Cultural Communities in a Global Labor Market: Immigration Restrictions as Residential Segregation

When economists speak of a globalizing world, they have in mind first and foremost the dramatic moves we have made toward a global common market; that is, our evolution toward a world economy integrated across national boundaries. Our progress in this direction has been especially dramatic in the liberalization of international trade in goods. Since multilateral trade negotiations produced the General Agreement on Tariffs and Trade ("GATT")l in 1947, subsequent rounds of negotiations have steadily reduced trade barriers among states. Economists generally welcome this development, prescribing free trade as the regime that maximizes global economic welfare. Economists also recommend liberalized trade as a policy that is likely to produce gains for each national economy. Gains from trade arise because different countries will produce goods at different costs. When countries restrict trade, the price of a good will be low in countries that can produce it at low cost but high in countries that can only produce it at high cost. Liberalized trade allows both countries to gain. The high-price country can gain by importing the good at a lower price than it would cost to produce it at home, while the low-price country can gain by exporting the good at a higher price than it would fetch at home. Economists also recognize that the same theory that applies to goods also applies to international trade in other markets. Na-