Tuesday 16 May 2023

Tyler's warning for New Zealand

A warning from Tyler Cowen (Bloomberg, republished by BusinessDesk): higher income countries are going to need to attract more migrants. But there's a problem:

If you were thinking of leaving your country, would you rather go to a wealthy country with higher tax rates, or one with lower tax rates? Especially if the country with higher taxes has a long tradition of not welcoming migrants, and you would be less likely to find any expatriates there? Besides which, due to their ageing population, those countries may simply be boring, at least for young people.

The danger is that countries with more restrictionist immigration policies will get locked into low-migration outcomes for the foreseeable future, whether they like it or not. It’s hard to say when this point of no return might be reached – but it is another argument for taking in more migrants today. And accepting more migrants today is an investment in accepting more a generation from now, which is when countries will really need them.  

Risk for New Zealand 

Take the example of Canada or Australia, two countries that have had relatively open immigration policies. Twenty years from now, when wealthy countries may be competing more for new migrants, Canada and Australia will be in an especially strong position to attract the most productive foreigners. 

The risk of being locked out of competition for migrants may be even greater for smaller countries such as Denmark or New Zealand. 


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