Relaxing immigration laws is the most pro-growth measure the rich countries' governments could take. Not only would it enhance well-being in the rich countries, but it would also be the most effective antipoverty measure any wealthy country's government could take….
There is copious evidence that people in poor countries—from engineers down to unskilled laborers—could earn three to ten times as much in the United States as they do in their home countries. If they were allowed to come to the United States, they would clearly benefit themselves. So, for example, there are people near starvation in Sudan, Haiti, and Cambodia who in the United States would earn what many of us would regard as a pittance but many of them would regard as riches….
When an American buys a service from an immigrant, it is not just the immigrant who gains. The American gains too, or else he wouldn't have bought the service. Boston University economist Patricia Cortes, in a study published in the Journal of Political Economy, found that cities with larger influxes of low-skilled immigrants had lower prices for labor-intensive services such as dry cleaning, childcare, housework, and gardening. In a later study, Cortes and coauthor Jose Tessa found that these low-price services allowed Americans, especially women, to spend more hours working in high-skilled, high-paying jobs.
The gains from eliminating barriers to immigration are huge. In a recent article in the Journal of Economic Perspectives, economist Michael Clemens finds that getting rid of all immigration restrictions worldwide would approximately double world GDP…..
Still, relaxing immigration laws doesn't get nearly the respect of newer, sexier, less effective means of helping the non-American poor:
Immigration reform would dwarf any other measure economists have considered to help people in poor countries. Take microcredit, the lending of small amounts to small businesses. In his recent book, Borderless Economics, Robert Guest notes Harvard University economist Lant Pritchett's observation that the average gain from a lifetime of microcredit in Bangladesh, such as that provided by Nobel Peace Prize winner Mohammed Yunus's Grameen Bank, is about the same as the gain from eight weeks working in the United States. Asks Pritchett, "If I get 3,000 Bangladeshi workers into the US, do I get the Nobel Peace Prize?"
