SINGAPORE – Few issues are as contentious as immigration policies in the world’s wealthiest nations. Economic research is increasingly coming down on the side of net gains of immigration for the countries of origin and destination of migrants, clearly pointing to the world being better off with flows of people across national borders.
But one huge qualification to this gets overlooked — migration is increasingly being driven by man-made calamities of environmental destruction, overpopulation and joblessness in many countries of origin. If government policies neglect these issues, it will be impossible to optimize the benefits of migration. So, while favoring migration on grounds of overall well-being, there is a pressing need to address these issues.
Some 250 million people, or 3 percent of the global population, are migrants, of which 20 million are refugees fleeing conflicts and persecution, escaping poverty and, increasingly, the ravages of natural disasters. The United States, Russia, Germany, Saudi Arabia, the United Kingdom and India are in the top 10 destinations. Migration helps to lower unemployment rates at home and raises remittances, which are vital economic pillars in many economies, including Bangladesh, Nepal and the Philippines. In 2015, remittances of overseas workers to developing countries was nearly $450 billion, three times official development assistance going to the developing world.
World Bank research is clear on how migration helps economic outcomes. Increasing immigration by 3 percent to swell the workforce of developed countries, by one estimate, would generate global gains of over $350 billion, and provide relief for a globally aging population. Japan has achieved the highest life expectancy among the major economies. But experts predict rapidly rising dependency ratios in many countries, and a decline in the developed country workforce from about 800 million to close to 600 million by 2050.
For aging societies, such as Japan and in the European Union, the influx of young workers can ease strained pension systems and the burden of caring for the elderly, though immigration comes with costs that need to be managed.
In destination countries, immigration increases labor and skills supply, innovation and entrepreneurship. For developed countries, studies show that immigration improves public finances and boosts income per worker. In the U.S., over a third of documented immigrants are skilled, reflecting the needs of the economy, and it was immigrants who founded Google, Intel, PayPal, eBay and Yahoo. In this year of another Nobel Prize win for Japan, six American winners in economics and sciences are immigrants.
Yet, global gains from migration will lose their luster unless many of the factors that propel people to leave their countries for better opportunities abroad are addressed. This is certainly the case for South Asian economies, where there is a pressing need for governments to ramp up investments in education and growth policies affecting job creation and population growth. Even as labor inflows help countries with labor shortages, there are optimal levels of population sizes in these nations too, as negative externalities of congestion and other spillovers set in beyond a certain point.
Furthermore, when natural disasters cause migration, as they are increasingly doing in the Asia-Pacific region, the vulnerability to climate-related disasters needs to be comprehensively addressed than is currently the case. After all, many of these countries have large populations of poor living in harm’s way. Although migration can rather perversely be seen as a form of climate adaptation, adaptation alone will not help unless there is also climate mitigation.
In particular, the large nations responsible for the bulk of greenhouse gas emissions must decisively switch to a low-carbon growth path, as exemplified in the recent global deal to limit hydrofluorocarbons. It is also encouraging that last December’s Paris climate change agreement has come into effect now that countries representing more than 55 percent of global emissions ratified the deal. Significantly, these include China, the EU, India and the U.S. But Japan, Australia, Indonesia, Russia and the Philippines have yet to ratify their national contributions to the deal.
On balance, then, migration brings net benefits to countries of origin and destination and helps to improve global welfare. But for political acceptability, policies are needed to support the segments of the labor force that lose out in the process. And when it comes to migration that responds to population pressures, poverty and environmental destruction, the top priority needs to be policies in the countries of origin to improve education and to slow population growth — and actions everywhere to switch forcefully to a low-carbon growth path.
Vinod Thomas is a visiting professor at the Lee Kuan Yew School of Public Policy, National University of Singapore; a special adviser to the president at the Asian Institute of Management, Manila; a former senior vice president, independent evaluation, at the World Bank and director-general, independent evaluation, at the Asian Development Bank. His email address is Vndthomas49@gmail.com .
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