Immigration and Protectionism
Abstract
The economic rationale for immigration is in large part based on the potential economic gains to be made by migration. A common argument made against an inflow of immigrants is that while the immigrants are better off, they will not only displace native-born workers, but also lower their wages. Unfortunately, this outcome is not the only one produced by an immigration inflow. The argument rests on the implicit assumption that the national economy is mostly a closed economy. Under such an assumption, the analysis is correct. The inflow will reduce the capital to labor ratio and thus the wage rate earned by workers. However, that is not the only possibility. Under an open economy, the inflow need ...
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