Senior fellow Arvind Subramanian co-wrote an op-ed with Aaditya Mattoo about immigration for Foreign Policy.
Immigration reform is back on the policy agenda. Can it help get the United States out of the economic pickle in which it finds itself these days? The global financial crises reinforced the long-term trend of stagnating incomes, shrinking wealth, and diminishing opportunities for the U.S. middle class. Both ends of the age spectrum have been hit: Today, only 45 percent of those between the ages of 16 and 24 are employed, while an increasing number of baby boomers are retiring with reduced savings and pensions. Meanwhile automatic budget cuts and future fiscal tightening will overwhelmingly affect the infirm, retirees, and students. High long-term growth, obviously, is one solution. But that's easier said than done. There's a more straightforward way to revive the U.S. economy and put money in people's pockets. To borrow from the 19th century U.S. politician Horace Greeley: Go South, Americans!
Already, Americans are spending more time in the economically dynamic developing world. Patients are traveling to Thailand for treatment. Retirees are enjoying the low costs of living in Latin America, while students are enrolling in medical schools in the Caribbean.
These trends should be embraced and enhanced. This new form of globalization will boost the purchasing power of U.S. consumers by providing greater and cheaper access to key services -- such as health and education -- whose costs will likely grow in the future. Additionally, if U.S. emigrants and medical or education tourists seek opportunities overseas, other countries could help convince the United States to relax its barriers to foreign entrepreneurs, scientists, doctors, and engineers. Greater skilled immigration would boost domestic innovation and growth.