“The geography of development: Evaluating migration restrictions and coastal flooding” (Klaus Desmet)

Where a person lives determines wellbeing, productivity and income. But choice of location is not a permanent or free choice. Desmet et al look at how migratory restrictions shape the welfare and global distribution of economic activity over time. The researchers develop a model for the world economy in form of dynamic spatial growth model incorporating geography, trade, migration, innovation and diffusion of technology. Using data for the world economy, they split the world into 1×1 degree cells and study the economic impact of completely or partially relaxing the migration restrictions that exist today. The model indicates that with unchanged migration restrictions the high population density places will gradually become high productivity places over time. Liberalizing migration fully would increase world welfare more than threefold and there would be substantial changes in the distribution of economic activity. The study also models the welfare impact on the world economy of a demographic shock in form of a 1 or 6 meter rise in sea levels. The results indicate that coastal flooding has important dynamic and geographic implications for welfare in the world economy and these vary depending on the global migration restrictions.

Discussion:

  • Endogenous changes in fundamental amenities?
    • Are amenities time-invariant?
    • Are they likely to capture other endogenous characteristics?
  • Non-legal Barriers of migration?
    • Studies suggest that there are substantial non legal migration costs across countries. How would incorporating these impact on the gains?
  • Pace of sea-level rise?
    • The paper simulates the sea-level rise as a sudden shock. However, sea-levels are expected to rise gradually and the question is how incorporating these would affect the results.
By MILJAN SLADOJE, Country Economist, IGC Zambia