International migration is the absentee in the current wave of globalisation, particularly in Europe. Helped by falling communication and transportation costs and by the reduction in policy barriers to commodity and capital flows, trade flows and foreign direct investment (FDI) have increased in the last 20 years at a faster rate than world production. Migration flows, on the other hand, have shown little change during the same period when one excludes the temporary surge following the collapse of the socialist regimes in Eastern Europe. This contrasts sharply with previous integration episodes: in the nineteenth and early parts of this century, but also in the 1960s, international labour mobility played a central role in fostering economic integration.

The changing stance towards migration policies goes a long way in explaining these trends. At the turn of the century, the attitude toward immigration used to be quite liberal. Similarly, in the 1960s governments in receiving countries often took an active role in encouraging migration. Nowadays, the policy imperative has become to limit or even to stop any further immigration. In part, this new attitude reflects the fears that immigration may worsen the domestic income distribution by widening the skilled-unskilled wage gap and aggravate unemployment. There is little evidence, however, that these concerns are well founded. Nonetheless, recent popular thinking in receiving countries has it that migration is excessive and therefore detrimental to the welfare of natives, and that this somehow provides a reason for highly restrictive policies. Clearly, the negative stance toward immigration reflects more than simple economic concerns.