There has been recent academic literature that suggests a median estimate of doubling of world GDP under a regime of free global labor mobility. Below, there are two examples of academic literature that support this hypothesis. Much of the literature is speculative, and there are many uncertainties in all estimates. There is wide variation in the views of just how much open borders will grow the economy, even among open borders advocates.
According to the paper Economics and Emigration: Trillion-Dollar Bills on the Sidewalk? (2011) by Michael Clemens at the Center for Global Development, open borders could lead to a one-time boost in world GDP by about 50-150%. This paper is a literature review which summarizes estimates made in numerous other papers, and does not contain any new research findings in of itself. The paper relies on the estimates of gains to world GDP from labor mobility to propose a new research agenda in labor and public economics, focusing on migration issues.
One way of thinking about doubling GWP(gross world product) is in terms of the per capita income of different countries today.
Doubling GWP per capita would bring the world average close to that of economically depressed Greece.
Bringing the world average to British or Japanese standards would triple GWP, while global American or Hong Kong per capita incomes would quadruple GWP.
A different comparison is to the time it takes GWP to double at different growth rates. In recent years GWP has been growing at 3-4% per annum (note this is total GWP, not per capita GWP, so it includes the effect of population growth).
A 3% growth rates corresponds to GWP doubling ever 23.45 years, and a 4% rates gives a doubling time of 17.67 years.
So, an effect that doubled total world GDP would be amazing, but not wildly beyond the kind of variation we see across space today and across time in recent history.
John Kennan, an economics professor at the University of Wisconsin-Madison, wrote a paper titled Open Borders (ungated PDF) a year after Clemens’ paper came out (the original version came out in August 2012, but the paper was updated in October 2012).
Kennan’s article claims that The estimated gains from removing immigration restrictions are huge. By using a simple static model of migration costs, he finds that the estimated net gains from open borders are about the same as the gains from a growth miracle that more than doubles the income level in less-developed countries.
There is a large body of evidence indicating that cross-country differences in income levels are associated with differences in productivity. If workers are much more productive in one country than in another, restrictions on immigration lead to large efficiency losses. The paper quantifies these losses, using a model in which efficiency differences are labor-augmenting, and free trade in product markets leads to factor price equalization, so that wages are equal across countries when measured in efficiency units of labor.
End of Poverty
Ending absolute poverty has been a Holy Grail for development economists, and many others, for the past half century. However, it has been difficult to identify specific policy programs which governments can pursue to end human poverty. One policy program which some development researchers believe would contribute greatly to ending global poverty is more liberal migration laws allowing greater freedom of movement across international borders.
Those who argue that migration can play a large role in ending poverty base this on a few key pieces of evidence:
- There is a place premium: The same person, without any change in skills or in the number of hours worked, can earn a considerably higher income in some countries than in others. Thus, migration is almost a “free lunch” for these workers and the richer economies they can work in. The causes for the place premium are complex, but they are believed to be some combination of economic systems, legal systems, and culture/social structure than enable better use of a person’s talents.
- A significant fraction of people from poor countries have escaped poverty through migration. For instance, among those born in Haiti who are today not in poverty, 82% escaped poverty by leaving Haiti. For more on this research by Michael Clemens and others at the Center for Global Development, see income per natural and the linked research.
- When there is freedom of movement between countries, there is rapid convergence between the incomes earned by people in comparable jobs. Migration plays an important role in this, both directly and via remittances and by creating a more interconnected world.
Read more about the economic benefits of open borders here: