Open Trade, Closed Borders: Immigration in the Era of Globalization

This article argues that trade and immigration policy cannot be studied as separate policies but that instead scholars must take an integrated view of them. Trade and immigration policy are substitutes. The choice of trade policy affects immigration policy in labor-scarce countries through its effects on firms. Closure to trade increases the average firm-level demand for immigration, leading to immigration openness, and free trade decreases the average firm-level demand, leading to restricted immigration. To test this argument, the author develops a new data set on the immigration policies of nineteen states from the late eighteenth century through the early twenty-first century. This is one of a few data sets on immigration policy and, importantly, covers the nineteenth, twentieth, and twenty-first centuries. The data show that indeed, trade policy has the hypothesized effect on immigration: immigration policy cannot be fully understood without examining trade policy. This article, therefore, suggests that trade and immigration policies, and other foreign economic policies, should be examined in light of each other.