The Economic Costs to International Labor Restrictions: Revisiting the Empirical Discussion

In a 1984 article, Hamilton and Whalley calculated the annual efficiency gains from free international migration. We update that study to compare developments over time, with the aim of producing more reasonable and politically-relevant scenarios. Our results suggest that the estimated gains from the liberalization of global immigration controls have increased substantially. Indeed, we find that even a small liberalization of international migration restrictions can still yield substantial gains. In particular, we estimate that a 10% increase in international migration corresponds to an efficiency gain of about US$774 billion (1998) dollars.