People Flows in Globalization

Richard B. Freeman

NBER Working Paper No. 12315
Issued in June 2006
NBER Program(s):   ITI   LS

People flows refers to the movement of people across international borders in the form of immigration, international student flows, business travel, and tourism. Despite its peripheral status in debates over globalization, the movement of people from low income to high income countries is fundamental in global economic development, with consequences for factor endowments, trade patterns, and transfer of technology. In part because people flows are smaller than trade and capital flows, the dispersion of pay for similarly skilled workers around the world exceeds the dispersion of the prices of goods and cost of capital. This suggests that policies that give workers in developing countries greater access to advanced country labor markets could raise global economic well-being considerably. The economic problem is that immigrants rather than citizens of immigrant-receiving countries benefit most from immigration. The paper considers "radically economic policies" such as auctioning immigration visas or charging sizeable fees and spending the funds on current residents to increase the economic incentive for advanced countries to accept greater immigration.

download in pdf format
   (192 K)

email paper

A non-technical summary of this paper is available in the February 2007 NBER digest.  You can sign up to receive the NBER Digest by email.

This paper is available as PDF (192 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12315

Published: Freeman, Richard B. "People Flows In Globalization," Journal of Economic Perspectives, 2006, v20(2,Spring), 145-170. citation courtesy of

Users who downloaded this paper also downloaded these:
Estevadeordal and Taylor w14264 Is the Washington Consensus Dead? Growth, Openness, and the Great Liberalization, 1970s-2000s
Alesina, Glaeser, and Sacerdote w8524 Why Doesn't the US Have a European-Style Welfare System?
Diamond and Rajan w14739 The Credit Crisis: Conjectures about Causes and Remedies
Blanchard and Wolfers w7282 The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence
Alfaro, Kalemli-Ozcan, and Volosovych Capital Flows in a Globalized World: The Role of Policies and Institutions
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us