Technology Superiority and the Losses from Migration

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" Technology Superiority and the Losses from Migration "
Davis, Donald R.

Document Type	:	AL
Record Number	:	900126
Doc. No	:	LA0rf2p9pn
Title & Author	:	Technology Superiority and the Losses from Migration [Article]\ Davis, Donald R.
Date	:	2005
Title of Periodical	:	UCLA
Abstract	:	Two facts motivate this study. (1) The United States is the world’s most productive economy. (2) The US is the destination for a broad range of net factor inflows: unskilled labor, skilled labor, and capital. Indeed, these two facts may be strongly related: All factors seek to enter the US because of the US technological superiority. The literature on international factor flows rarely links these two phenomena, instead considering one-at-a-time analyses that stress issues of relative factor abundance. This is unfortunate, since the welfare calculations differ markedly. In a simple Ricardian framework, a country that experiences immigration of factors motivated by technological differences always loses from this migration relative to a free trade baseline, while the other country gains. We provide simple calculations suggesting that the magnitude of the losses for US natives may be quite large – between