Few questions about migration are argued as fiercely as the economic ones, and few are as often answered with slogans. Researchers agree on more than the shouting suggests, but they also disagree in ways that matter, especially about who gains and who loses.

The place premium

Start with migrants themselves. Economists Michael Clemens, Claudio Montenegro and Lant Pritchett compared workers with the same education, age and experience inside and outside their home countries. They found that the same worker earns several times more in a rich country, often three to ten times, simply because of where the work is done. They called this the place premium. It suggests that much of global inequality comes from location, not from the people themselves.

From that gap some economists derive a striking claim: if workers could move freely, world output might rise by a large fraction, with some estimates ranging from 50 to 150 percent. These estimates of very large gains depend on enormous numbers of people moving, and critics doubt the assumptions. Some, such as Paul Collier, argue that rich countries are productive because of their institutions and social trust, and that very rapid migration could change the conditions that make the gains possible. The gains, they say, are real but uncertain.

Jobs are not a fixed pie

A common worry is that every job taken by an immigrant is a job lost by a native. Economists call this the lump of labor fallacy: assuming the number of jobs in an economy is fixed. Immigrants also spend money, start businesses and fill roles that let others move up. Studies of American states found that when less educated immigrants arrived, native workers with similar schooling tended to shift toward jobs needing communication in English, where they had an advantage. Workers who complement each other can both gain.

That does not mean no one loses. Those most likely to face direct competition are workers whose skills most closely match the newcomers'. A major 2016 report by the US National Academies of Sciences found small wage effects on natives overall, but noted that the groups most likely to feel wage competition are earlier immigrants and workers without a high school diploma.

The Mariel debate

In 1980 about 125,000 Cubans arrived in Miami within a few months, a sudden jump in the city's labor supply that economists treat as a natural experiment. In 1990 David Card compared Miami with similar cities and found little effect on the wages or unemployment of less skilled workers. In 2017 George Borjas reanalysed the data, focused on non-Hispanic men without a high school diploma, and reported a sharp drop in their wages. Other economists answered that his subgroup was so small that the result could be noise. The debate continues, and it shows how much a conclusion can depend on which workers you count.

Taxes, remittances and skills

Do migrants pay more in taxes than they use in services? The National Academies report found that the answer depends mainly on migrants' age and education. Working-age, well educated migrants tend to be large net contributors; less educated and older migrants can be net costs, especially to local governments that pay for schools. The children of immigrants were among the strongest fiscal contributors of any group.

Money also flows the other way. The World Bank estimated that remittances to low and middle income countries reached about 656 billion dollars in 2023, more than official foreign aid. They go straight to families and pay for food, schooling and medicine.

When nurses and doctors leave poor countries, health systems suffer, a problem called brain drain. Yet some research points to brain gain: the chance to emigrate encourages more people to train, and many of them stay home. The Philippines trains far more nurses than it sends abroad. Which effect dominates differs from country to country.

High-skilled migration

Rich countries compete hard for scientists, engineers and doctors. In the United States, immigrants are heavily overrepresented among patent holders, founders of large technology companies and Nobel Prize winners in the sciences. Supporters of skilled migration see this as clear gain; critics ask whether poor countries that paid to educate these people deserve some return, and whether recruiting abroad lets rich countries neglect training their own citizens.

Worked example: a sudden arrival

Suppose 60,000 people arrive in a mid-sized city of two million within a year. In the short run, rents rise, schools fill, and workers in cleaning, construction and food processing may see more competition, including earlier immigrants. Employers, landlords and consumers gain; so do the newcomers, who may earn several times what they did before. Over a few years, new shops and homes are built, demand grows, and many of the newcomers start paying taxes. Average effects end up small. But averages can hide real losses for particular people in particular places, and a sound policy asks not only whether a city gains overall, but whether those who bear the costs are helped through the transition.