Title:

Technological superiority and the losses from migration

Author(s):

Davis, Donald R.
Weinstein, David E.

Date:

2002

Type:

Working papers

Department:

Center on Japanese Economy and Business

Permanent URL:

http://hdl.handle.net/10022/AC:P:288

Series:

Center on Japanese Economy and Business Working Papers

Part Number:

196

Publisher:

Center on Japanese Economy and Business, Graduate School of Business, Columbia University

Publisher Location:

New York

Abstract:

Two facts motivate this study. (1) The United States is the world's most productive economy. (2) The US is the destination for a broad range of net factor inflows: unskilled labor, skilled labor, and capital. Indeed, these two facts may be strongly related: All factors seek to enter the US because of the US technological superiority. The literature on international factor flows rarely links these two phenomena, instead considering one-at-a-time analyses that stress issues of relative factor abundance. This is unfortunate, since the welfare calculations differ markedly. In a simple Ricardian framework, a country that experiences immigration of factors motivated by technological differences always loses from this migration relative to a free trade baseline, while the other country gains. We provide simple calculations suggesting that the magnitude of the losses for US natives may be quite large- $72 billion dollars per year or 0.8 percent of GDP.

Subject(s):

Economics, Commerce-Business

Item views:

100

Metadata:

description

View | Download