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Do the Poor Really Benefit from Labor Migration?

Otaviano Canuto's picture

Strong opinions abound on the issue of migration both in sending and receiving countries. But beyond the political discourse, labor migration is now central to the debate on international development and poverty reduction.  Does the migration of workers have a positive development impact? What the evidence shows is that differences in productivity and wages across the world are so large that worker migration offers huge rewards to those who move into higher-paying locations. The development problem, however, is that migrant working programs in high-income countries tend to benefit skilled workers, while the poor and unskilled are left with virtually no point of entry into international labor markets.

How can this change? How can migrant programs increase access to labor markets by the poor and, therefore, have a larger impact on poverty reduction? This is precisely the question that World Bank Senior Economist Manjula Luthria explores in

The Day After Tomorrow: If You Want To Grow, Learn

Otaviano Canuto's picture

Why is it that some countries are more developed than others? A country is “less developed” not only because it lack inputs (labor and capital) but because it uses them less efficiently. In fact, inputs are estimated to account for less than half of the differences in per capita income across nations. The rest is due to the inability to acquire, adopt and adapt better technologies to raise productivity. As an engine of growth, the potential of technological learning is huge—and largely untapped. Four global trends have begun to unlock that potential, and are bound to continue.

First, the vertical decomposition of production across frontiers allows less-advanced countries to insert themselves in supply chains by initially specializing in

The Day After Tomorrow: Will We Ever Trust the State?

Otaviano Canuto's picture

This is the fourth in a series of blogs where we take a look at the issues and the countries that will be at the forefront of the development agenda, not now, not next year, but over the next 2 to 5 years—thus, “after tomorrow”.1

There is no evidence that the 2008-09 crisis changed citizens’ trust in the state, in either direction. Well before the crisis, that trust was already in long-term decline among advanced countries, and was stuck at a very low level among developing ones. And, while markets may have lost their shine, governments did not pick up the credit.

The Day After Tomorrow: The Final Battle in the War Against Poverty

Otaviano Canuto's picture

This is the third in a series of blogs where we take a look at the issues and the countries that will be at the forefront of the development agenda, not now, not next year, but over the next 2 to 5 years—thus, “after tomorrow”1.

There is now a budding consensus on what reduces poverty: it is

The Day After Tomorrow: Fiscal Quality

Otaviano Canuto's picture

This is the second in a series of blogs where we take a look at the issues and the countries that will be at the forefront of the development agenda, not now, not next year, but over the next 2 to 5 years—as we discuss it in more detail in the recently released book

The Day After Tomorrow: Growth Switchover

Otaviano Canuto's picture

It is becoming common wisdom that developing countries are doing well while the rich world is stuck in long-overdue austerity. Barring another subprime crisis (this time, in public debt), the locomotives of global growth are about to “switch over.” How come? Will this hold?

Factors in Structural Unemployment

Raj Nallari's picture

The labor market has the unenviable task of not only absorbing the additional workers entering the labor force each year (as a result of population growth) but also dealing with the unemployed workers as economies. The Keynesian view of unemployment is due to lack of aggregate demand while the neoclassical view is that when prices and wages adjust unemployment will come down significantly. In more and more developing countries, long-term unemployment (workers unemployed for over six months) is spilling over into structural unemployment, which the ILO in its several publications underscores as the mismatch between the skills of the unemployed and the demand for skills in the labor markets.

This structural unemployment may arise due to automation in the work place (e.g. need for higher and higher computer skills), rigidities in the labor market, such as high costs of training or in the case of US de-industrialization as manufacturing jobs are continuously lost to

More and Better Jobs: Are Fiscal Stimulus Packages Helping?

Raj Nallari's picture

 

Global GDP growth and as well as GDP growth in each of the regions were lower in 2009 compared to 2007. More specifically, specifically, negative growth rates were observed during 2009 in developed countries & European Union, Central and SE Europe & CIS countries and to a lesser extent in LAC, while the growth rates for East Asia, South Asia, Middle East, North Africa and Sub-Saharan Africa were positive in 2009 but lower than in 2007.

 

Reflecting this, all regions experienced higher unemployment rates, with the highest being in the developed economies & EU, Central and SE Europe & CIS and LAC economies, which again all had negative GDP growth rates in 2009. The ILO estimates that the global crisis has led to 34 million more unemployed and the World Bank estimates that about 60 million people may have been pushed into poverty.

From Bubble to Bubble: Government Policy Blunders

Raj Nallari's picture

Greedy speculators in housing and private bankers, financial innovation and failure of risk models, regulators and credit rating agencies were all deservedly blamed for the recent financial crisis. Behind this all is public policy that worsened the problems.

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