Can increased labor mobility unlock the potential of remittances?

This page in:

In the most recent issue of Foreign Affairs an impressive trio of Nancy Birdsall, Dani Rodrik and Arvind Subramanian discuss “How to Help Poor Countries.” Their main point is that too great a focus is given to increasing aid and market access; this at the risk of ignoring some other very important issues. They discuss many of these issues and come to many conclusions (for example, that TRIPS should be abolished). One argument that caught my eye were their comments on remittances and labor mobility:

“…a scheme for temporary work visas amounting to no more than three percent of the rich countries’ total labor force. Under the plan, skilled and unskilled workers from poor nations would be allowed employment in rich countries from three to five years, and they would be replaced by a wave of workers after their time ended and they returned to their countries. Such a system would easily yield $200 billion annually for citizens of developing countries”

These workers would also bring back with them experience, entrepreneurship, funds to invest and increased work ethic. The main problem with this scheme is how to create incentives for the workers to come home –the authors offer several ideas on how to go about this. Is this the ideal way – probably not, but it is clear that creating a sustainable scheme for turning remittances into long-term economic development would be a windfall and deserves more attention.

Join the Conversation

The content of this field is kept private and will not be shown publicly
Remaining characters: 1000