Open Borders with Migration Taxes Are the Optimal Policy

Abstract

For some reason, economists are less willing to advocate open migration than free trade, even though the traditional free trade models, such as Ricardian comparative advantage and Heckscher-Ohlin, cross-apply to migration. In fact, however, the case for open migration is stronger than the case for free trade, because it is possible to tax foreign-born beneficiaries of open migration policies, through migration taxes. It is here proven that a policy of open borders with migration taxes is Pareto-superior to the alternative of closed borders (or discretionary migration control). Political norms of local inequality aversion seem to prevent the adoption, or even consideration, of such a policy, and the enormous gains in human welfare that would result from it. Some proposals, including a World Migration Organization and passport-free charter cities, are proposed as steps towards a world of open migration.