Gains from Trade versus Gains from Migration: What Makes Them So Different?

Would unrestricted “economic” migration enhance the potential gains from free trade? With free migration, consumers' feasible sets become non‐convex. Under standard assumptions, however, Walrasian equilibrium exists for a continuum of individuals with dispersed ability to afford each of a finit...

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Bibliographic Details
Published in:Journal of public economic theory 2006-01, Vol.8 (1), p.145-170
Main Authors: HAMMOND, PETER J., SEMPERE, JAUME
Format: Article
Language:English
Subjects:
Economic theory
International
Migration
Studies
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Summary:Would unrestricted “economic” migration enhance the potential gains from free trade? With free migration, consumers' feasible sets become non‐convex. Under standard assumptions, however, Walrasian equilibrium exists for a continuum of individuals with dispersed ability to afford each of a finite set of possible migration plans. Then familiar conditions ensuring potential Pareto gains from trade also ensure that free migration generates similar supplementary gains, relative to an arbitrary status quo. As with the gains from customs unions, however, wealth may have to be redistributed across international borders.
ISSN:1097-3923
1467-9779
DOI:10.1111/j.1467-9779.2006.00256.x