In many cultures, the term "guest worker" would be an oxymoron. Yet policy makers in both receiving and sending countries seem to like guest worker programs. The hope is that guest workers will fill labor shortage in the receiving countries, and at the end of an employment contract go back home with money and some new skills. There is also a belief that temporary migrants will remit more of their savings back home than migrants who plan to stay on in the destination country (often called the "host country", another oxymoron?).
On May 25th, 2009, the European Council adopted the EU Blue Card directive which was initially agreed upon by the European Union’s interior Ministers under the European Pact on Immigration and Asylum in September 2008.
According to the directive, the Blue Card will attract high skilled workers from a third-country into the EU- member states’ labor market and will have a period of validity between one and four years depending on the contract. The directive rules state that EU Blue Card holders will be treated equally with nationals of the member state issuing the Blue Card in certain areas such as working conditions, education, and a number of provisions in national law regarding social security and pensions. The card will also allow the visa holder to bring in family members with him or her in the EU country where the job is located.
In a recent seminar at the World Bank, Peter Dixon and Maureen Rimmer presented a paper titled "Illegal Immigration: restrict or liberalize?" showing that tighter border security and internal enforcement actually reduce the welfare for U.S. households; raise the wage rate of the undocumented migrants who remain; and generate dead-weight losses in the form of prosecution and prosecution-mitigating activities. More importantly, they explain that restricting the inflow of undocumented immigrants pushes U.S.
I recently revisited the Social Science Research Council's (SSRC) Web Anthology on Remittances and Development, and was pleasantly surprised to find an excellent collection of research articles on this rather fast-growing topic. The articles are presented in a convenient format, organized under some broad themes such as concepts, methods, measures, determinants, uses, and impacts of remittances.
One area where more articles exist and can be added are those on remittance systems (by this I mean retail payment systems) and how they can be leveraged for accessing finance/capital at the household or institutional level. There could also be more articles on regulations - especially on anti-money-laundering/countering financing of terrorism - that affect remittance transactions.
With remittances expected to fall in 2009 as the financial crisis unfolds, the primary mechanism through which origin countries recoup the efficiency increases achieved by skilled migration will dissipate. But is there another mechanism, less direct but with long-term implications, through which migrants can benefit their home country.
The notion of the brain drain from developing to developed countries is not new. What is relatively new in the ’new brain drain’ or ’brain gain’ literature is its positive prognosis regarding the economic implications of labor market liberalization. Yes there is a brain drain and on the whole it is bad for development. But the migration of skilled workers need not be a zero sum game. That is, the gain of the host country need not inevitably translate to the loss of the sending country.
The Miami Herald reported today that the Obama administration has lifted restrictions on family visits and sending of remittances by Cuban immigrants living in the United States (more details from a White House fact sheet). Although there are no official figures on the amount of remittances sent by the 1 million Cuban immigrants in the U.S., according to a State Department background note on Cuba, these flows are estimated to be between $600 million and $1 billion annually. The earlier U.S. policy, in effect since 2004, allowed very small amounts of remittances to immediate family members and trips back home every three years.
Interestingly, the Cuban government still levies a tax of some 20 percent on inward remittances, and a White House spokesman and some senators have called on Cuba to reduce these onerous charges. These charges represent a significant loss of value for the recipients and a barrier to sending remittances through official channels.
This is the first year that the H-1B visa cap has not been reached during the first 5 days of filing applications. The current cap is set at 65,000, with an additional 20,000 for holders of advanced degrees. It seems that the number of petitions for the H-1B visa this year will be far less than last year. The U.S.
The failure of the federal government to reform US immigration policy during the past administration has left immigration policy-making to local municipalities. A recent report by Audrey Singer, et al.
Atlanta Fed Research Economist Federico Mandelman and Andrei Zlate, a PhD candidate in economics at Boston College, have prepared a paper analyzing the role that of migration and remittances during the business cycle. The data they present indicate that when the U.S. economy has outperformed Mexico’s, there were usually more attempted illegal crossings into the United States.