Second International Migration and Development Conference

The World Bank, jointly with Agence Française de Développement (AFD), organized the Second International Migration and Development Conference on September 10-11th. The organizing committee consisted of Caglar Ozden and Maurice Schiff of the World Bank and Hillel Rapaport of Bar Ilan University (currently visiting Harvard University). This was a follow-up of the conference in Lille, France in June 2008, after which AFD agreed to sponsor a conference every year. The next conference is scheduled to be held at the Paris School of Economics in June 2010, hosted by Francois Bourguignon, former Chief Economist of the World Bank.

The conference program included the latest papers by the leading academics and researchers addressing a wide range of issues on the development and the migration nexus. Among the topics were migration and institutions, illegal migration, link between poverty and migration, human capital formation and migration, self-selection, migrant networks and social externalities. A total of 38 papers including two keynote addresses via parallel sessions were presented.  

The event drew a large audience both from the World Bank, from research institutions, NGOs and donor governments – both within DC and outside. The turnout was beyond expectations, especially given the highly academic nature of the papers presented. This was a clear indication of the importance attached to migration issues. A select group of papers from the conference will be published in a special issue of the World Bank Economic Review.

The two keynote addresses were delivered by George Borjas of Harvard University and L. Alan Winters, Chief Economist of Department of International Development (DFID), UK and the former Director of Research at the Word Bank. George Borjas’ paper aimed to present a unified theoretical framework to analyze wage effects of migration. L. Alan Winters’ presentation, on the other hand, was devoted to the discussion of the impact of past and present economic crises on migration patterns and presented fascinating historical information to guide current policy dilemmas.

Some of the papers offered new evidence on some of the “old” topics in the migration debate such as poverty and macroeconomic impacts of remittances. Other papers investigated emerging topics such as the impact of migration on political accountability in home countries and the differential behavior of undocumented migrants.

The paper presented by Chris Parsons introduced the Global Bilateral Migration Database, 1960-2000, an output of the World Bank migration team. Despite various shortcomings due to data limitations, this dataset is likely to be among the main sources for many future empirical studies.

In a joint paper with Thorsten Beck, Maria Soledad Martinez Peria aimed to identify the main determinants of the costs of remittances by using a new World Bank dataset on 119 remittance corridors. They find that there are significant volume and competitions effects; corridors with high volume and large number of providers, especially large number of banks, have significantly lower fees.

Prachi Mishra’s paper (with Antonio Spilimbergo) explored the linkages between exchange rates and labor mobility. By exploiting the variation across countries in the degree of integration between domestic and international labor markets, they find that elasticity of wages with respect to exchange rates is significantly higher for countries that are more integrated in the world labor markets.

A group of papers explored the linkages between migration and institutions. Elisabetta Lodgiani’s paper shows that, in general, there is a positive relationship between skilled migration and improvements in institutional quality, operating mainly through incentive effects. John McHale’s paper with Xiaoyang Li confirms these results, especially for political institutions, but finds the opposite effect for economic institutions. Catia Batista presented an interesting paper based on an experiment in Cape Verde. She finds that migration positively contributes to demand for political accountability which may improve institutional environment.

Several papers explored old questions with new dataset or methods. David McKenzie’s paper was on an old question on the link between remittances and brain drain. Combining data from various household surveys in destination OECD countries, he finds that the more educated remit more since they earn more.

Cristina Neagu explores another old question in the literature – the assimilation of migrants in the destination country – using data on the career placement of migrants from multiple censuses in the US. Controlling for cohort effects and other observable human capital measures, she finds that there is still significant variation among migrants based on their country of origin, mainly due to differences in quality of the education systems and selection effects. Countries with poor placement improve over time but there is never full catch up.

Steven Stillman explores the impact of migration on poverty on remittances using the data from a unique migration lottery program in New Zealand for the Pacific islands which guarantees that the results are not biased by the selection effects.

In order to overcome a different type of selection effect, Dean Yang designed his own experiment to see whether if migrants’ remittance decisions are affected by their lack of control over how they are used by their families at home. The experiment offers Salvadoran migrants with different types of saving accounts with varying level of control over their use and the preliminary results indicate that remittance levels do respond to such measures.

In a provocative paper,  Michael Kremer argues that presence of low-skilled immigrant labor for household employment allows highly educated women to enter the labor force and generates significant benefits for the receiving countries.

Presentations were followed by lively discussions and thoughtful exchanges that offered valuable contributions to presenters and identified further research questions. The unifying characteristic of the papers were that they represented the cutting-edge research in the area.

The full program of the conference as well as the papers presented can be accessed on the Second International Migration and Development Conference webpage.

The conference concluded with a panel discussion that was chaired by Caglar Ozden of the World Bank and featured L. Alan Winters, Luca Barbone, Sector Director, Poverty Reduction and Economic Management at the World Bank, Susan Martin, Donald G. Herzberg Professor of International Migration at Georgetown University and Jaime de Melo, Professor of Economics at the University of Geneva. 

The participants were asked to address two interrelated questions. First, how the policy environment changed during the crisis and whether this might threaten the emerging multilateral efforts on removing domestic barriers on international mobility . The second question was on the linkages between policy and research. More specifically, as “consumers” and “producers” of research, the panelists were asked to present their views on most promising and pressing research avenues.

Among the main points stressed were, rather than trying to find “the one answer” to a policy question, researchers should aim to investigate and quantify the “trade-offs” that policymakers face so that the process becomes more efficient and rational.  More specifically, researchers should be aware that the impact of research is gradual, almost like slow erosion of a cliff by waves over a long period of time.

In identifying topics for future research, the main areas highlighted were the ones where “policy change is more likely to occur” such as temporary movement of workers, role of networks and analysis of the impact of brain drain.