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What is the greatest single class of distortions in the global economy? One contender for this title is the tightly binding constraints on emigration from poor countries. Vast numbers of people in low-income countries want to emigrate from those countries but cannot. How large are the economic losses caused by barriers to emigration? Research on this question has been distinguished by its rarity and obscurity, but the few estimates we have should make economists' jaws hit their desks. The gains to eliminating migration barriers amount to large fractions of world GDP—one or two orders of magnitude larger than the gains from dropping all remaining restrictions on international flows of goods and capital. When it comes to policies that restrict emigration, there appear to be trillion-dollar bills on the sidewalk.

Studies have reached conflicting conclusions regarding the labor market effects of exogenous refugee waves such as the Mariel Boatlift in Miami. The authors show that contradictory findings on the effects of the Mariel Boatlift can be explained by a large difference in the pre- and post-Boatlift racial composition in certain very small subsamples of workers in the Current Population Survey. This compositional change is specific to Miami and unrelated to the Boatlift. They also show that conflicting findings on the labor market effects of other important refugee waves are caused by spurious correlation in some analyses between the instrument and the endogenous variable, introduced by applying a common divisor to both. As a whole, the evidence from refugee waves reinforces the existing consensus that the impact of immigration on average native-born workers is small, and it fails to substantiate claims of large detrimental effects on workers with less than a high school education.

Concern has intensified in recent years that many instrumental variables used in widely-cited growth regressions may be invalid, weak, or both. Attempts to remedy this general problem remain inadequate. We show how a range of published studies can offer more evidence that their results are not spurious. Key steps include: grounding growth regressions in more generalized theoretical models, deployment of new methods for estimating sensitivity to violations of exclusion restrictions, opening the \"black box\" ofGMM with supportive evidence of instrument strength, and utilization of weak-instrument robust tests and estimators.

The past several decades have witnessed a rebirth of global labor mobility. Workers are moving between countries at rates not seen since before World War I. During the same period, economists' study of international migration has been framed by a particular textbook model of location choice. This paper reviews the evidence on the economic causes and effects of global migration during the past half century. That evidence falsifies most of the core predictions of the old model. The economics of migration will regain vitality and relevance by discarding and replacing its outworn paradigm.

Purpose The purpose of this paper is to critique the last decade of research on the effects of high-skill emigration from developing countries, and proposes six new directions for fruitful research. Design/methodology/approach The study singles out a core assumption underlying much of the recent literature, calling it the “Lump of Learning model” of human capital and development, and describes five ways that research has come to challenge that assumption. It assesses the usefulness of that model in the face of accumulating evidence. Findings The axioms of the Lump of Learning model have shaped research priorities in this literature, but many of those axioms do not have a clear empirical basis. Future research proceeding from established facts would set different priorities, and would devote more attention to measuring the effects of migration on skilled migrant households, rigorously estimating human capital externalities, gathering microdata beyond censuses, and carefully considering optimal policy – among others. Originality/value The recent literature has pursued a series of extensions to the Lump of Learning model. This study urges instead discarding that model, pointing toward a new paradigm for research on skilled migration and development.

An important class of active labor market policy has received little impact evaluation: immigration barriers intended to raise wages and employment by shrinking labor supply. Theories of endogenous technical advance raise the possibility of limited or even perverse impact. We study a natural policy experiment: the exclusion of almost half a million Mexican bracero farm workers from the United States to improve farm labor market conditions. With novel labor market data we measure state-level exposure to exclusion, and model the absent changes in technology or crop mix. We fail to reject zero labor market impact, inconsistent with this model.

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.

The World Bank was founded to address what we would today call imperfections in international capital markets. Its founders thought that countries would borrow from the Bank temporarily until they grew enough to borrow commercially. Some critiques and analyses of the Bank are based on the assumption that this continues to be its role. For example, some argue that the growth of private capital flows to the developing world has rendered the Bank irrelevant. However, we will argue that modern analyses should proceed from the premise that the World Bank’s central goal is and should be to reduce extreme poverty, and that addressing failures in global capital markets is now of subsidiary importance. In this paper, we discuss what the Bank does: how it spends money, how it influences policy, and how it presents its mission. We argue that the role of the Bank is now best understood as facilitating international agreements to reduce poverty, and we examine implications of this perspective.

While measured remittances by migrant workers have recently soared, macroeconomic studies have difficulty detecting their effect on economic growth. We propose three new explanations for this puzzle. First, a large majority of the recent rise in measured remittances may be illusory - arising from changes in measurement. Second, cross-country regressions may lack power to detect such growth effects. Third, remittances rise primarily with rising emigration, whose opportunity cost to GDP creates endogeneity bias. Migration and remittances clearly have first-order effects on poverty, migrant households' welfare and global GDP but detecting the effect of remittances on economic growth faces important challenges.

Recent research yields widely divergent estimates of the cross-country relationship between foreign aid receipts and economic growth. We re-analyse data from the three most influential published aid-growth studies, strictly conserving their regression specifications, with sensible assumptions about the timing of aid effects and without questionable instruments. All three research designs show that increases in aid have been followed on average by increases in investment and growth. The most plausible explanation is that aid causes some degree of growth in recipient countries, although the magnitude of this relationship is modest, varies greatly across recipients and diminishes at high levels of aid.