Labour mobility as an anti-poverty intervention

It has for long been argued that the biggest remaining distortion in the global economy is that of the massive wage differentials for similar wages across countries. Michael Clemens, Claudio Montenegro and Lant Pritchett use micro data from 43 countries and come up with the following wage ratios.



Controlling for various socio-economic parameters, a worker moving from Nigeria to the US enjoys an 840% increase in wages, while a worker moving from Bolivia to the US experiences a 240% increase. The authors of the study finds that immigration to the US is the most effective anti-poverty tool. They compare the relative importance of various anti-poverty interventions with immigration to the US.



Chris Blattman calls it the biggest known wage discrimination in history and the largest remaining price distortion in the world markets. Is there a case for claiming that labour mobility (within and between nations) is the best anti-poverty strategy?

Update 1
Felix Salmon summarizes the debate here. Lant Pritchett estimates annual gains of about $300 billion — three times the benefit of removing the remaining barriers to trade, and therefore recommends creation of 3 million jobs for guest workers in the US.

Update 2
An interview in which Prof Pritchett makes out his case in favor of labour mobility. He calls it the biggest distortion in the world economy today.