This essay is part of a series of articles, edited by Stewart Patrick, emerging from the Carnegie Working Group on Reimagining Global Economic Governance.
As the first quarter of the twenty-first century draws to a close, sustaining global economic activity in ways that ensure growth and an equitable distribution of its fruits faces three challenges: climate change, the global demographic imbalance, and digital transformations in the world of work. These three factors inevitably will affect employment and hence the possibilities for migration, both domestic and international. To date, global governance arrangements have not yet addressed these three challenges and their combined effects on work and migration.
Three Challenges to Employment and Migration
Climate change
As acknowledged in the 2015 Paris Agreement, a dramatic reduction of greenhouse gas emissions will be needed to reach climate change objectives. Achieving mitigation goals and “net zero” by mid-century will require a massive transformation of the global economy, with significant disruption of employment in many sectors, as some jobs disappear even as new ones are created. The employment structure will be altered in volume and in the nature of the jobs that shape it. As countries attempt to mitigate these issues according to the principle of “common but differentiated responsibilities and respective capabilities, in the light of different national circumstances,” these altered employment structures are liable to have distributional effects, both between developing and developed states and within individual countries. This is because employment is the means to create but also to distribute the income generated by economic activities.
The demographic imbalance
Demographic differences are reflected in the populations and labor forces of the Global North and Global South, which are shrinking and growing, respectively. Factors characteristic of developed and developing countries, as well as their wage differentials, interact with these demographic differences to act as undisputed engines of international labor migration. In developed countries, the abovementioned factors are the gaps between the outputs of educational processes and the demand for labor needed to sustain economic activities. In developing countries, these factors are deficits in decent jobs and excess labor supply. These engines of international labor migration are not about to disappear and indeed may accelerate, as developed countries grow older and developing ones are still at earlier stages of their demographic transitions. They will be mediated only by migration policies at destinations and origins. The future structure of international migration will partly remain unchanged, with continued demand for low-skilled migrant workers to work in sectors such as construction; hotels and restaurants; and agriculture, in greenhouses or picking vegetable or fruit crops.
Italy presents a prime example of this phenomenon. When the COVID-19 pandemic led to many avenues of cross-border travel being closed, the Italian government resorted to regularizing undocumented migrant workers so as to allow them to pick crops in the country’s southern fields. On the issue of highly skilled migration (HSM), meanwhile, demand continues to increase for medical doctors and nurses in developed countries, generating unabated flows from developing ones. In response, a country such as the Philippines has introduced limits on the emigration of healthcare workers to other countries. Education is another sector where flows of migrant educators, and also of students, proceed apace.
Digital transformations
The information and communication technologies (ICT) revolution, especially the rise of digital technologies including artificial intelligence (AI), has brought about deep and wide-ranging transformations in the world of work, with an increasing number of jobs being threatened by automation. The response to the COVID-19 pandemic helped entrench and accelerate this trend in both industrialized and (with a lag) developing countries. An Organisation for Economic Co-operation and Development study reveals that 46 percent of jobs in all thirty-two member states of that organization are highly vulnerable to automation or will experience significant changes in how they are carried out in the next two decades. Similarly, an International Labour Organization (ILO) study of five ASEAN states found that 56 percent of jobs in those labor markets could be automated by 2035. As demand for labor declines as a result of automation, governments will need to explore a range of policy responses, particularly schemes to redistribute income so as to sustain demand for goods and services.
However, another bifurcated challenge has already arisen as a result of the ICT revolution: digital migration, both physical and virtual. Many industrialized countries face shortages of ICT specialists to operate digital platforms and other related technologies, and they have sought to fill this gap by encouraging HSM from developing countries. One result has been a brain drain in source countries and a corresponding brain gain in destination ones. The brain drain in developing nations cannot be simply brushed aside, given the high migration rates in relevant sectors and occupations. According to one study, any HSM emigration rate beyond 20 percent in a given occupation constitutes brain drain.
Virtual migration, by contrast, refers to a worker undertaking economic activity for employers in external labor markets while physically remaining in one’s own country. In other words, it is remote employment, through the internet, across international borders. This may be considered a way of addressing the employment deficits in developing countries, some of which precisely suffer from high unemployment rates among graduates of tertiary education. But virtual migration can also result in skill waste. An ILO survey conducted in 2017 shows that virtual migrant workers performing AI and machine-learning tasks were generally well educated. Some 65 percent of virtual migrant workers in developed countries, and 74 percent in developing countries, had a bachelor’s or postgraduate degree. Yet, these highly educated workers typically perform short, repetitive tasks such as data collection, translation, and transcription. Interestingly, workers from developing countries perform a higher proportion of these tasks compared to those in developed countries. Virtual migration can thus result in skill waste, if not necessarily brain drain, as it deprives the worker’s own country of his or her capacity to upgrade the labor market, inject their knowledge into production and distribution processes, and thereby contribute to development. The rise of virtual migration also raises questions related to the terms and conditions of employment, including the principle of equal payment for work of equal value. Based on the ILO survey findings, one study calculates median hourly earnings for virtual migrants of $1.20 in developing countries, as against $3.30 in developed countries, despite the former having (on average) higher educational levels.
Gaps in Global Economic Governance
These three challenges to the global economy—climate change, demographic imbalance, and the ICT revolution—operate simultaneously. And yet existing governance instruments do not address their consequences for employment and international migration.
The global governance framework for climate change, which encompasses multilateral institutions such as the United Nations Framework Convention on Climate Change (UNFCCC), the Paris Agreement, and the Intergovernmental Panel on Climate Change, rightly concerns itself with the primary objective of limiting the rise in average global temperatures. This mission includes concomitant measures to reduce greenhouse gas emissions, to mitigate their effects, and to adapt to both climate change and the consequences of mitigation. But it does not take up the impact of climate change mitigation and adaptation efforts on the current production and distribution processes, and employment in general, in the world economy.
The clean energy transition and the concomitant reduction in fossil fuel production necessarily will affect future employment structures and demand for workers, both native and foreign. For instance, oil export revenues remain a crucial determinant of demand for migrant labor in oil-exporting countries. This is especially notable in Arab states, which according to ILO estimates hosted 14.3 percent of international migrant workers in 2019. Efforts to reduce greenhouse gas emissions by curtailing oil and gas production presumably will reduce these countries’ demand for migrant labor, with repercussions for their own production and distribution processes; employment levels; and, through the reduction of remittances, for standards of living, poverty, and development in migrant workers’ countries of origin. Article 7 of the UNFCCC commits all parties to the global goal of supporting adaptation, strengthening countries’ resilience and reducing their vulnerability to climate change, including through continuous and enhanced international support. Yet the UNFCCC text does not mention the ramifications of mitigation and adaptation measures for employment and migration, and nor does the text of the Paris Agreement. Global economic governance institutions should incorporate measures to address the implications for employment and migration of remedies to climate change.
Similarly, the relationships between the global population distribution, employment, and international migration are not considered in any instrument of global governance. The Programme of Action (POA) of the 1994 International Conference on Population and Development (ICPD), for example, addresses only the internal distribution of population between rural and urban areas. Employment is mentioned only when the POA calls for increasing people’s access to opportunities, skill development, education, and reproductive health services. The POA’s chapter on international migration, meanwhile, is concerned with curbing the root causes that compel people to migrate, permitting the voluntary return of migrants, and reducing undocumented migration. It is silent on the relationships between population, international migration, and employment.
The 2019 Nairobi Statement on ICPD25 did not add any new text on population and international migration. The link between demographic imbalance and international migration does, however, appear to some extent in a soft-law instrument, the ILO Multilateral Framework on Labour Migration. The framework’s fifth principle calls for considering expanding avenues of regular labor migration, taking into account the “long-term impact of demographic trends, especially ageing and population growth, on the demand for, and supply of, labour.”
The 2018 Global Compact on Safe, Orderly and Regular Migration (GCM)—the most recent instrument of governance of international migration—recognizes only that “societies are undergoing demographic, economic, social and environmental changes.” In its objective 2, it considers that migration only occurs because people are compelled “to leave their country of origin.” The compact’s sole, timid reference to demand for labor as a driver of international migration is its call for countries to collect disaggregated data on labor market needs and on demand for and availability of skills. The contrast between dealing with the drivers of migration at origin and destination countries is glaring. Regarding the former, the GCM focuses on irregular migration and on poverty, food insecurity, and lack of employment as drivers of emigration. It ignores the labor market effects of declining (or small to start with) populations and labor forces, skill shortages, and lags in newer technologies and educational systems, all of which are crucial factors driving labor migration in countries of destination. Migration governance needs to remedy these failures.
Finally, digital technologies and the physical and virtual international migration they engender are not a subject of any governance instrument at the international level. Digital physical migration could in principle be assimilated within the approaches to HSM discussed above. Digital virtual migration is different. To be governed, its various expressions would first need to be analyzed, and the dilemmas it raises identified. The analytical challenge would be to identify the occupations, sectors, and labor markets in which virtual migration is practiced; the educational attainment, skills, wages, incomes, and career progression of this cohort of migrants; other terms and conditions of employment, including working time and interactions with employers; social protections available to migrants; and rates of participation in their own countries’ labor markets. Collecting data on these issues should help inform governance arrangements that do not undermine development objectives in source countries while helping meet labor demand in labor shortage countries. Governance arrangements should also ensure equality of treatment and nondiscrimination between virtual migrants and physical workers in the labor markets in which they are employed.
Ideally, efforts to close gaps in the global governance of migration by addressing the challenges posed by climate change, demographic imbalances, and the ICT revolution should occur simultaneously. For example, the annual UNFCCC Conferences of the Parties should consider expanding their consideration of adaptation measures to the topics of employment and international migration. When it comes to demographic imbalances, the International Migration Review Forum, which next meets in 2026, may be the most promising forum to highlight the demographic and labor force shortages driving demand for migrant labor, balancing the GCM’s emphasis on the supply of labor by countries of origin. This balancing should have a positive effect on how different origin and destination countries treat migration in general and migrants specifically.
At present, virtual migration lacks any sort of regulation, and it therefore will be particularly challenging to close the gaps in its global governance. Given national governments’ current distaste for binding international legal instruments, a more appropriate avenue of approach would be an international soft-law instrument of guiding principles and means of action to address the issues raised by virtual migration. The ILO would be an appropriate institution to first provide advance analysis of the issues and then to negotiate and adopt the soft-law instrument. For the governance of virtual migration to be truly global, this instrument would need to be complemented by domestic texts of migration and labor laws in the relevant countries.
