Question

Why do immigration and international trade function as substitute processes? Why would blocking international trade tend to spur greater pressures for immigration? Fully explain.

Answer 1

Immigration mostly happens for economic reasons. People immigrate to regions with more economic opportunities from regions which have relatively less opportunity and lower expected income. Therefore, one important reason behind immigration is the inequality of income and economic opportunities across countries. International trade helps in the spread of economic opportunities. Free trade spread economic opportunities across the world and reduces the income inequality among countries, which in turn reduces immigration. However, when free trade is blocked, inequality of income rises and more people have an economic incentive to immigrate. So, trade functions as a substitute for immigration in which higher free trade lowers immigration.