This is the Cato Daily Podcast for Tuesday, October 22nd, 2013.

I'm Caleb Brown.

Where You Live explains a lot about how much you earn.

That from development economist Michael Clemens,

he argues that greater labor mobility, that is immigration,

can mean huge gains for global GDP. He spoke at the Cato Institute in July. I don't mean to alarm you, but I just met you and I know roughly how much money you make.

Almost all of you and not exactly of course but I do have a pretty good idea and the reason I have a pretty good idea is because of a remarkable calculation that was done at the World Bank recently by

Bronco Malonovich, economist Bronco Malonovich. It's in a great book of his called

The Haves and the have-nots.

So what Malonovitch does is assemble for the first time

micro data, individual level data on the real incomes

of people all over the world, most countries on earth, stick them into a single

harmonized database and ask this question.

If he takes some random person from that database and he wants to predict their real income, real income,

adjusted for prices across countries.

How far can he get towards a perfect prediction of that person's real income,

knowing nothing else about them except what country they live in, one fact only.

And the stunning to me... one fact is

is 60 percent.

He can predict 60 percent of the interpersonal variance

in real living standard based only of the most stunning facts about the

economy or the world period. We're talking about something important.

...