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Monday, May 12, 2008

"Why Legal Barriers are Not Critical to Deterring Immigrants"

Fences or not, most people choose not to immigrate:

Why legal barriers are not critical to deterring immigrants, by Drew Keeling, Vox EU: Policymakers addressing immigration frequently concentrate on using laws and regulations to influence the selection of immigrants and deter unwanted arrivals. But policymakers and scholars may be overemphasising legal mechanisms at the expensive of economic fundamentals.

Consider an historical period when legal mechanisms played little role in determining the volume of immigration flows. Despite minimal legal restrictions, annual migration rates across the North Atlantic in the nineteenth and early twentieth century rarely exceeded 1-2% of the population. This is not much higher than rates of international migration today.

For decades, scholars have believed that transportation costs severely limited long distance movement during the earlier open-border era. With international travel much cheaper today, strict legal barriers have thus been regarded as essential in keeping migration from rising far above already controversially high levels. But in recent research, I find that the great transatlantic migration of Europeans a century ago was not strongly constrained by the costs of travel.[1] Most people, most of the time, simply prefer to stay put rather than relocate abroad.

The cost of immigration a century ago Globalisation one hundred years ago bears many similarities to globalisation today. Then, as now, a disproportionate volume of the world’s economic activity occurred within the relatively more developed North Atlantic region.[2]

Free trade and free movement of goods, services, finance and information helped economic growth and international convergence persist for many decades until the outbreak of the First World War. One salient difference between that world and ours is that, a century ago, borders were also widely open to mass movements of labour.[3]

The ability to observe more closely the underlying processes of mass migration, unobscured by visa requirements, quotas, and work permit restrictions, has made the “Great Migration” of a century ago a favourite of migration scholars. Until recently, however, there has been very little systematic examination of the travel industry, which brought millions of Europeans overseas to foreign entry stations such as New York’s Ellis Island.

In my research, I develop a continuous long-term record of transatlantic passenger fares between 1885-1914, using shipping records from the Cunard Line’s Liverpool to New York route. During this time, North Atlantic migration volumes tended to fall when fares dropped. This happened during economic recessions in North America when migration declined markedly and shipping companies found it difficult to maintain fare levels.


Liverpool-based Cunard was never the largest transporter of transatlantic migrants, but it pioneered frequent regular passenger shipping services across the North Atlantic in the mid-1800s, and remained an industry leader thereafter. It was typical of North Atlantic migrant carriers as a whole in passing growing operational efficiencies on to passengers in the form of better onboard conditions rather than lower fares. At a time when the North Atlantic passage was tolerable, but not comfortable by modern standards, these incremental improvements may have encouraged the sorts of short-term back-and-forth migration that are even more typical today.

As with migration generally, however, both then and now, the economic risks of working abroad, particularly the risk of cyclical recessions, and the availability of family networks to help cope with those risks, were crucial factors determining who migrated and how many migrated.[4]

Modern implications My findings suggest that the uncertainties and hazards of working in distant foreign lands were probably greater deterrents to mass migration than travel costs were in the past or legal barriers are now. From the deserts of Arizona to the coastline of Spain, risks and business cycles are still important factors influencing international migration nowadays.[5] They may therefore turn out to be even more important in shaping migration levels than border controls, which are often problematic, hotly debated, and difficult to enforce.

Beyond more usually cited hindrances to effective immigration policies, such as inconsistent public attitudes or the challenges of transnational coordination, authorities and scholars have also been hampered by an insufficient understanding of the fundamental causes of migrant self-selection. Amid a bewildering array of often fiercely held political opinions about migration today, one general consensus seems to be that current policies are “broken” and that migration is “out of control”.

A more complete understanding of why, under almost any set of “policy regimes”, many people emigrate globally, but most do not, would thus be useful for reshaping laws and programmes in order to influence those migration decisions more effectively.

Mass migration has long been subject of historical scrutiny, but emphasis has been more on the effects of international relocation than on what causes it in the first place.[6] Policy-makers may want to shift focus accordingly, in order to better prepare for and manage transnational migration in a globalising and uncertain twenty-first century world. Policies aimed at root causes rather than merely revising the regulations and incentives layered on those causes by governments, might have much greater impact on fundamental patterns of cross-border movement in a world where globalisation looks likely to increase in both complexity and scale.

1 Drew Keeling “Shipping Companies and Transatlantic Migration Costs: The Case of Cunard, 1880-1914” presented at the Economic History Society's 2008 annual conference at the University of Nottingham, Friday 28 March to Sunday 30 March.
2 Douglas Massey, “To Study Migration Today, Look to a Parallel Era,” Chronicle of Higher Education, August 18, 2000.
3 Timothy Hatton and Jeffrey Williamson, Global Migration and the World Economy (2005), chapter 6.
4 Drew Keeling, “Costs, Risks, and Migration Networks between Europe and the United States, 1900-1914” in Research in Maritime History, vol. 33 (2007), pp. 113-173.
5 See, for example, “Lies, grief and a ticket home,” International Herald Tribune, April 4, 2007, and “Arizona Seeing Signs of Flight by Immigrants,” New York Times, February 12, 2008.
6 Hasia Diner, “History and the Study of Immigration. Narratives of the Particular,” in Migration Theory: Talking across Disciplines, edited by Caroline B. Brettell and James F. Hollifield (2000), pp. 27-42.

More evidence along these lines from George Borjas:

Sondheim on Migration, by George Borjas: Ever since I was first exposed to the music from West Side Story as a teenager, some of Stephen Sondheim's lyrics stuck with me. They appear in the song America. In the movie version, Bernardo and Rita are arguing over the costs and benefits of migrating from Puerto Rico to New York.

BERNARDO: I think I'll go back to San Juan

ANITA: I know a boat you can get on

BERNARDO: Everyone there will give big cheer

ANITA: Everyone there will have moved here

Given the huge volume of migration from Puerto Rico to the United States in the 1950s, it is not surprising that Sondheim expected Puerto Rico to empty out. But the fact is that it didn't. And therein lies one of the great unsolved puzzles in the study of migration. There are no legal restrictions whatsoever that hamper the mobility of Puerto Ricans to the mainland--they are American citizens by birth--and transportation costs are low. ... Why hasn't Puerto Rico emptied out?

Between 30 to 40 percent of the Puerto Rican population chose to move out. But that means that about two-thirds did not. Why? If economic theory is right, it must be the case that there are huge costs associated with the migration. Since these costs are unlikely to be monetary in nature, they represent the fact that most people, if given the choice, would much rather stay where they are at. It is not hard to calculate the migration cost for the "marginal" migrant. And they are substantial: probably around $400,000 to $500,000. (...The half-million dollar range comes about if one assumes that a worker can, say, double his salary by migrating to the United States and the rate of discount is 5 percent...).

There's still another puzzle. There are also no restrictions that hamper the flow of capital between the two places. Yet despite all these unrestricted labor and capital flows, there is still a sizable income differential between the United States and Puerto Rico. By 2003, price-adjusted per-capita GDP in Puerto Rico was still only two-thirds that of the United States (according to the Penn World Table). Whatever happened to the factor price equalization theorem? If 60 years is not the "long run," maybe Keynes was right after all.

The fact that migration entails very high costs is an important--and often ignored--part of the economics of migration. ...

    Posted by on Monday, May 12, 2008 at 06:12 PM in Economics, Immigration | Permalink  TrackBack (0)  Comments (12)


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