FULL PAPER HERE

Theories of migration, positive and normative, rely to a significant extent on assumptions about the relationship between happiness and material well-being. Positive theories designed to explain how migrants do move usually begin from assumptions about individuals and households making decisions to increase their happiness. Push-pull models of migration describe both those factors which would tend to increase the magnitude of happiness gains from migrating (e.g., better economic opportunities, political freedom, social networks in the receiving country, etc.) and factors constraining the ability of people to access those gains (e.g., distance, immigration laws, etc.).

Neoclassical and human capital models of migration focus on the economic forces that arise from international labor markets allocating labor among areas with different wage levels, but rest on the microfoundations of individuals making decisions in those labor markets to maximize their own happiness. The new economics of labor migration seeks to correct the primacy of wage differentials, and raises the unit of analysis from profit-seeking individuals to risk-sharing families or households, but all in the service of describing migrant choices in terms of people trying to improve their own well-being.1 The common thread that migration decisions are motivated by migrants’ intention to improve their material well-being may appear obvious or even tautological, but it’s useful to make explicit because as we’ll see, the burgeoning field of happiness studies allows us to investigate how well migrants make these decisions, what spillovers are caused by these decisions, and how immigration policies serve to facilitate or mitigate the potential gains to happiness.

The economics of migration has typically investigated the relationships between immigration and traditional economic measures like income or unemployment. But economics and economic indicators have often been criticized for promulgating too narrow a conception of human flourishing. Robert F. Kennedy’s famous speech at the University of Kansas is the most eloquent formulation of the criticism:

The gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.

Economists will be the first to admit that measures of income like gross domestic product and GDP per capita are imperfect indicators of welfare. Over the decades, they have offered alternative ways to investigate human welfare.

One approach has been to devise and use more inclusive and less materialistic indices to supplement the old standard of GDP per capita. For instance, Mahbub ul Haq and Amartya Sen developed the United Nations Human Development Index (HDI), which combines income, life expectancy, and education into a composite index. Charles I. Jones and Peter J. Klenow offer a summary statistic of their own that is even more inclusive than the HDI, combining consumption, leisure, mortality, and inequality. The number of alternative measures has proliferated as dozens of economists have devised and published their own preferred metrics. But all of them show that the criticism of reliance on GDP per capita is misplaced since they all are very strongly correlated with average income.

The correlation between HDI and GDP per capita is .95, indicating a strong relationship. Jones and Klenow found an even stronger correlation of .98 between their own welfare indicator and GDP per capita. Perhaps these alternate measures are philosophically preferable to GDP per capita. But they are so similar to GDP per capita that switching to them wouldn’t seem to change any conclusions. 

Read the full paper here