24 January 2017

You don’t need to be a cosmopolitan to support more migration

New from Dani Rodrik:

"how strong a preference must we have for our fellow citizens relative to foreigners to justify the existing level of barriers on international labor mobility? More concretely, let φ stand for the weight in our social welfare function on the utility of domestic citizens relative to the utility of foreigners.

When φ=1, we are perfect cosmopolitans and we see no difference between a citizen and a foreigner. When φ→∞, foreigners might starve to death and we wouldn’t care.

For the policy in question [allowing the movement of 60 million workers from poor to rich nations] to reduce social welfare in the rich countries, it turns out that φ must be larger than 4.5. Is a welfare premium of 450 percent for fellow citizens excessive? Is it reasonable to think that a foreigner is worth less than 22 percent a citizen?"