Published on People Move

How does migration shape economic and social development?

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Migration has a profound impact on the lives of the migrant households, but also their societies are shaped by the cumulative effects of labor mobility and consequently remittances. Literature provides interesting insights into the true development impact of migration. Dilip was asked to provide a background document assessing the state of the current knowledge for a roundtable discussion at the Civil Society Days of the Global Forum of Migration and Development 2010 held in November in Puerto Vallarta, Mexico. This resulting paper (co-authored with me and Sanket) has since then been revised and recently published as a World Bank working paper.

In the paper we have reviewed a variety of studies representing different aspects of migration in order to distill key messages and new insights. Main observations arising from the survey are:

For a sending country, migration and the resulting remittances lead to increased incomes and poverty reduction, improve health and educational outcomes, and promote productivity and access to finance. Although individual variation exists, the economic impact is primarily and substantially positive. Yet, these gains come at a substantial social cost to the migrants and their families as migration may lead to eroded family structures, children losing parental care, and weaker safety nets. 

Even though the bulk of the scholarly evidence of the development impacts on the receiving country is from developed countries, the developing countries are to a growing extent emerging as important migrant destinations as exemplified by large migration flows in South to neighboring countries and regional hubs, such as South Africa and Russia. While economic migrants are generally good for the receiving economy in terms of increased production and productivity, the developing destination countries too face challenges in integrating the immigrants and combating xenophobia, job competition between migrant and native workers, as well as fiscal costs associated with provision of social services to the migrants. 

Migration can also have an impact on larger social phenomenon, such as democratic institutions, environmental degradation and gender norms, either through the transmission of values and knowledge or through the resources provided by remittances. On the other hand, there is less evidence on the claimed connection between migration and criminality as commonly claimed by anti-immigration advocates in the destination countries.

In order to harness the economic and social potential of migration while mitigating its negative effects migration should be incorporated into the development policies both in the sending and the receiving countries. Improved data collection and capacity building is needed to ensure the governments’ ability to plan and implement strategies to facilitate labor mobility, while simultaneously protecting the rights of the migrants. In conclusion, migration and remittances (collective or individual) can be a valuable complement to broad-based development efforts, but they should not be regarded as substitute to official development aid. Hopefully this paper will serve as a useful reference to the rich literature available, and entice the reader’s appetite to explore the different themes in more detail.


Elina Scheja

Economist, Migration and Remittances Team, Development Prospects Group, World Bank

Sanket Mohapatra

Associate Professor, IIM Ahmedabad

Dilip Ratha

Lead Economist and Economic Adviser to the Vice President of Operations, Multilateral Investment Guarantee Agency, World Bank

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