How much would the incomes of current Americans change under Open Borders?
In this short paper, I build a best-case estimate based on p. 133 of Caplan's graphic novel & my own prior work.
— Garett Jones 🏛️ (@GarettJones) November 14, 2019
Measuring the Sacrifice of Open Borders
George Mason University
Preliminary: Corrections Welcomed
How would Open Borders — a policy of unlimited immigration — change the wages of current residents of the United States? To answer this question, I begin by running the same quantitative experiment that Caplan runs on page 133 of his graphic novel Open Borders: The Science and Ethics of Immigration. This experiment presumes that the only two drivers of national income per capita are national average IQ and an un-explained productivity residual. I use the same constant returns to scale framework as Caplan, in which the migration of every human being to the United States would increase global output per capita by about 80%. I then estimate that in the benchmark model, where IQ’s social return is much larger than its private return, the per-capita income of current U.S. residents would permanently fall by about 40%. This is not an arithmetic fallacy: this is the average causal effect of Open Borders on the incomes of ex-ante Americans. This income decline occurs because cognitive skills matter mostly through externalities: because your nation’s IQ matters so much more than your own, as I claim in 2015’s Hive Mind. Therefore, a decline in a nation’s set of average cognitive skills will tend to reduce the productivity of the nation’s ex-ante citizens.