John Kennan on the cost of restricting immigration

John Kennan, Juli Plant Grainger Distinguished Chair in Economics at the University of Wisconsin at Madison, discusses his early years in Dublin, Ireland, his academic background, and his research on the economic effects and political challenges of migration, especially the impact of open borders on existing workers’ wages. 

In this episode, Kennan and Ashenfelter discuss:

• Kennan’s background growing up in Dublin, Ireland, and his educational journey from the University College Dublin to Northwestern University. “Going to the U.S. seemed more interesting…At this point, I was 21, had just gotten married. And so, it was a jump in the dark...” 
• His dissertation work at Northwestern: “[My dissertation] was about dynamic factor demand…I was doing demand for labor and capital from the point of view of a forward-looking firm that's uncertain about what the factor prices are going to be in the future and how to decide on how much labor to hire and how much capital to hire, given that it would be costly to change your mind after the fact.”
• Kennan’s postgraduate academic peregrinations, from Brown University, to the University of Iowa, and finally to the University of Wisconsin at Madison. 
• His long-term studies of migration economics. ”... people have much lower productivity if they're working in Syria or Haiti or Zimbabwe or someplace and you take that same person and put them in Germany or France or the U.S. or Canada, and they're just a whole lot more productive in that environment.” 
• His research on the economic impact of open borders. “...I think the big lesson was once you start trying to put numbers on the gains from allowing people to move, [the gains] are just enormous, or to put it another way, the costs of immigration restrictions are extremely high.” 
• His research on the impact of migration on existing workers’ wages. “The effects that I was getting are actually quite small. What's happening is the effect on wages is brought about by increasing the effect of supply of labor. So, you're bringing in people… but also these people are more productive in the new location. You've augmented the supply of labor.” 

John Kennan earned his Ph.D. from Northwestern University in 1973. He is the Juli Plant Grainger Distinguished Chair in Economics at the University of Wisconsin at Madison. He is well known for his use of economic theory to organize empirical studies in important topics in labor economics, such as wage determination, cyclical employment and wage fluctuations, and migration."The Work Goes On"—a podcast produced by Princeton's Industrial Relations Section (IR Section)—is an oral history of industrial relations and labor economics hosted by Princeton's Orley Ashenfelter.