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.
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.
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