When there are strong impediments to people’s movement however, differing trajectories in local labor markets can lead to costly and harmful imbalances. For instance, when there is strong competition in a local market for relatively few workers that fit the appropriate profile and restrictions on entry, wages will tend to rise and the cost of doing business will increase, potentially stifling economic expansion if allowed to progress to extremes. Conversely, in a location where there are many workers with similar skills, low levels of labor demand, and impediments to exit, wages can stagnate or fall when set competitively, and local rates of unemployment can potentially rise. This is a particularly important concern in economic downturns, as the speed of recovery often differs spatially and across sectors. A more geographically flexible labor force can potentially quicken the pace of recovery in these situations and reduce damaging spells of unemployment.

Many additional benefits of labor migration are described in the international literature. Migrantsending countries tend to have lower domestic unemployment, greater poverty reduction, and higher disposable income than otherwise comparable countries. Better matching between the location of workers and employment opportunities lessens the strain on government services provided to people without work and leads to higher wages and economic growth through increased productivity. Because poorer and more rural areas usually send a disproportionate share of migrant workers, policies that facilitate the flow of people also disproportionately improve livelihoods of economically vulnerable people. Long-term economic transformation is supported by high rates of migration through faster rates of technology transfer, deeper international trade networks, and higher rates of investment. In contrast, there are no documented cases of transition economies reaching upper-income levels by limiting emigration. Table 1 summarizes some of the relevant literature on these points.

**Table 1: A Selection of Relevant Studies**

|Beine et al. (2013)|A positive correlation between emigration to rich countries and the<br>increase in the stock of human capital|
|---|---|
|Borjas (2003)|Positive wage effects for migrants, potential negative effects for<br>host-countryworkers with similar skills.|
|Bouton, et al. (2011)|Emigration has a positive and significant impact on domestic<br>(sendingcountry)wages|
|Cantore and Calì (2015)|Migration (whether permanent or temporary) is beneficial for<br>income as well as for poverty reduction in the home countries as it<br>raises remittances, labor productivity, trade, and foreign direct<br>investment and it provides incentives for human capital<br>accumulation. These channels offset the negative impact of “brain<br>drain.”|
|Clemens (2013)|(a) Migrants transfer money, skills, technology, and ideas (b)<br>Restricting exit has not been shown to yield intended benefits (c)<br>migration helps to alleviate unemployment/underemployment<br>issues.|
|Dustmann, et. al. (2012)|Emigration from Poland was largest for workers with intermediate<br>skill levels, and that it is domestic wages for this skill group that<br>increased most. Emigration led to a slight overall increase in wages|
|Hanson (2009)|Overview of economic consequences of migration. Among many<br>points considered: (i)Having migrants abroad provides insurance to<br>households, helping them smooth consumption in response to<br>income shocks, be they domestic or foreign. (ii) some evidence that|

3