Harvard economists Dani Rodrik and George Borjas are having an interesting debate about guest worker programs over at Rodrik's blog. Well worth a read. Rodrik is pro-guest worker program, and not merely as a compromise, but as a good in and of themselves. In his paper "Feasible Globalizations" (pdf), he argues that as a development strategy for the third world, robust temporary worker programs would be better than liberalized trade and better than aid (Edited: see update at bottom). Better, in other words, than just about anything on the table now:
Consider for example a temporary work visa scheme that amounts to no more than 3 percent of the rich countries' labor force. Under the scheme, skilled and unskilled workers from poor nations would be allowed employment in the rich countries for 3-5 years, to be replaced by a new wave of inflows upon return to their home countries. A back-of-the-envelope calculation indicates that such a system would easily yield $200 billion annually for the citizens of developing nations, vastly more than the existing estimates of the gains from the current trade agenda. The positive spillovers that the returnees would generate for their home countries—the experience, entrepreneurship, investment, and work ethic they would bring back with them and put to work—would add considerably to these gains. What is equally important, the economic benefits would accrue directly to workers from developing nations. We would not need to wait for trickle-down to do its job.
But wouldn't such a regime harm the incomes of workers in advanced countries? Maybe, but no more than is already happening. Rodrik argues:
