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The Place Premium: Bounding the Price Equivalent of Migration Barriers

Michael A. Clemens1; Claudio E. Montenegro2; Lant Pritchett3

1 Center for Global Development and IZA · 2 World Bank, University of Chile, and German Development Institute · 3 Harvard Kennedy School

The Review of Economics and Statistics 2019 open access

Large international differences in the price of labor can be sustained by differences between workers or by natural and policy barriers to worker mobility. We use migrant selection theory and evidence to place lower bounds on the ad valorem equivalent of labor mobility barriers to the United States, with unique nationally representative microdata on both U.S. immigrant workers and workers in their 42 home countries. The average price equivalent of migration barriers in this setting for low-skill men is greater than $13,700 per worker per year. Natural and policy barriers may each create annual global losses of trillions of dollars.

DOI
10.1162/rest_a_00776
Volume
101 (2)
Pages
201-213
Language
en
Export
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