From Nationals to Naturals: It’s a Natural Way to Think

Lant PritchettInternational Migration: Challenges and Opportunities

in the New Age of MobilityPublic Affairs Conference 2008

April 11, 2008

Five Points• The usual structuring of the migration discussion into

impacts on “sending” and “receiving” countries is structured to ignore the gains to the movers

• Focus instead on income per natural—the income of people born in a given place

• The wage gaps across workers are larger than ever in history—and are largely pure discrimination

• Given the existing wage gaps there is nothing on the agenda to address gaps in income per natural remotely like allowing labor mobility

• The “myth” at the heart of the existing international system will eventually have to be re-thought

The iron grip of place based thinking

• Imagine a worker with above average income in a poor country moves to a rich country and makes twice as much but that is a below average wage—and there are no effects on anyone else (and the mover is much happier)

• Average wages in the sending country fall• Average wages in the receiving country also fall.• So migration is a bad thing? Because analysis of

sending and receiving countries reveals not benefits?

Income per natural

• Think of the income per natural, per person of people born in Jamaica, that is, Jamaicans, no matter where they happen to reside

• Income per natural is a measure of development of Jamaicans.

• One is a place based measure and one is a people based measure

“Guyana” poorer than Paraguay but Guyanese are richer than Brazil

0100020003000400050006000700080009000

Jamaic

a--GDP pe

r cap

ita

Guyan

a--GDP pe

r cap

ita

Paragu

ay--G

DP per c

apita

Jamaic

a--inc

ome p

er na

t...

Brazil--

GDP per c

apita

Guyan

a--inco

me per

natural

Inco

me

per p

erso

n (re

side

nt o

r nat

ural

)

Wages gaps across countries are larger than ever before in history

2.33.6 4.1 4.4

2.4

6.17.2 7.6

9.0 9.1

0.01.02.03.04.05.06.07.08.09.0

10.0

Ratio

of w

ages

in P

PP

Wage gaps are largely discrimination paying different wages to workers of equal

productivity on either side of the border

0

5000

10000

15000

20000

25000

Ann

ual e

anrin

gs (in PP

P) In home

In USA

Annualized wages of equivalent workers—same nationality, education, age, sex, urban residence, sector on either side of the border

Discrimination induced by the US border exceeds any other form of wage discrimination—and rivals

the wage impact of slavery

0

2

4

6

8

10

12

14

Wag

e ra

tios

of e

quiv

alen

t wor

kers

, in

hom

e an

d in

USA

Slavery in Virginia,1840-1860, ratio rentalto subsistence: 3.8

Relaxing the discrimination against foreign naturals participation in labor markets produces

larger gains than anything else available

• For micro-based interventions compare the per person gain to the number of days/weeks of gains from labor mobility

• Compare aggregate gains of “reforms” on the world agenda

The total present value of access to a lifetime of micro-credit is the wage difference of 8 weeks work of the same worker in USA

versus in Bangladesh

Source: Gains estimated from Pitt and Khandker for micro-credit (annual gain of 14 percent of per capita HH consumption, CMP (forthcoming) for wages

0.0

2000.0

4000.0

6000.0

8000.0

10000.0

12000.0

14000.0

Annual gain,micro-credit

Monthly gain,migration

Net presentValue, lifetimeof micro-credit

Annual gain,migration

PPP

$

Logic of the Pax Americana

• Proliferation of sovereigns—with decolonization and end of empires many more states with borders

• Free trade in goods promoted• Free trade in capital promoted• No expectation of labor mobility

Implicit Myth: Every sovereign state is capable of an adequate standard of living for its

naturals within its sovereign borders

Is the myth true?• Population mobility across physical space has

been a constant of human history for as long as there has been human history

• Within large countries, like the USA, there is massive gross and net labor mobility over time—the emptying out of the rural middle

• The borders created by colonialists were not driven by the logic of viable entities

• No deep reason from economic theory to suppose this is so

Are we sure there are no ghost countries?

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N u e c e s

O ch i l t re e

O l d h a m

O r a n g e

P a l o P i n to

P a n o l a

P a rke r

P a rm e r

P e co s P o l k

P o t t e r

P re s i d i o

R a i n s

R a n d a l l

R e a g a n

R e a l

R e d R i v e r

R e e v e s

R e f u g i o

R o b e r ts

R o b e r tso n

R o c kw a ll

R u n n e l s

R u sk

S a b i n e

S a nA u g u s t i n e

S a nJ a ci n t o

S a n P a t ri c i o

S a n S a b a

S c h l e i ch e r

S c u r ryS h a c kl e fo rd

S h e l b y

S h e r m a n

S m i t h

S o m e rv e l l

S ta rr

S t e p h e n s

S te rl i n g

S t o n e w a l l

S u tto n

S w i s h e r

T a rra n t

T a yl o r

T e rre l l

T e rry T h ro ck m o r to n T it u s

T o mG re e n

T ra v is

T ri n i t y

T yl e r

U p sh u r

U p to n

U v a l d e

V a l V e rd e

V a nZ a n d t

V i cto ri a

W a l ke r

W a l l e r

W a r d

W a s h i n g to n

W e b b

W h a rto n

W h e e l e r

W i c h i t a

W i l b a r g e r

W i l l a c y

W i l l i a m so n

W i l so n

W i n k le r

W i se

W o o d

Y o a ku m Y o u n g

Z a p a ta

Z a v a l a

R ed = C o u n ty D ec lin ed ; N et D ec lin e b etw een 0 an d 5 ,0 0 0P u r p le= C ou n ty D ec lin ed ; N e t D ec lin e b etw een 5 ,0 0 0 an d 1 0 ,0 0 0Blu e= C o u n ty D ec lin ed ; N e t D ec lin e g r ea ter th an 1 0 ,0 0 0G r een = C o un ty I n c r eas ed b y m o r e th an 1 0 ,0 0 0

The emptying of the heartland (only green shaded counties had substantial population increase over

a 60 year period)

Massive Internal Mobility: Contiguous regions of the USA are a third their demographic counter-factual size

Region of the United States(contiguous counties)

% change in population 1930-1990

Ratio of current populationto counter factual at rate of natural increase

Number of countries (of 192) with smaller area(with examples)

Ratio of area per capita income to national average

Texlahoma -36.8% 0.31 117/192(Nicaragua,Bangladesh)

92.2%

Heartland -34.0% 0.33 117/192 85.2%

Deep South -27.9% 0.36 96/192(Jordan, Austria, Sri Lanka)

62.6%

What I did not say

• The usual discussions of “sending country” impacts (remittances, brain drain) are driven by place based thinking

• Income per natural is people based thinking that is the natural way to think

• We are swimming in an ideology of nationalism—that may or may not continue

Attitudes towards Interracial Marriage in the US

0102030405060708090

1958

1968

1972 19

7819

83 1991

1994 19

9720

0220

0320

04

2007

(June

)

2007

(Sep

t)YearPerc

enta

ge o

f Pop

ulat

ion

Percentage of PopulationApproving

And social change takes time.. But can be complete

1992LA riots spurred by tape of Rodney King beating

1963MLK’s March on Washington

Barack Obama runs for President

of the United States

MLK assassinated