Policy Coherence for Development
What are the costs and benefits of migration for developing countries? How can migration flows be better organised to yield greater benefits for all parties concerned—migrant-sending countries, migrant-receiving countries, and the migrants themselves?
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This book seeks to answer these questions, taking stock of what we know about the effects of migration on development, and distilling from that knowledge a set of policy recommendations for sending and receiving countries. It draws on a large number of country and regional case studies co-ordinated by the OECD Development Centre to illustrate the mechanisms that link migration and development: labour-market effects, the brain drain, remittances, diaspora networks and return migration.
Migrant-receiving countries are encouraged to look at their migration policies through a development lens; migrant-sending countries, conversely, should look at their national development policies through a migration lens. Interlinking migration and development policies promises a more effective pursuit of the objectives of both sets of policies. This volume provides the basis for a productive debate surrounding policy innovations maximising the overall benefits of international migration.
Chapter 1: Human Mobility in the New Century
The movement of migrants from developing and transition economies to OECD countries has created concerns about liberalising the provision of services and movements of people. Migration figures must be seen in context in order to inform policy making. Most migration in the OECD takes place between OECD countries themselves, even as mobility among developing countries is considerable. The extent of irregular migration is often exaggerated and today’s migration is overshadowed by 19th century migration to America from Europe. Mobility of the low skilled reduces poverty in the source country more readily than that of the highly skilled; the low skilled come from middle-income countries whereas mobility of the highly skilled affects low-income countries disproportionately. A new OECD database provides the basis for more systematic study of origins and skill levels of migrants in the OECD.
Chapter 2: International Labour Mobility – A View from the Sending Countries
Migrants to OECD countries come from a wide variety of sending countries, with different migration behaviour and varied migration histories. Transition countries, the most important source of migrants for OECD countries in Europe, are characterised by explosive emigration and painful economic adjustments. Emigration from sub-Saharan Africa, meanwhile, continues a long history of mobility within Africa in search of a better livelihood. Generally, low-skilled African migrants go to other African countries and Europe; the highly skilled go to North America, reflecting migration policies in receiving countries. The transition from exporter to importer of migrants demonstrates a country’s economic progress. For example, Poland now has an influx of highly skilled workers from Western countries. Guatemalan migrants in Mexico, in contrast, demonstrate an essentially circular, seasonal pattern of migration, though new patterns are emerging there.
Chapter 3: Economic Effects of Migration on the Home Country – A Simple Life-cycle Model
It is impossible to generalise about the effects of migration on sending countries because the effects of emigration on their economies depend very much on their position within the migration cycle. Most emigration countries will pass through some version of the stages of this cycle. Emigration can affect growth and poverty reduction through three channels: changes in the labour supply, changes in productivity, and through migrants’ remittances. The net benefit (that is, benefits minus costs) of emigration is the sum of these three effects, and the relative importance of each channel varies over the life of the migration cycle. The five stages of the migration cycle are exit, adjustment, consolidation, networking and return. Some stages may be skipped or accelerated and return may coincide with immigration from other countries.
Chapter 4: Departure of Labour: When Does the Home Country Benefit?
Sending countries can benefit from low-skill migration during the exit and adjustment phases by reduced pressure on the domestic labour market, creating employment opportunities and increased wages for other low-skilled workers who remain at home. In general, low-skilled workers remit more than the highly skilled and come from poorer communities where their remittances make a greater contribution to poverty reduction than the remittances of the highly skilled. Benefits from the departure of the highly skilled accrue in the latter stages of the migration cycle. Brain drain entails risks for sending countries but can also encourage higher levels of education at home. Temporary and circular migration – of both low-skilled and highly skilled workers – can benefit migrants and the sending country, often more than permanent migration.
Chapter 5: The Brain Drain and Negative Social Effects – When is the Home Country Hurt?
The available information on the brain drain, its consequences and the professions most affected is insufficient to make sweeping generalisations. The area most affected by high emigration rates of the highly educated population is sub-Saharan Africa. The potential costs can be great: brain drain means loss of skills for the source country, loss of ideas and innovation, loss of the nation’s investment in education and loss of tax revenues, but most importantly, perhaps, the loss of critical services in the health and education sectors. “Brain overflow” in receiving countries can lead to misuse and subsequent downgrading of professional skills of migrants. There are other costs of emigration borne by sending countries: among them social effects which can create regional inequalities, and strains on families and gender roles, children and their schooling, and crime.
Chapter 6: Remittances and the Reduction of Vulnerability
Migrant remittances were estimated at $232 billion in 2005, 72 per cent going to developing countries. Although data are incomplete and not wholly reliable, these sums exceed official development assistance, foreign direct investment and private debt flows. Remittances affect household livelihoods and national economies alike. Evidence suggests that they can reduce the depth of poverty, although they can increase inequality. In practice, the low skilled remit more than their higher-skilled compatriots, although this is also a function of length of stay abroad and whether family accompanies the migrant. Remittances are often used for consumption purposes rather than investment, although such expenditures (e.g. for health care or schooling) should rightly be seen as productive in many settings. Remittances, both formal and informal, are of major benefit to non-migrants as well as migrants’ families, as they can have a multiplier effect on the community.
Chapter 7: Diaspora Networks
Diaspora networks consist of groups of individuals engaged in the economies and societies of both their destination and their source countries. They can be formal or informal in nature. Members of diaspora networks often have a comparative advantage in the provision of many goods and services over the native born in destination countries and their compatriots who have remained back home: diaspora networks, for example, can profitably forge trade and investment links between their home and host countries and can help new migrants adapt and use local services. Generally, the return of diaspora members to their home country – or their enhanced engagement, even if they remain abroad – is recognised as a source of human capital that can benefit a developing country. Hometown associations can contribute to the community by investing in the infrastructure of their community of origin. Co-development initiatives seek to integrate the specialised knowledge of diasporas, virtually or physically, back into the source country.
Chapter 8: Return
Repatriation is more common than many observers recognise. Return can be voluntary, provoked by retirement, changes in migration law, the end of a contract, as a condition of entry or (in the case of many irregular migrants) the result of deportation. Involuntary return is difficult to sustain. More generally, reintegration of returnees in the source country depends on the intentions of the returning migrants, their level of skills and whether these have been maintained or whether new skills have been acquired abroad, and the institutional infrastructure migrants are returning to. Circular migration can benefit both the migrant and the source country, in part by encouraging the circulation of skills.
Chapter 9: Interlinkages between Migration, Trade and Aid
Various policy instruments – migration and development-assistance policies, but also trade polices – are interrelated and the flows to which they give rise – migrants, remittances, aid spending, exports and imports – are likewise interlinked. Looking more closely at these policies, exploiting synergies and avoiding the emergence of “coherence orphans” (i.e. countries that receive aid but do not benefit from any of the other flows) can more effectively achieve global poverty-reduction goals. Trade benefits flow more to middle-income countries where most low-skill migrants originate and aid flows to lower-income countries which suffer most from brain drain. The relationships among these flows present a strong case for more coherent decision making among the corresponding policy communities.
Chapter 10: What Role for OECD Country Migration Policies?
Improving the management of migration requires that sending and receiving countries enter into sustainable partnerships. For this to happen, migrant-receiving countries in the OECD need to look at their migration-related policies through a development lens and consider the consequences for development of migrants’ home countries. The design and implementation of migration policy and of development co-operation must be interlinked better to achieve the aims of both. More coherent policies can help transform a brain drain into brain gain and increase the benefits for sending countries from the mobility of the low-skilled. These policies must exploit the potential of circular migration as well as address the challenges of irregular migration.
Chapter 11: Integrating International Migration into Development Strategies
Migrant-sending countries are encouraged to look at their national development policies through a migration lens. Sending countries must address their regulatory frameworks and ask whether their macroeconomic policies, human resource management, higher education, infrastructure investment and “South-South” regional initiatives facilitate adjustment and the redeployment of their human resources in the face of increased mobility, as well as harnessing migrants’ skills for development. Both migrants and returnees must be consulted in the formulation of co-development policy. Various initiatives exist such as ensuring that the highly trained return, that returnees benefit, that they are gainfully employed and that they participate in the social and economic development of their communities.
Chapter 12: Coherence of Policies for More Effective Management
Greater coherence – between ministries within a country and between countries – among migration policies, development co-operation policies, as well as employment, trade and security policies is required for all parties to gain more from migration. Existing institutional set-ups must be overhauled to increase policy coherence; countries must seek mechanisms to promote communication, negotiation and consensus building among policy communities and their constituencies. As argued in previous chapters, OECD countries must interlink migration and development policies; developing countries, for their part, must mainstream migration and remittances in their national development strategies. Enhanced partnerships between sending and receiving countries may be an effective mechanism for assuring that interlinked and coherent policies are put in place and properly implemented. In addition, migration, employment, trade, investment and development assistance considerations must also be jointly addressed at the national and global levels.
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OECD/DCD: Policy Coherence for Development