The Socioeconomic Case For Open Borders

Proposals for open borders are a boogeyman of the political extremes. On both the left and the right, the concept of open borders is seen as a disguised plan, by political opponents, to unleash a wave of immigrants into a country for self-serving and partisan purposes.

The language is humanitarian, they’ll say, but the ulterior motive is nefarious.

The evidence, however, shows us that these fears are unwarranted. According to the research, open borders provide vast financial benefit to the host country with limited negative social impact.

In a 2011 study, Michael Clemens, an economist at the Center for Global Development, showed that eliminating barriers to freedom of movement would increase global GDP by an estimated 50 to 150 percent. A conservative estimate of this sums to about $78 trillion.

The key barrier to freedom of movement is controlled borders. Open borders would, therefore, bring this economic change. Clemens expresses this in an example:

We can check these calculations on the back of the metaphorical envelope. Divide the world into a “rich” region, where one billion people earn $30,000 per year and a “poor” region, where six billion earn $5,000 per year. Suppose emigrants from the poor region have lower productivity, so each gains just 60 percent of the simple earnings gap upon migrating — that is, $15,000 per year. This marginal gain shrinks as emigration proceeds, so suppose that the average gain is just $7,500 per year. If half the population of the poor region emigrates, migrants would gain $23 trillion, which is 38 percent of global GDP.

This increase in earnings would come from higher technology, more stable government, and better chains of supply in the “rich region.”

And this is just taking into account the first “migration wave.” An open borders policy would create ongoing positive impacts which start to match the aforementioned headline numbers of 50 to 150 percent in global GDP.

Some accept this overall positive trend, but raise the concern that rich countries would lose out. One particularly prominent narrative is that the “immigrants are coming to steal our jobs.”

While at face value this appears reasonable, economists refer to this kind of reasoning as the lump of labor fallacy. Coined in 1891 by David Frederick Schloss, the lump of labor fallacy suggests it’s wrong to think there are only a set number of jobs in a country, which can be divided in different ways. On the contrary, if immigrants come to a country, then they will expand the economy and create more job opportunities.

Let’s say I own a grocery store in San Francisco, where I employ six native-born Americans. If immigration increases, and more people come into the neighborhood, I have no incentive to fire my employees; in fact, to meet the new increased demand, I may need to hire additional ones.

While this is a simple model, it underlines a well-researched phenomenon. Immigrants grant business an opportunity to expand. There is no fixed number of jobs; the labor market expands and contracts.

In addition to the fear that immigrants are coming for everyone’s jobs, another common theme in the rhetoric about immigration is that it lowers wages.

It seems true, doesn’t it? After all, migrants are often willing to work for lower pay than natives.

Yet the evidence suggests that this isn’t necessarily the case.

Researchers at the University of Oxford have found that the effects of immigration on average wages “are relatively small.” They found that, in the U.K., a migration equivalent to 1 percent of the working-age population might vary average wages from plus 0.3 to minus 0.3 percent — sometimes increasing the average wages and sometimes decreasing them, but never by much.

It is true that 1 percent immigration is not the same as mass immigration resulting from open borders. Nevertheless, the academic consensus suggests that even more significant immigration is unlikely to seriously influence wages in the long term.

Many people accept the economic benefits of immigration, and even of open borders, but still think it’s a problem. Their critique is one of societal impact.

Such critiques are sometimes condemned as motivated by racism. In some circumstances, this is true. However, not all social concerns come from racism.

There are two common arguments: that immigrants bring crime, and that immigrants freeload on welfare.

The criminality of illegal immigrants is a common complaint, but for the most part, it is not rooted in facts.

Michelangelo Landgrave andAlex Nowrasteh, of the Cato Institute, examined the American Community Survey and found that illegal immigrants were “44 percent less likely to be incarcerated for crimes than native-born Americans.”

There’s no doubt that immigration can cause crime. In Germany’s Lower Saxony, data from local police and the interior ministry indicate that 2015 to 2016 (a period in which Germany admitted over one million migrants and refugees) saw a 10.4 percent increase in reported violent crimes, with 92.1 percent of those crimes attributed to migrants.

On a surface level, this seems an open and shut case. Lots of immigration inexorably leads to a spike in crime. However, this reasoning ignores a crucial piece of context: most of those immigrants were young males without families.

The European Commission reported that “the median age of immigrants to E.U. in 2015 was 27-and-a-half years,” and that the migrant population in Germany was “63 percent male.” Regardless of origin, young men are the most likely to commit crimes out of any demographic. Moreover, there is a lack of families in the migration patterns, which can often serve as a “violence-preventing, civilizing force,” according to the BBC.

So while it’s true to suggest that immigration can cause crime, in dissimilar circumstances — such as the U.S.-Mexico relationship — it does not. It is only from specific areas with problems arising from extraordinary occurrences that immigration brings crime.

The second common critique is that open borders would mean that immigrants come to take benefits, freeloading off the welfare system while refusing to work. This argument is advanced by Steven Camarota at the Center for Immigration Studies, who says “[by] using welfare programs immigrants may strain public resources, harming taxpayers and making it more difficult to assist the low-income population already in the country.” According to Camarota, open borders should not exist lest a surge of immigrants destabilize the welfare system.

This argument has serious problems. First, it relies on the assumption that the host country grants welfare benefits immediately upon entry. Most do not. Often, there is a critical waiting period before welfare benefits are dispensed. This is the policy of the United States — even green card holders must live and work in the U.S. for five years to become eligible for welfare entitlements.

Camarota then assumes that immigrants who do receive welfare have a negative impact on the overall system. The American Immigration Council reports that “immigrant tax payments total $20 to $30 billion more than the amount of government services they use.” This applies to illegal immigrants as well, who pay a substantial amount to the government via payroll taxes.

The takeaway is that the socio-economic case for increased immigration is a durable one. At the very least, much of the rhetoric deployed from the political extremes against it is profoundly dubious.

The issue of immigration deserves serious and substantive debate. Too often, it is instead used as a political weapon of one side or another, which does us no favors.

It remains true that open borders, with its attendant mass immigration outcomes, is politically unpalatable at present. Yet political acceptance is not the benchmark for socioeconomic benefit. In my judgment, the evidence suggests that an increase of immigration into the developed world would be highly beneficial.