Globalization and Immigration

Here’s a common question I hear when debating immigration and globalization:

“If the world is becoming so much wealthier due to globalization, then why are so many people from nations with rapid economic growth immigrating to the U.S.? Shouldn’t they stay in their native countries if they are truly developing?”

The answer, I think, is that a rural Chinese peasant with an income of $100 per annum cannot possible afford to move to the United States. But if that peasant’s income rises to $5000 per annum due to accelerating economic growth, he can suddenly afford to move to a place where he can increase his income even further.

How many immigrants do you know from desperately poor places like Sub-Saharan Africa or other places untouched by globalization? Probably not many (if any). But how many do you know from places impacted by globalization like China, India, Brazil, or Mexico? Probably quite a few.

As economic growth picks up, we should expect to see more immigration at first, then to see decreasing rates of immigration as incomes rise beyond a certain threshold. Increasing incomes give people more options, not just for consumption or investment, but also for immigration.