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The Economist has a nice Finance and economics piece on this topic, aptly titled "Trickle-down economics." I especially liked the caption under the picture, "The last redoubt of cross-border finance." In a related blog post, it raises a very important point,"...to the extent that migrants are staying on and continuing to send money home, the easiest thing that richer countries could do to aid poorer ones .... is to simply not crack down on immigration."

While migration and remittances can never be a substitute for aid, the plea to tone down tightening of immigration is well-taken. Ask any employer facing falling revenues what immigration controls might do to their ability to reduce costs, and they are likely to say that it would be lot harder to survive - and take a lot longer to adjust - if labor markets are segmented due to immigration controls. It is a lot easier for firms to adjust when they have have more labor market flexibility.