to migration.

Open Borders.
A comprehensive repository of information about open borders.

Open Philanthropy Project. Labor mobility.
OpenPhil's shallow investigation about labor mobility.

Pritchett, Lant. 2006. Let their people come: Breaking the gridlock on global labor mobility.. Washington, DC: Center for Global Development
A book-length examination of the economic effects of increased labor mobility.

Roodman, David. 2014. The domestic economic impacts of immigration.
A thorough overview of the evidence on the potential side effects of immigration.

Shulman, Carl. 2014. How migration liberalization might eliminate most absolute poverty.
A defence of the claim that the estimates about the effects of migration liberalization on absolute poverty is significantly more robust than the most extreme estimates of global output gains.