Migration Challenges in an Integrating World

Ms. Sandra Polaski, Robert Lucas, Bruno Losch October 14, 2008 Washington, D.C.
Summary
As globalization spread dramatically over the last twenty years, migration expanded less rapidly than either trade or foreign investment. Still, migration remains contentious even as some economists praise it as the fastest route to raising world incomes. The promise of migration, however, is more limited and nuanced.
 

As globalization spread dramatically over the last twenty years, migration expanded less rapidly than either trade or foreign investment. Still, migration remains contentious, often being blamed for income stagnation, even as some economists praise it as the fastest route to raising world incomes. University of Boston Professor Robert E. B. Lucas discusses his recent Carnegie Paper which finds that the reality is more limited and nuanced.

The event was moderated by Sandra Polaski, Senior Associate and Director of the Trade, Equity, and Development Program at Carnegie.

Recent Migration Trends
Lucas observed that those concerned about migration’s effects on the U.S. economy often possess misconceptions about the status of current migration flows. Less than 17% of migrants into high-income countries are from low-income countries. Instead, most migrants out of developing countries move to other neighboring low-income nations. Those that do immigrate to industrialized nations are not predominately low-skilled, poor workers; 45% of these migrants have a college-level education. 

Low-Skilled, Temporary Migration Best
Lucas stressed that migration of high-skilled workers does not significantly reduce poverty.  Instead, temporary migration of low-skill workers more effectively raises the living standards of both the migrants and their communities. Temporary migrants send greater levels of remittances back home because they expect to return themselves one day. These returning workers are also more productive when working back in their home countries, as they have gained skills from their experience abroad. Low-skill workers who remain at home benefit as well from the higher wages and/or increased employment caused by a diminished low-skill labor supply within their country.

To encourage migrants to one day return home, Lucas recommended that host countries permit returned immigrants to receive the pension to which they contributed while working in the host country. He also suggested that host countries grant multiple-entry visas to reduce immigrants' fear of not being able to return to the host country for a future job if they go home. Finally, he noted the dilemma surrounding migrants’ rights to bring family members with them when they immigrate. If granted, these rights may reduce incentives for migrants to return home. However, not granting these rights generates social strain both in the home and host country. Lucas stressed that the first step in addressing these dilemmas and potential solutions would be the formation of a more cohesive development strategy within developed-country migration policy.

Migration a Blunt Development Tool
Although low-skilled, temporary migration can raise living standards, Lucas did not see this or any form of migration as the key to economic development.  Rather, migration is a critical safety valve used when developing countries fail to create jobs or maintain security.  In fact, viewing migration as a substitute for a coherent development program at home can be dangerous for developing countries if they lose focus on job creation and poverty relief in their own nation.

Constraints on Migration
Bruno Losch, of the World Bank Sustainable Development Department of the Africa Vice-Presidency, offered comments.  While agreeing with most of Lucas’ observations, Losch expressed some disagreement over what motivates people to leave – or not to leave – their countries.  While Lucas stressed people’s general preference for staying at home as one of the greatest forces limiting migration, Losch instead cited developed countries’ immigration policies.  He noted that economic disparities between potential home and host countries were so great that, if policy barriers were removed, migration would increase dramatically.  Lucas did not dispute that, but noted the methodological difficulties involved in estimating the impact of migration regulations.

Losch also highlighted the migratory pressures generated by the traditional progression of development from agricultural to industrial-focused economies.  Lucas, however, noted that this explanation was more pertinent to internal, rather than international, migration.

Questions & Answers
Sandra Polaski asked if developing regions like sub-Saharan Africa contained enough economic diversity to provide economic opportunities to those who participated in south-south migration.  Lucas agreed that there likely was not enough diversity, nor enough economic growth within sub-Saharan Africa, for migration to serve as an effective development tool.  However, Losch noted the role that greater African integration could play in enabling African nations to achieve economies of scale and to compete with industries in developed countries.

In responding to questions about the impact of including migration regulations within trade agreements, Lucas stressed that it would be difficult to address trade of services without addressing international labor flows.   However, he noted that few trade agreements so far have given proper attention to migration issues.

Source carnegieendowment.org/2008/10/14/migration-challenges-in-integrating-world/1t9k
 

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