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

Jam

aica-

-GDP p

er ca

pita

Guyan

a--GDP p

er cap

ita

Paragu

ay--G

DP per c

apita

Jam

aica-

-inco

me

per n

at...

Brazil

--GDP p

er ca

pita

Guyan

a--inc

ome

per n

atura

l

Inco

me

per

per

son

(re

sid

ent

or

nat

ura

l)

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

Rat

io o

f w

ages

in

PP

P

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

Annu

al ea

nring

s (in

PPP)

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

Wa

ge

ra

tio

s o

f e

qu

iva

len

t w

ork

ers

, in

ho

me

a

nd

in

US

A

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

PP

P $

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?

A d a ir

A d a m s

A lla m a k e e

A p p a n o o s e

A u d o b o n

B e n to n

B la c kHa wk

B o o n e

B re m e r

B u c h a n a n

B u e n aV is ta B u tle r

Ca lh o u n

Ca rro ll

Ca s s

Ce d a r

Ce rroG o rd o

Ch e ro k e e

Ch ic k a s a w

Cla rk e

Cla y

Cla y to n

Clin to n

Cra wfo rd

Da lla s

Da visDe c a tu r

De la w a re

De sM o in e s

Dic k in s o n

Du b u q u e

E m m e t

Fa y e tte

Flo y d

Fra n k lin

Fre m o n t

G re e n e

G ru n d y

G u th rie

Ha m ilto n

Ha n c o c k

Ha rd in

Ha rris o n

He n ry

Ho wa rd

Hu m b o ld t

Id a

Io wa

Ja c k s o n

Ja s p e r

Je ffe rs o n

Jo h n s o n

Jo n e s

K e o k u k

K o s s u th

L e e

L in n

L o u is a

L u c a s

L y o n

M a d is o n M a h a s k aM a rio n

M a rs h a ll

M ills

M itc h e ll

M o n o n a

M o n ro eM o n tg o m e ry

M u s c a tin e

O Õ B rie n

O s c e o la

P a g e

P a loA lto

P ly m o u th P o c a h o n ta s

P o lk

P o tta wa tta m ie

P o we s h ie k

Rin g g o ld

S a c

S c o ttS h e lb y

S io u x

S to ryTa m a

Ta y lo r

Un io n

V a n B u re n

W a p e llo

W a rre n W a s h in g to n

W a y n e

W e b s te r

W in n e b a g o

W in n e s h ie k

W o o d b u ry

W o rth

W rig h t

A d a ir

A n d re w

A t c h is o n

A u d ra in

B a rry

B a rt o n

B a te s B e n to n

B o llin g e r

B o o n e

B u c h a n a n

B u t le r

Ca ld w e ll

Ca lla wa y

Ca m d e n

Ca p eG ira rd e a u

Ca rro ll

Ca rt e r

Ca s s

Ce d a r

Ch a rit o n

Ch ris t ia n

Cla rk

Cla y

Clin to n

Co le

Co o p e r

Cra w fo rd

Da d e

Da lla s

Da vie s s DeK a lb

De n t

Do u g la s

Du n k lin

F ra n k lin

G a s c o n a d e

G e n t ry

G re e n e

G ru n d y

Ha rr is o n

He n ry

Hic k o ry

Ho lt

Ho wa rd

Ho we ll

Iro n

Ja c k s o n

Ja s p e r

Je ffe rs o n

Jo h n s o n

K n o x

L a c le d e

L a fa y e t t e

L a w re n c e

L e w is

L in c o ln

L in n

L ivin g s t o n

M c Do n a ld

M a c o n

M a d is o n

M a rie s

M a rio n

M e rc e r

M ille r

M is s is s ip p i

M o n ite a u

M o n ro e

M o n t g o m e ry

M o rg a n

Ne w M a d r id

Ne wt o n

No d a wa y

O re g o n

O s a g e

O z a rk

P e m is c o t

P e rry

P e t t is

P h e lp s

P ik eP la t te

P o lk

P u la s k i

P u tn a m

Ra lls

Ra n d o lp hRa y

Re y n o ld s

Rip le y

S t . Ch a r le s

S t . C la ir

S t e .G e n e vie ve

S t .F ra n c o is

S t . L o u is

S a lin e

S c h u y le r S c o t la n d

S c o t t

S h a n n o n

S h e lb y

S t o d d a rdS t o n e

S u lliva n

Ta n e y

Te x a s

V e rn o n

W a rre n

W a s h in g to n

W a y n e

W e b s te r

W o rt h

W rig h t

S t . L o u isCit y

A dam s

A ntelope

A rthurB anner

B laine

B oone

B ox B utte

B oyd

B rown

B uffalo

B urt

B ut ler

C ass

C edar

C hase

C herry

C heyenne

C lay

C olfax

C um ing

C uster

D akota

D awes

D aws on

D euel

D ixon

D odge

D ouglas

D undy

F illm ore

Frank lin

Front ier

Furnas

G age

G arden

G arfield

G osper

G rant

G reeley

H allH am ilton

H arlan

H ayes

H itchcock

H olt

H ooker

H oward

Jefferson

Johns on

K earney

K eith

K eya P aha

K im ball

K nox

Lancaster

Lincoln

Logan

Loup

M cP herson

M adison

M errick

M orrill

N ance

N em aha

N uckolls

O toe

P awnee

P erk ins

P helps

P ierce

P lat te

P olk

R ed W illow

R ichardson

R ock

S aline

S arpyS aunders

S cot ts B luff

S eward

S heridan

S herm an

S ioux

S tanton

Thayer

Thom asThurs ton

V alley

W ashington

W ayne

W ebster

W heeler

Y ork

A llen

A nderson

A tc hison

B arber

B arton

B ourbon

B row n

B ut ler

C hase

C hautauquaC herokee

C heyenne

C lark

C lay

C loud

C offey

C om ancheC ow ley

C raw ford

D ecatur

D ick inson

D oniphan

D ouglas

E dw ards

E lk

E llis

E llsw orth

F inney

Ford

Frank lin

GearyGove

Graham

Grant

Gray

Greeley

Greenw ood

H am ilton

H arper

H arvey

H askell

H odgem an

Jacks on

Jefferson

Jew ell

Johns on

K earny

K ingm anK iow a

Labette

Lane

Leavenw orth

Lincoln

Linn

Logan

Lyon

M arion

M arshall

M cP herson

M eade

M iam i

M itchell

M ontgom ery

M orris

M orton

N em aha

N eosho

N ess

N orton

Osage

Osborne

Ottaw a

P aw nee

P hillips

P ot taw atom ie

P ratt

R aw lins

R eno

R epublic

R ice

R ileyR ooks

R ush

R ussell

S aline

S cot t

S edgw ic k

S ew ard

S haw nee

S heridanS herm an

S m ith

S tafford

S tanton

S tevens

S um ner

Thom as

Trego W abaunseeW allace

W ashington

W ichita

W ilson

W oodson

W y andot te

A u ro ra

B e a d le

B e n n e tt

B o nHo m m e

B ro o k in g s

B ro wn

B ru le

B u ffa lo

B u tte

Ca m p b e ll

Ch a rle s M ix

Cla rk

Cla y

Co d in g to n

Co rs o n

Cu s te r

Da vis o n

Da y

De u e l

De we y

Do u g la s

E d m u n d s

Fa ll R ive r

Fa u lkG ra n t

G re g o ry

Ha a k o n

Ha m linHa n d

Ha n s o n

Ha rd in g

Hu g h e s

Hu tc h in s o n

Hy d e

Je ra u ldJo n e s

K in g s b u ry

L a k e

L a w re n c e

L in c o ln

L y m a n

M c Co o k

M c P h e rs o nM a rs h a ll

M e a d e

M e lle tte

M in e r

M in n e h a h a

M o o d y

P e n n in g to n

P e rk in s

P o tte r

Ro b e rts

S a n b o rn

S h a n n o n

S p in k

S ta n le y

S u lly

To d d

Trip p

Tu rn e r

Un io n

W a lwo rth

Y a n k to n

Ja c k s o n

Zie b a c h

A d a m s

B a rn e s

B e n s o n

B ill in g s

B o ttin e a u

B o wm a n

B u rk e

B u rle ig h

Ca s s

Ca va lie r

Dic k e y

Divid e

Du n n

E d d y

E m m o n s

Fo s te r

G o ld e nV a lle y

G ra n dFo rk s

G ra n t

G rig g s

He ttin g e r

K id d e r

L a M o u reL o g a n

M c He n ry

M c In to s h

M c K e n z ieM c L e a n

M e rc e r

M o rto n

M o u n tra il

Ne ls o n

O live r

P e m b in a

P ie rc e Ra m s e y

Ra n s o m

Re n ville

Ric h la n d

Ro le tte

S a rg e n t

S h e rid a n

S io u x

S lo p e

S ta rk

S te e le

S tu ts m a n

To w n e r

Tra il l

W a ls hW a rd

W e lls

W ill ia m s

W o o d wa rd

A d a ir

A lfa lfa

A t o k a

B e a ve r

B e c k h a m

B la in e

B ry a n

Ca d d o

Ca n a d ia n

Ca rt e r

Ch e ro k e e

Ch o c t a w

Cim a rro n

Cle ve la n d

Co a lCo m a n c h e

Co t t o n

Cra ig

Cre e k

Cu s te r

De la w a re

De we y

E llis

G a rfie ld

G a rvin

G ra d y

G ra n t

G re e r

Ha rm o n

Ha rp e r

Ha s k e ll

Hu g h e s

Ja c k s o n

Je ffe rs o n

Jo h n s to n

K a y

K in g fis h e r

K io waL a t im e r

L e F lo re

L in c o ln

L o g a n

L o ve

M c Cla in

M c Cu rt a in

M a c In t o s h

M a jo r

M a rs h a ll

M a y e s

M u rra y

M u s k o g e e

No b le

No wa t a

O k fu s k e eO k la h o m a

O k m u lg e e

O s a g e

O t t a w a

P a wn e e

P a y n e

P it t s b u rg

P o n to to c

P o t t a w a t o m ie

P u s h m a t a h a

Ro g e r M ills

Ro g e rs

S e m in o le

S e q u o y a h

S t e p h e n s

Te x a s

Tillm a n

Tu ls a

W a g o n e r

W a s h in g to n

W a s h it a

W o o d s

A rk ansas

A shley

B ax terB entonB oone

B radley

C alhoun

C arroll

C hicot

C lark

C lay

C leburne

C leveland

C olum bia

C onw ay

C raighead

C raw ford

C rit tendenC ross

D allasD esha

D rew

Faulkner

F rank lin

Fulton

G arland

G rant

G reene

H em pstead

H ot S pring

H ow ard

Independence

Iz ard

Jacks on

Jefferson

Johns on

Lafayet te

Law rence

Lee

Lincoln

Litt le R iver

Logan

Lonoke

M adison

M arion

M iller

M is s iss ippi

M onroeM ontgom ery

N evada

N ew ton

O uachita

P erry

P hillips

P ike

P oins et t

P olk

P ope

P rairieP ulas k i

R andolph

S t. F ranc is

S aline

S cot t

S earcy

S ebas t ian

S evier

S harp

S tone

U nion

V an B uren

W ashington

W hiteW oodruff

Y ell

A d a m s

A lc o r n

A m it e

A t t a la

B e n t o n

B o liv a r

C a lh o u n

C a r r o ll

C h ic k a s a w

C h o c t a w

C la ib o r n eC la r k e

C la y

C o a h o m a

C o p ia h

C o v in g t o n

D e S o t o

F o r r e s tF r a n k lin

G e o r g e

G r e e n e

G r e n a d a

H a n c o c k

H a r r is o n

H in d s

H o lm e sH u m p h r e y s

Is s a q u e n a

It a w a m b a

Ja c k s o n

Ja s p e r

Je f f e r s o nD a v is

Jo n e s

K e m p e r

L a f a y e t t e

L a m a r

L a u d e r d a le

L a w r e n c e

L e a k e

L e e

L e f lo r e

L in c o ln

L o w n d e s

M a d is o n

M a r io n

M a r s h a ll

M o n r o e

M o n tg o m e r y

N e s h o b a

N e w to n

N o xu b e e

O k t ib b e h a

P a n o la

P e a r l R iv e r

P e r r yP ik e

P o n t o to c

P r e n t is s

Q u itm a n

R a n k in

S c o t t

S h a r k e y

S im p s o n

S m it h

S to n e

S u n f lo w e r

T a lla h a t c h ie

T a t eT ip p a h

T is h o m in g o

T u n ic a

U n io n

W a lt h a ll

W a r r e n

W a s h in g to n

W a y n e

W e b s t e r

W ilk in s o n

W in s t o n

Y a lo b u s h a

Y a zo o

Je f f e r s o n

Autauga

Baldwin

Barbour

Bibb

Blount

Bulloc k

Butle r

Calhoun

Cham bers

Cherok ee

Chilton

Choc taw

Clark e

Clay

Cleburne

Coffee

Colbert

Conec uh

Coos a

Covington

Crens haw

Cullm an

Dale

Dallas

De Kalb

Elm ore

Es c am bia

Etowah

F ay ette

F rank lin

Geneva

Greene

Hale

Henry

Hous ton

Jac k s on

Jeffers onLam ar

Lauderda le

Lawrenc e

Lee

Lim es tone

Lowndes

M ac on

M adis on

M arengo

M arion

M ars ha ll

M obile

M onroe

M ontgom ery

M organ

Perry

Pic k ens

Pik e

Randolph

Rus s ell

S t. Cla ir

Shelby

Sum ter

Ta lladega

Ta llapoos a

Tus c aloos a

W alk er

W as h ington

W ilc ox

W ins ton

S t. M a rtin

S t. M a rtin

A c a d ia

A lle n

A s c e n s io n

A s s u m p tio n

A vo y e lle s

B e a u re g a rd

B ie n vil le

B o s s ie r

Ca d d o

Ca lc a s ie u

Ca ld w e ll

Ca m e ro n

Ca ta h o u la

Cla ib o rn e

Co n c o rd ia

De S o to

E a s tB a to n

Ro u g e

E a s tCa rro ll

E a s tFe lic ia n a

E va n g e lin e

Fra n k lin

G ra n t

Ib e ria

Ib e rvil le

Ja c k s o n

Je ffe rs o n

Je ffe rs o nDa vis

L a fa y e tte

L a fo u rc h e

L a S a lle

L in c o ln

L ivin g s to n

M a d is o n

M o re h o u s e

Na tc h ito c h e s

O rle a n s

O u a c h ita

P la q u e m in e s

P o in teCo u p e e

Ra p id e s

Re dRive r

Ric h la n d

S a b in e

S t. B e rn a rdS t. Ch a rle s

S t.He le n a

S t. Ja m e s

S t. Jo h nth e B a p tis t

S t. L a n d ry

S t. M a ry

S t. Ta m m a n y

Ta n g ip a h o a

Te n s a s

Te rre b o n n e

Un io n

V e rm ilio n

V e rn o n

W a s h in g to n

W e b s te r

W e s tB a to nRo u g e

W e s tCa rro ll

W e s tFe lic ia n a

W in n

A n d e rso n

A n d re w s

A n g e l i n a

A ra n sa s

A rc h e r

A rm st ro n g

A ta sc o sa

A u st i n

B a i l e y

B a n d e ra

B a st ro p

B a y l o r

B e e

B e l l

B e x a r

B l a n c o

B o rd e n

B o sq u e

B o w i e

B ra z o r i a

B ra z o s

B re w st e r

B ri sc o e

B ro o ks

B ro w n

B u r l e so n

B u rn e t

C a l d w e l l

C a l h o u n

C a l l a h a n

C a m e ro n

C a m p

C a rso n

C a ss

C a st ro

C h a m b e rs

C h e ro ke e

C h i l d re ss

C l a y

C o c h ra n

C o ke

C o l e m a n

C o l l i n

C o l l i n g sw o rth

C o l o ra d o

C o m a l

C o m a n c h e

C o n c h o

C o o ke

C o ry e l l

Cottle

C ra n e

C ro c ke t t

C ro sb y

C u l b e rso n

D a l l a m

D a l l a sD a w so n

D e a f S m i t h

D e l ta

D e n t o n

D e W i t t

D i c ke n s

D i m m i t

D o n l e y

D u v a l

E a st l a n d

E c t o r

E d w a rd s

E l l i s

E l P a so

E ra th

F a l l s

F a n n i n

F a y e t t e

F i sh e r

F l o y d

Foard

F o rt B e n d

F ra n kl i n

F re e st o n e

F r i o

G a i n e s

G a l v e sto nG a l v e sto n

G a rz a

G i l l e sp i e

G l a ssc o c k

G o l i a d

G o n z a l e s

G ra y

G ra y so n

G re g g

G ri m e s

G u a d a l u p e

H a l e

H a l l

H a m i l to n

H a n sf o rd

H a rd e m a n

H a rd i n

H a rri s

H a rri so n

H a rt l e y

H a ske l l

H a y s

H e m p h i l l

H e n d e rso n

H i d a l g o

H i l l

H o c kl e y

H o o d

H o p ki n s

H o u st o n

H o w a rd

H u d sp e t h

H u n t

H u t c h i n so n

I ri o n

J a c k

J a c kso n

J a sp e r

J e f f D a v i s

J e f f e rso n

J i m H o g g

J i mW e l l s

J o h n so n

J o n e s

K a rn e s

K a u f m a n

K e n d a l l

K e n e d y

K e n t

K e rr

K i m b l e

K i n g

K i n n e y

K l e b e rg

K n o xL a m a r

L a m b

L a m p a sa s

L a S a l l e

L a v a c a

L e e

L e o n

L i b e rty

L i m e sto n e

L i p sc o m b

L i v e O a k

L l a n o

L o v i n g

L u b b o c k

L y n n

M c C u l l o c h

M c L e n n a n

M c M u l l e n

M a d i so n

M a ri o n

M a rt i n

M a so n

M a ta g o rd a

M a v e r i c k

M e d i n a

M e n a rd

M i d l a n d

M i l a m

M i l l s

M i t c h e l l

M o n t a g u e

M o n t g o m e ry

M o o re

M o rr i s

Motley

N a c o g d o c h e s

N a v a rro

N e w to n

N o l a n

N u e c e s

O c h i l t re e

O l d h a m

O ra 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 c o s P o l k

P o t te r

P re si 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 rts

R o b e rtso n

R o c kw a l l

R u n n e l s

R u sk

S a b i n e

S a nA u g u st i n e

S a nJ a c i n t o

S a n P a t r i c i o

S a n S a b a

S c h l e i c h e r

S c u rryS h a c kl e fo rd

S h e l b y

S h e rm a n

S m i t h

S o m e rv e l l

S ta rr

S te p h e n s

S te rl i n g

S to n e w a l l

S u t to n

S w i sh e r

T a rra n t

T a y l o r

T e rre l l

T e rry T h ro c km o rto n T i t u s

T o mG re e n

T ra v i s

T ri n i t y

T y l e r

U p sh u r

U p t o n

U v a l d e

V a l V e rd e

V a nZ a n d t

V i c to ri a

W a l ke r

W a l l e r

W a rd

W a sh i n g t o 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 rg 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 kl e 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 e tw een 0 an d 5 ,0 0 0P u r p le= C o u n ty D ec lin ed ; N et D ec lin e b e tw een 5 ,0 0 0 an d 1 0 ,0 0 0Blu e= C o u n ty D ec lin ed ; N et D ec lin e g r ea te r th an 1 0 ,0 0 0G r een = C o u n 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

0

10

20

30

40

50

60

70

80

90

1958

1968

1972

1978

1983

1991

1994

1997

2002

2003

2004

2007

(Jun

e)

2007

(Sep

t)YearPerc

en

tag

e o

f P

op

ula

tion

Percentage of PopulationApproving

And social change takes time.. But can be complete

1992

LA riots spurred by tape of Rodney King beating

1963

MLK’s March on Washington

Barack Obama runs for President

of the United States

MLK assassinated