Ideas to Action:

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Migration and Development: Q&A with Michael Clemens

May 8, 2006

Immigration and DevelopmentQ: Much of the recent migration debate in the U.S. has focused on the impact of illegal immigrants--or shall we say undocumented workers--on the U.S. economy. What about the impact of migration on the sending countries? Is there a consensus among development economists about whether emigration is good or bad for development?

A: Ever since mass emigration from Ireland in the 19th century caused wages there to rise, it has been clear to most economists that the departure of low-skill workers largely benefits the sending country (see, for example, Migration as Disaster Relief: Lessons from the Great Irish Famine). A UN balance sheet of the economic effects of migration found that movement of low-skill workers offers sending countries many benefits and at essentially no cost (see the World Economic and Social Survey 2004: International Migration (PDF) ).

But there's a raging controversy about the effects of emigrating high-skill workers. People worried about so-called brain-drain argue that skilled migrants take with them not only their abilities but also public investments in their education. But some skilled émigrés return home, many send money, and many assist in technology transfer and the creation of trade and investment networks. Their departure may even change the education decisions of those remaining behind--for example, by causing people to study harder and invest more in education. Some economists claim to show that the net effect of skilled worker emigration is actually positive (see Brain Drain and LDC’s Growth: Winners and Losers).

Q: Compared to the current arrangements, would a U.S. guest worker program have any effect on the development impact of migration?

A: There is likely to be little development impact of such a law on the migrant-sending countries, because the primary effect will be to regularize a small fraction of those already moving rather than to change who moves. There are 11 million undocumented immigrants in the U.S. now, with another 700,000 arrivals every year, but various proposals foresee caps of just 100,000 to 400,000 on the total number of visas--most of which will be used by people who would have migrated anyway (see the recent brief (pdf) from the Migration Policy Institute). If there is to be a development effect from any new law, it might come by making immigration somewhat more politically palatable to U.S. citizens (e.g. by shifting workers' medical expenses from tax payers to employers) thereby preventing a backlash against new immigration down the road.

Q: Within the development community, there is a lot of interest in remittances. By one estimate, remittances from the U.S. in 2004 were $47 billion, more than twice the nearly $20 billion that the U.S. provided in official assistance. What is known about the impact of remittances on development?

A: In El Salvador and Honduras, remittances exceed 15% of national income, and the positive effect of remittances on health and education in recipient households has been documented in several countries (see, for example, Remittances, Household Expenditure and Investment in Guatemala). But while remittances exceed foreign aid globally, this is not the case in most low-income, migrant-sending countries. Sub-Saharan Africa gets about $8 billion in remittances per year but gets more than $25 billion in aid. Many of the countries sending the fewest migrants--and thus getting the lowest levels of remittances--are also the poorest.

Q: Your own research has been focusing on the causes and effects of skilled migration. What is your hypothesis, and how are you going about testing this?

A: I study the consequences of skilled-worker migration on developing countries of origin. To make the question manageable I focus on one profession and one region: African doctors and nurses. I have measured the movement of health professionals out of 53 African countries, allowing me to observe the relationship between emigration and health outcomes across countries and over time. My hypothesis is that many African countries have both very poor health and increasing emigration of health professionals because of underlying problems with their health systems--not because of migration itself. I recently returned from Kenya and Rwanda, and all the top health policy officials I spoke with in these countries agreed with this basic premise.

Q: Give Us Your Best and Brightest: The Global Hunt for Talent and Its Impact on the Developing World by Devesh Kapur and John McHale suggested four policy options for rich and developing countries so that the benefits of migration are more equally shared with the developing world. One proposal is compensation: that rich countries compensate developing countries for the loss of skilled workers, for example, by headhunters paying a fee to the sending country, or that developing countries impose an exit tax, to recoup the costs of educating skilled workers who leave. In your view, does such an approach make sense?

A: The answer will surely vary depending on the case, but it is not at all obvious that this is appropriate. Consider migrant health professionals. The only academic study to focus on the remittances of these workers measured how much money is sent home by Tongan and Samoan nurses in Australia. The study found that the typical nurse sends home well over U.S. $2,000 every year, regardless of whether he or she has been in Australia for 5 years or 25 years. So Tonga and Samoa get back far, far more than they spent to educate those nurses. These developing island nations experienced a large financial gain--not loss--due to their public investments in departed nurses. Why should those sending countries be compensated for having made an investment with a huge financial return? Certainly there are complexities of the domestic distribution of those resources, but it is not clear that those are best handled through the blunt instrument of international government-to-government compensation checks.