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Technological superiority and the losses from migration

Donald R. Davis; David E. Weinstein

Title:
Technological superiority and the losses from migration
Author(s):
Davis, Donald R.
Weinstein, David E.
Date:
Type:
Working papers
Department:
Economics
Permanent URL:
Series:
Department of Economics Discussion Papers
Part Number:
0102-60
Publisher:
Department of Economics, 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-atime 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
Demography
Item views:
150
Metadata:
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