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Three Funerals and a Wedding: Resetting the way we work on migration

Manjula Luthria's picture
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International labor markets are perhaps the last bastion of protectionism. We know that easing restrictions on the movement of people, especially the less skilled, can unleash huge welfare gains which by some estimates dwarf the gains from complete trade liberalization. And yet, progress on this front has been too slow.

Three Funerals and a Wedding: Resetting the way we work on migration In attending the numerous conferences and events on this topic I’ve come away frustrated by how we haven’t been able to move the discussion forward in effective ways and struck by the consistency of certain ways of thinking  that just keep pulling us back. 

To be able to really move forward we need to put our intellectual and convening powers towards facilitating the death of three long held views and then become matchmakers in facilitating a wedding ceremony. 

The three funerals we need


The first idea that has fossilized these discussions is that development must only be about places. Hence the questions being asked in the research and policy making world essentially come down to one question: what has the migration of people done for the development of the places they come from? Whereas if development were already phrased in human development terms then all that matters is that migration offers an expansion of employment opportunities, an expansion of choice and agency, an increase in income, and often diversification of household risk. If this isn’t development, then what is?

The second unfortunate idea that has crept into our vocabulary and enjoys a unique brand name that even Coca Cola would envy is that of “brain drain” - which conjures images of loss of human capital from poor towards rich countries. The counter factual as many labor origin countries will readily testify to – is “brain down the drain!” When human capital cannot find a suitable use, it moves to another location where it does, providing an economist’s dream come true of good resource allocation.

In fact, the very prospect of radically increasing earning potential through migration can boost enrollment in certain fields of education which are internationally marketable, hence actually increasing the supply of brains. And yet, the predominant footprint this term “brain drain” has left on policy making is to give rise to paternalistic thinking that some countries “need” their emigrants more, so they should either be sent home or their recruitment should be discouraged in the first place.

These lead to the third idea that has done us more harm than good – the innocent looking AND that is found between migration AND development. This implicit assumption behind the use of this conjunction is that the words on either side are not to be treated as synonyms and hence must be linked to each other through some other channel.

This has given rise to a cottage industry that proposed  these channels were either remittances or return, i.e. if migrants remitted money back home, then development was visible, or if migrants returned home armed with skills and knowledge then they had contributed to development. 

Of course, both these flows can have positive effects, but chasing them as the missing link between migration and development has set us up big time!  Measuring the development friendliness of migration through remittances is treating an intra-household transfer as development if it crosses an international border (if families were separated) but not so anymore if this occurs at the breakfast table (if families were not separated). 

The other channel of return is also a dead end and many well-meaning efforts have tried to incentivize return and convert  returning migrants into entrepreneurs. However, if the push and pull factors that drive migration haven’t been altered, then this is at best a marginal issue.

And now a wedding
 

What if we redefine our starting point to be something like this: Migration is development.

The relevant policy questions then focus on  what can sending and receiving countries do together that puts migrants at the center of this discussion in a way that helps realize the human development potential of mobility.

This would mean we move away from worrying about remittances and return, and instead focus on policies and institutions that can help create better systems for migration – from recruitment, job search and matching, worker protection, portability of social rights and skills, training standards and certification, and ultimately successful insertion and integration of migrants into international labor markets in order to achieve the best possible human and economic outcomes.

Building these systems requires immense coordination between host and origin countries and such coordination is now virtually absent because migration policy is made so often through the eyes of national security.  We could jumpstart this coordination by forging dialogue and partnerships at three levels: 

The foremost priority is expanding mobility options for the poor and relatively unskilled and this will require that confidence is restored in bilateral labor arrangements. To do so, we will need to lead with policy experimentation in the design and implementation of such schemes  -  often in the nature of temporary mobility of persons (TMPs) which offer circumscribed access to labor markets in selected sectors and for a specific duration such as for seasonal work in agriculture. Such schemes offer a palatable compromise to all parties and have provided employment to vast numbers of poor people from the Caribbean and Pacific islands. But such schemes are too few because they are difficult to design, coordinate and manage. Here the Bank can take the lead in creating the public goods that are needed to foster trust and manage such schemes well, as we did in the Pacific region some time ago. This is crucial if the poor are to ever have a chance to access global employment opportunities.

For the mid-skilled, we need to create systems that allow their skills to travel with them and prevent the devaluation of skills with mobility – this will mean attention to the standards of the global labor market in tandem with better coordination between policies and private sector needs.  

For the high-skilled for whom mobility is easier but who are at the root of concerns about the impact of migration on the provision of vital services – such as in health care --  we need to offer innovative co-financing mechanisms where future beneficiaries invest in the education and training systems in poor countries in a way that augments the global supply of scarce skills .

Such enlightened partnerships will help turn zero-sum thinking on its head and help broker a regime that unlocks opportunities for human development in significant ways.

In my view this reset is already long overdue. Changing our approach to migration now will allow the Bank to be effective in an area where our intellectual leadership and convening power are urgently needed. We have made a start through our international labor mobility (ILM) program in the Middle East and North Africa region – please visit our website to see what we’re working on. We will also engage more deeply on the issues flagged here through a series of blog posts to follow - so please stay tuned and share your thoughts with us.  

Comments

Submitted by Lant Pritchett on
Brilliant stuff. The work on remittances was a great "thin end of the wedge" to get the WB involved in migration but I agree it is time to move beyond considering migration only from the point of view of how much it benefits the place the migrant left. Measured by its impact on people migration is far, far, far and away the single biggest development intervention available. It is limited by rich country politics. Unfortunately in WB parlance those countries are called "shareholders."

Submitted by Lant Pritchett on
There is lots of talk about the WB taking a larger role in "global public goods" but little concrete examples of what those might be. Migration is a huge unfilled space in the international system--trade has the WTO, money and finance has the IMF, health has the WHO (and others). But there is no organization out there that has the view of "migration and development" and create ways to both promote more migration because of its positive impacts and protect those who move. This is because most international organizations are exactly that--"national"--their members and controlling bodies are nation-states. This makes migration issues difficult because the inter-national migrant by definition moves across two nation-states and hence their interests is fully represented by neither. But the gains from movement are so huge that creativity is capturing some of the gains can create massive possibilities for "win-win-win"

Submitted by Manjula on
Thanks Lant! You’ve articulated a compelling case for our engagement here. Thankfully, in the recent past in working with migrant receiving countries on this issue I have found that they have actually been quite welcoming of our engagement. First of all the reality that domestic measures alone will not solve the labour shortages seems to have sunk in more or less, though the current economic times may have pushed this to a backburner temporarily. The question I encounter when I sit down across a Part 1 country representative and discuss immigration is not why more labour mobility, but instead HOW will we make it work? Whether low, mid, high skilled movements – when viewed from the eyes of receiving countries they look something like this: yes we need low skilled workers but how will we know who is really coming? And if we set up a guest worker scheme won’t they all end up overstaying anyway? On mid skills their concerns are that they allowed people with mid skills to enter but now they only drive taxis or are unemployed – so what went wrong? And finally on high skilled movements too, Part 1 countries have concerns – some from their own internal constituencies (professional associations) and others from international actors who frown upon such movements. So when we approached these Part 1 country concerns with a genuine curiosity to understand these concerns fully we were able to get cracking on finding a constructive solution to it – sometimes it was an information gap which was easy to fill, sometimes a coordination gap so we use our convening power and sometimes a straight technical or capacity gap so we built it up – just as we do in so many other areas that the Bank works on. This was nuts and bolts work, and like you said – no other institution is filling these gaps so we just have to! So the bottom-line is that instead of viewing it as “taking on” Part 1 countries when we approach it as “taking up” some of their legitimate concerns we can be really helpful in unlocking these closed markets.

Submitted by Lant Pritchett on
The migration issue with rich country shareholders (or other migrant destinations like the Gulf) is tricky because it is so hotly political, but the long run forces are going to mean that Europe especially is going to need more migrants--the changes in the labor force are just too dramatic to be accommodated without it. Manjula's work in New Zealand shows that without necessarily getting into all of the politics of migration technically minded global organizations like the WB can be helpful in crafting "win-win-win" type programs. While it is delicate, the IMF can call a spade a spade (if in a polite way) when it comes to US fiscal position or European issues at least in its technical work and the WTO can (at least in principle) stand up to powerful countries. So I think the WB can begin to engage more and more the issues with the Part I countries in a cooperative way rather than just a reactive stance.

Submitted by DK - Senior Citizen of this world on
Excellent piece of work - Worth sending this wisdom to Tony Abbott, new Prime Minister Elect of Australia and to the Policy Makers - the Leaders all around the globe This will help Tony save millions of dollars of tax payer money by re-thinking the politics of shuttling needy poor human capital outside Australia. A vast country like Australia can harness the skills of migrants no matter how unskilled these needy people

Submitted by Pradeep on
Great in spirit - "migration should be like free markets" and everyone will thrive! On the other hand, economics today recognizes "externalities", where the free hand of the market needs to be guided by social policy without becoming 'centralist tyranny' - Anti-trust - markets become monopoly playgrounds - Anti-Dumping to prevent killing domestic production,then raise prices - Capital controls to prevent "princelings" from taking all the gold & jewels of the country to safe harbors like Switzerland,etc. - Equitable and preferred access to capital to prevent well connected industrial houses from getting all the capital. In context of Migration, there are externalities ... * The cost of an IIT education is $250k in western terms - what does India get in return for a "free" migration. On the other hand Taiwan, Israel enforce a 2 year military service for ALL princelings and princesses not just the land-labor-sipahis .. This could be used to get these brains to * No harm in encouraging reverse brain drain, by potraying "economic missions" - hong kong, singapore, ireland, latvia, even the Sonama county of California all have Silicon Valley economic diplomats to encourage company formation. The wheels of economic growth and reverse migration ARE LUBRICATED with making it easy to find information, benefits of locating there and connecting entrpreneurs ... Else what happens - Capital flight or reverse FDI due to sons of corrupt politicians fleeing with the gold .. - Massive subsidizing of capitalist economies .. - Brainwashing of elites of developing countries - so future political leaders whether Nehru, Sonia Gandhi or now the Harvard-China-princelings can be "biased" to Western ideologies .. My point is DONT FEAR open migration, just provide counterbalances i.e. "MARKETING" to allow benefits to filter back... Hopefully developing countries can be CLEVER and SCHEMING about it, just as past colonialists did in past...

Submitted by Fahem on

Very good article that raises several points, both acknowledged and unacknowledged, by many policymakers in various fields.  Here are my views on a number of points raised:

  1. The brain drain.  As you note, instead of viewing the brain drain as a problem that dogs poor countries, the focus should be on better managing brainpower for the good of humankind. We should not limit ourselves to the portrayal of the problem by the media and politicians.  In discussing the “brain drain,” some policymakers overlook the fact that most of these people (departing intellectuals) only became “brain” after the “drain.” The reasoning of some Third World politicians can be distilled as follows: “The West exploits the Third World; to reduce this exploitation, we must stem the brain drain that makes the West even more powerful and deprives us of some of the resources needed for development. 

To address this situation from a practical and moral standpoint, we need to do the following:

• Fund a large-scale program for the flow of skills in the opposite direction—introduce a system of mobility and part-time assignments that allows renowned scientists to travel to poor countries (for one or two months per year) in order to improve the quality of university teaching (instruction, training, etc.)

• Fund programs similar in scope for the mobility of prominent specialists in such areas as health and engineering in order to provide assistance, training, etc.  Adequate funding for these activities (based on sound studies and rigorous monitoring) will facilitate the free movement of scientific expertise, with the attendant benefits in the area of development.

2. The free movement of semi-skilled and unskilled workers.  In this regard, I would like to make two brief points:

• In the context of economic relations, agreements are often proposed (or imposed) to ensure the free movement of goods, with virtually no quantitative or qualitative restrictions. One of the most basic human rights is perhaps the right to be considered a good.   It is difficult for some people to understand why products can move freely while the movement of producers is restricted.

• The standard response to the point above is that the free movement of persons creates security and social and cultural cohesion problems for the receiving countries.  Persons who are used to providing such a response must know that the free movement of goods also creates security and social and cultural cohesion problems for poor countries (unemployment and, as a result, security problems resulting owing to the importation of low-cost agricultural products; cultural cohesion problems linked to the free movement of cultural products, etc.).  In conclusion, free trade is more beneficial and negative effects are more evenly distributed if it is expanded to include the free movement of persons.

3. Why ignore the contribution made by the migration of unskilled labor?   Unskilled labor offers receiving countries a number of advantages:

• It reduces the need for the complete relocation of production and thus saves jobs.

• In general, any kind of relocation increases the environmental damage associated with industrial activity.  Why not impose a higher tax on the industries that relocate so as to circumvent environmental protection rules (what global benefits does free trade offer under such circumstances)?  This taxation can also serve as a kind of incentive to acquiescing to immigration.

Thank you for your time and very thoughtful comments. Your ideas for promoting brain circulation are worth pursuing and indeed some efforts are underway in this direction.

And I agree completely with your views on promoting greater mobility for the unskilled and do hope we succeed in elevating it as a priority for us in the WB.

Your insights on framing immigration as part of locational decisions for firms in developed countries can be useful: either capital owners move to where they can combine it with labor or labor moves to where the capital resides.

Submitted by Edmundo Murrugarra on
Manjula, Excellent piece, well written and straight to the point. I would emphasize a few issues on the overall storyline. 1. "Migration is development" to the extent that the decision to migrate, and the process of migration itself, has implicitly a strong element of freedom and a certain level of security. Difficult economic conditions can lead to migrate under very vulnerable circumstances to end up in a human trafficking chain. As someone else mentioned, this is another market where a number of actors may take advantage of their local power as monopsonists of labor or information monopolists. The design, piloting and implementation of low-skilled migration mechanisms need, more than in other skilled groups, a strong component of basic protection of rights.

Submitted by Edmundo Murrugarra on
2. I like the notion of migration as an expansion of employment opportunities, but the reality is that there are some migrants "more equal than others." Migration seen as a differentiated product in terms of quality, cost, risk and return, explains why the poor migrate closer, to lower skilled activities, to areas where language barriers are not high and in more vulnerable conditions. As a result, the expected return is relatively low, but still high enough to entice the move. Improving the quality of the migration product is a critical element in addressing the challenges for the low skilled.

Submitted by Edmundo Murrugarra on
3. The Bank has a unique opportunity because South-South migration is as important (or even more) as South-North migration. That is, before getting into the dialogue between US and Mexico, or Morocco and Spain, there is an even larger migration dynamics between India and Nepal, Bolivia and Argentina, to name a few. By the time Spain - the second largest migrant recipient country after the U.S. a few years ago - carried a massive regularization program of more than 700,000 migrants in the 2000s, Argentina had already been regularizing migrants from Paraguay, Peru and Bolivia accounting for almost the same number of people. Did we notice it? Had the Bank spend some time learning how they did it? The current dialogue with Ministries of Labor in LAC's growing economies on skills training or occupational certification always includes a comment on the regional labor markets: "We need to ensure our trainees can be recognized abroad". We are in a unusual position to facilitate this dialogue and bring experiences like the one you led in the Pacific Islands.

Submitted by krystal on

I agree completely with your views on promoting greater mobility for the unskilled and do hope we succeed in elevating it as a priority for us in the WB.

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