Economist Michael Clemens is pretty sure that the continent won't collapse if it lets more immigrants in.
This article originally appeared on VICE Germany.
Last Sunday, 800 men, women, and children drowned in the Mediterranean after their boat capsized off of the Libyan coast. One week before that, on April 12, 400 people drowned in a similar disaster. The UNHCR reckons that, since the beginning of this year, 1,700 people have died while attempting to cross the Mediterranean to reach Europe.
Since that fateful Sunday, the problem can no longer be ignored by the people of Europe. At an especially organized summit, EU leaders agreed upon implementing extensive measures to be able to rescue more people from danger at sea. At the same time, they discussed a number of ideas aimed at trying to discourage refugees from attempting to cross at all. Suggestions ranged from erecting giant detention camps in North African countries to military intervention in Libya.
The problem with all the aforementioned ideas is obvious: They don't tackle the fundamental problem. There are a lot of people who want to migrate to Europe and the European Union doesn't want to let them in. The motives behind their migration are varied—some are fleeing war and persecution, others poverty and lack of prospects—but the EU's answer remains unchanged: Without a visa, nobody can enter.
Yet people rarely ask why this needs to be the case. Nobody would ever think of preventing a 19-year-old from Athens from trying their luck in Stuttgart, yet we refuse others the exact same right. What would happen if we opened the borders to the European Union and simply let in anyone who wanted to enter?
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These kinds of political ideas seem utopian these days. We have gotten used to the notion that economically stronger countries have to defend their borders by any means necessary. Giving up this control and essentially waving through every immigrant after a background check and a medical exam—it sounds too much like the naive vision of "no borders" activism that doesn't merit serious discussion.
Because even if the moral argument for open borders is basically accepted by most, people still seem convinced that it isn't a realistic option. The prevailing opinion is that Europe would collapse under the onslaught of "third world" citizens.
Yet few people are aware that this idea is being taken very seriously by some academics—primarily economists. Michael Clemens is one of them. As a senior fellow at the Centre for Global Development, he's been researching migration for years and has come to some rather unexpected conclusions. These include his theory that restrictions on immigration "place one of the fattest of all wedges between humankind's current welfare and its potential welfare." His calculations indicate that the freedom to move across international borders could double the global GDP.
I asked Michael Clemens to contemplate what could happen if the EU suddenly decided to open their borders for international migration. And although this is a scenario that doesn't claim to entail absolute truth, his thoughts—to put it mildly—took me by surprise.
VICE: Mr. Clemens, apart from political reasons—why do people try to migrate to wealthy countries?
Michael Clemens: People from poor countries migrate mainly to get safety for themselves and their families, and to get proper compensation for their hard work and study. Safety and opportunity depend mostly on what country you live in, and 97 percent of humanity lives in the country they were born in. For those of us born in safe, prosperous countries, such a random lottery seems quite satisfactory. Most migrants are people who have simply decided that they will not let lottery results enforced by others determine the course of their lives.
Within our own countries, we know why people leave neighborhoods that are dangerous, poor, or both. These are the same reasons that people leave countries that are dangerous, poor, or both. But there are two differences. Many people in dangerous, poor countries live with risk and destitution that even the poorest people in rich countries will never face and cannot imagine. And, of course, no one stands at the exit to poor neighborhoods, coercing people to stay inside with a gun.
So what would happen if the EU opened its borders completely? Would it be flooded by immigrants from poorer countries?
Migration flows are very hard to predict. We can see this in two episodes when the United Kingdom lifted restrictions on immigration. In 2004, the UK lifted restrictions on immigration from Poland; immigration was far more than predicted. In 2014, it lifted restrictions on immigration from Romania; immigration was far less than predicted.
What we can be sure of is that many people will make loud, confident forecasts of doom. When Germany lifted restrictions on Polish immigration in 2012, German trade unions predicted that a million Poles would flood in the following year. Actual Polish immigration that year was 10 percent of that; the other 90 percent was fearful imagination. When the United States opened its borders to the poor island nation of Micronesia in 1986, many predicted that Micronesians would flood into Hawaii and California. Fourteen years later, less than 6 percent of the population of Micronesia had moved to the US.
So what would happen at a global level? We have some evidence, from the Gallup World Poll, which can only be considered suggestive. Gallup pollsters go to pretty much all countries, and in each country, they ask around 1,000 adults the same set of questions every year. One of the questions is about whether or not they would like to emigrate, and if so, where.
The bottom line is that Europe's overall population would rise by 10 percent if everyone who told Gallup they would like to move to Europe could do so. Germany's population would rise by 23 percent, because it is a particularly prosperous and desirable destination.
This is the best direct evidence we have. I say this evidence is only suggestive, because we don't know the extent to which stated desires reflect real behavior. Many people who say "yes" might be expressing an idle wish, not a genuine plan—the way you might say "yes" to a pollster who asked you if you want to start a business some day. And many people who say "no" might reconsider if they had a way to migrate without paying smugglers and risking their lives. So the real answer is that social scientists cannot be certain, but have noted a systematic tendency for interest groups to over-predict flows.
What impact would the influx of immigrants have on the European economy?
The research we have shows that immigration has had a positive effect on economic growth in Europe overall. This remains true in economists' most sophisticated forecasts for the future. Christian Lutz and Ingo Wolter forecast a positive effect of immigration on German economic growth. Katerina Lisenkova and Miguel Sanchez forecast a positive effect of immigration on UK economic growth. And so on.
I would go as far as to say that this is a consensus opinion among economists. That is saying a lot, because economists are known for putting caveats on everything. But all the serious evidence we have points to large gains in overall economic activity from reduced barriers to labor mobility. Ninety-six percent of American labor economists agree that the economic benefits of US immigration exceed the losses.
That is essentially unanimity. While a handful of economists make vague claims of economic harm from immigration, they generally have not done any peer-reviewed economic research to support that claim, and their views should be regarded as political opinions rather than reflecting economic expertise.
Of course, speed matters. There are many reasons to expect the impact of a million immigrants to depend on whether they arrive over three years or over 20 years. This is largely absent from public debate, which tends to focus instead on absolutes like "stop them all" or "let them all in immediately."
A more nuanced debate would begin from the solid consensus of serious economic research that there are large overall economic benefits, and discuss how to transition in order to capture those benefits. Economic development in poor countries is associated with more emigration—not less—for the same reasons that you're more likely to see people from an outlying neighborhood living and working in an upscale part of your town-center when that outlying neighborhood gets richer. One of the great policy challenges of the 21st century is how to build policies that translate mobility into economic benefit, rather than building naval blockades and mass-detention camps.
"Future flows of immigrants, within a large range, are likely to raise the wages and employment of typical European workers."
Would European workers experience a significant dip in wages? Is it possible for a market to integrate, say, millions of new laborers, some of who are untrained?
Future flows of immigrants, within a large range, are likely to raise the wages and employment of typical European workers.
Some of the best new evidence we have on this comes from economists Mette Foged and Giovanni Peri. No one out there has better data or more scientific methods than these researchers. They have studied the wages and employment of every individual worker in Denmark from 1991 to 2008 (yes, everyone) and tracked how they responded to a large influx of refugees from places like Somalia and Afghanistan. Those immigrants caused native unskilled wages and employment to rise.
To see why, you have to take a step back. Certainly, when there is a single job in construction or child care, a migrant filling that job means that a native does not fill it. But that is just the beginning of how a labor market works. When there are immigrants around, native workers make different choices. What Foged and Peri show is that low-skill native Danes responded to migrant inflows by specializing in occupations requiring more complex tasks and less manual labor.
Beyond that, other research has shown that natives acquire more skill when immigration rises. And firms adjust their investments when immigrants are present, shifting away from technologies that eliminate low-skill jobs for both low-skill immigrants and low-skill natives. Most simply of all, foreign workers are not just workers, they are also consumers. Immigrants at low wages tend to consume products, like fast food and budget clothing, that are made and sold by other low-wage workers.
All of these things mean that low-skill immigrants end up both taking jobs and creating jobs. The balance, in the best research we have on Europe, has been positive even in places were politicians and activists say that it must be negative. Communicating that fact will be a permanent challenge, because the ways that immigrants fill jobs are direct and visible; the ways that they create jobs are indirect and invisible.
Would the European welfare states collapse if too many people become dependent on them? Are there ways to mitigate this?
Reasonable discussion of immigration and welfare has to start from facts. Currently, the welfare state in Europe overall depends on immigrants, not the other way around.
A comprehensive review by the independent OECD in 2013 found that the average immigrant household in Europe contributed over £2,000 [$3,000] more in taxes than it took in benefits. This means that the work of immigrants overall is subsidizing European states—helping Europeans pay for the education of their children, the care of their grandparents. The question is whether European welfare systems will collapse without immigrants.
This is also true in Germany in particular. Prof. Holger Bonin has shown that tax revenues per foreigner exceed transfer payments by about €1,400 [$1,550] per year.
So that's the current reality. Immigrants subsidize non-immigrants, in Germany and across Europe. That is unlikely to change under greater migration flows. This is because the principal reason for the OECD's finding, its analysts write, is that new migrants tend to be young, healthy people in the prime of their lives—the kind of people who are net contributors to public coffers. That pattern would change very little even if migration flows were much larger, and even if tax and spending policies did not change.
Furthermore, the welfare state can adjust to migration flows. The OECD study finds large differences across countries. The net positive fiscal effect of migrants in Norway is twice as large as it is in Denmark. The fiscal impact of immigrants is a decision that countries make. In the United Kingdom, asylum seekers are net takers of benefits because they are banned from working. That is, UK voters apparently support policies that force asylum seekers not to generate tax revenue. Then some of the same voters complain about asylum seekers because they do not generate tax revenue.
"In the United Kingdom, asylum seekers are net takers of benefits because they are banned from working. That is, UK voters apparently support policies that force asylum seekers not to generate tax revenue."
Are there cultural/societal problems that could arise from a significant number of people from less developed countries suddenly living in Europe?
Our assumptions about immigration run so deep that they are built directly into our language. It's common to say that societal problems "arise" from immigration. Think for a moment about the assumptions that are necessary for us to ask this question.
Suppose a woman is attacked by men on the street, as she walks to work. What caused the attack? It depends on your assumptions. Many people in the world do not believe that women have the unqualified right to work or to walk down any street. These people might say that the cause of the attack was that the woman's family allowed her to take a job and walk around unguarded. If you believe that women's rights to work and travel are beyond question, you might identify a different cause of the attack: The cause of the attack was that men decided to attack her.
Likewise, when activists hold rallies to unmistakably threaten immigrants with violence, many might describe this as social conflict "arising" from immigration. This view requires you to already have decided that migrants don't have the right to be there—for the same reasons that saying attacks against women arise from their presence on the sidewalk requires you to have already decided that women don't have the right to walk on the sidewalk.
This is where the reasoning becomes self-justifying. People use social conflict "arising" from immigration to justify ensuring migrants don't have the right to be in a country. But the conflict only "arises" from immigration if we start out believing that migrants don't have the right to be in that country. Arguments that justify themselves are mindsets, not arguments. Politicians might devote less energy to manufacturing fear and more energy to innovating on policy.
Alright then. But would easier emigration not hurt the development of those poorer countries that the people come from?
We are talking about immigration policy here. That is, we are not talking about whether people should or shouldn't stay in poor countries. We're talking about the extent to which rich countries should or shouldn't forcibly obstruct migration. That is what "migration policy" does. A visa doesn't oblige a person to move; a visa is a decision not to actively stop that person from moving.
So if we're talking about immigration policy, the question "Does migration substantially harm low-income countries?" is the same as the question, "Does forcibly stopping people from leaving low income countries substantially help those countries?" To put it mildly, social science has absolutely no evidence of such a effect.
Would it be different in poor countries? How about in poor areas of Africa? We do not need to wonder that either. Parts of Africa that are as prosperous as parts of Europe—Johannesburg, Pretoria, and Cape Town—have spent several generations actively blocking most black Africans from living and working there. Many people in those enclaves claimed that this was somehow beneficial to black Africans, encouraging them to "develop" their own lands. There is no evidence at all of such a positive effect.