What to do about international migration
By: Lykke E. Andersen
Inequality is becoming an increasingly concerning issue and recently 176 countries agreed that one of the Sustainable Development Goals for the next 15 years should be to “reduce inequality within and among countries.” One of the specific targets associated with this goal is to “facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies.”
This makes a lot of sense, since increased migration is probably the single most effective way to reduce poverty and inequality globally. Clemens (2011) argues that the tightly binding restrictions on migration across national borders constitute the biggest class of distortions in the global economy. He estimates that the global efficiency gains from freer migration would amount to a substantial part of world GDP, i.e. tens of trillions of dollars per year. The main reason for these huge potential efficiency gains from migration is that labor productivity is more about where you are than about who you are. It thus makes sense to let people move to places where they can be more productive, to the benefit of themselves and the local economy, instead of keeping them trapped in places where they can hardly even feed themselves.
Migration pressures are inevitably building up across the world, mainly for the following three reasons:
- Large differences in incomes between rich and poor countries. In the richest countries in the world, the average inhabitant earns more than 100 times more than the average inhabitant in the poorest countries.
- Differences in population dynamics. Having completed the demographic transition, most rich countries, and many upper-middle income countries, will face significant labor shortages within a decade or two, while other countries are still in the early phases of the demographic transition and generate substantial labor surpluses.
- Globalization of information. With the spread of education, TV and mobile phones with Internet access in even the poorest and most remote regions of the world, it is no longer possible to keep people ignorant of these differences.
Faced with the increasing pressure of migrants from poor countries, many people in rich countries are getting worried, and their gut instinct is to build walls and close borders to avoid it.
This is a counterproductive policy, though, for several reasons. First, a closed economy generally will not grow as fast as a more open economy. Second, it hurts your own affluent population’s welfare if they don’t have access to housecleaning services, cheap haircuts, punctual plumbers, and a nice variety of ethnic cuisine. Third, and perhaps more importantly, if these global pressures are not gradually alleviated through sensible migration policies, the situation can become explosive and very dangerous.
I see only one possible solution to this unsustainable situation. Fortunately this solution has already been tried and has proven to be a win-win strategy. It is the guest-worker strategy applied extensively by some very rich countries, such as the United Arab Emirates (UEA), Qatar and Kuwait. In the UEA, for example, the guest workers outnumber the native population by almost 7 to 1, but the guest workers are not considered full citizens, and they are only there to provide cheap labor for the natives. Their presence helps the native population, as the latter don’t have to do any hard, dirty or dangerous work, and the guest workers don’t mind, because they get a chance to earn a lot of money and return to their own countries with substantial savings, to improve the prospects for their families.
While many people in rich countries would consider this policy of second-class immigrants cynical and cold-hearted, it is really the most humane solution in the short to medium run (in the long run national borders will hopefully be gone). Immigrants would be welcomed for what they really want in the first place: to work hard, earn decent money, save, and improve the lives of their children. They would not get a chance to become parasites on the social welfare system, which is what is what is usually feared by the native population, but which is rarely the intention or goal in life for the immigrants. It is clearly a whole lot better for everybody than tightly closed borders.
While it currently looks like an uphill battle to promote freer migration, it is probably one of the most important things we can do to reduce poverty, inequality, ignorance, racism and other bad things in the world.
It is a promising sign that well-managed migration is now one of the explicit targets of the Sustainable Development Goals. And history has shown that attitudes towards labor mobility can change. Today, slavery is illegal everywhere in the world, but a century or two ago, it was considered completely natural to severely restrict the mobility of slaves and serfs. As recently as the 1980s, a Polish national attempting to migrate to West Germany could be shot by soldiers at the border, while today Polish jobseekers may move freely throughout Germany.
For more information on this important topic, I invite you to read my recent policy brief titled “Poverty, Equality and Migration” commissioned by the Poverty, Equality and Growth Network (PEGNet):
Clemens, M. A. (2011). Economics and Migration: Trillion dollar bills on the sidewalk? Journal of Economic Perspectives, 25(3): 83-106.