title: Why do rich countries prefer free trade over free migration? The role of the modern welfare state.
abstract: "According to traditional trade theory (Heckscher-Ohlin), free trade and free migration are equivalent measures of economic integration leading both to an equalization of factor prices. This prediction is in sharp opposition to the observed preference of rich countries for free trade over free migration. We provide an explanation for this inconsistency: the redistribution policies in the countries. Social welfare in countries with a relatively small number of low-skilled native workers is higher with free trade than with free migration due to redistribution of income towards immigrating workers."
mesh_terms: D003132:Commerce; D003710:Demography; D019049:Developed Countries; D004467:Economics; D004641:Emigration and Immigration; D004651:Employment; D006280:Health Workforce; D007182:Income; D011153:Population; D011157:Population Dynamics; D011640:Public Policy; D012946:Social Welfare; D012959:Socioeconomic Factors; D014171:Transients and Migrants
keywords: Commerce; Demographic Factors; Developed Countries; Economic Development; Economic Factors; Human Resources; Immigrants; Income; Income Distribution; International Migration; Labor Force; Labor Migration; Macroeconomic Factors; Migrants; Migration; Migration Policy; Policy; Population; Population Dynamics; Population Policy; Prices; Social Policy; Social Welfare; Socioeconomic Factors