Can Differences in Immigration Policy Lead to a Comparitive Advantage?
Friday July 6, 2007
It appears that they can, as Microsoft is choosing to locate a software development centre in Canada rather than the United States. The Wall Street Journal article is here. The blog The Intangible Economist gives this quote:
h/t: The Intangible Economist.
Microsoft Corp. plans to open a software development center in Canada this fall to attract talent and avoid U.S. immigration issues.I've often heard that Canada's government supplied health insurance system provides a cost advantage to firms over the American de facto business supplied health insurance system. But this is the first I've ever heard that type of logic applied to differences in immigration policies.
The Vancouver, British Columbia location will be one of only a handful development centers outside the company's headquarters in Redmond, Wash., the software company said Thursday. It previously announced plans to build sites in Boston and Bellevue, Wash.
Microsoft said the Vancouver location will "allow the company to continue to recruit and retain highly skilled people affected by the immigration issues in the U.S."
h/t: The Intangible Economist.
Comments
This is an interesting point, but it’s not anything new. Remember the debate over NAFTA in the early 1990’s? The fear among many labor unions was that a repeal of trade restrictions would allow, in not so many words, Mexico’s comparative advantage in unskilled labor to be realized more fully by providers of FDI. Still, this article is the flip side of that argument; much of Mexico’s comparative labor advantage stems from restrictive U.S. immigration policies. And in both instances, NAFTA removed the barriers that prevented the comparative advantage from being realized.