As described in Chapters 9, 10, and 11, international production occurs when firms either form contractual relationships across national borders or when they engage in foreign direct investment (FDI), stretching the firm's own boundary across national borders in the latter case. But there is a third means by which international production can take place, namely the movement of people across national borders in the form of temporary or permanent migration. At the time of this writing, this mode of international production involves approximately 200 million migrants, or 3 percent of the world's population. As such, migration is an important component of the world economy.

As we discussed in Chapter 1, the world economy has experienced significant liberalization of trade, FDI, and financial flows. These are the processes that have characterized economic globalization. Not so with labor, however. As barriers to the movements of goods, services, direct investment, and finance transactions have fallen over time, barriers to the movement of people have largely remained in place or even increased. This has caused some international economists (e.g., Pritchett, 2006) to refer to “everything but labor” globalization. That said, some specific types of labor flows have increased over time, and it is very much worthwhile to examine these in some detail.