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Migration and development, economic growth, aid effectiveness, economic history
Michael Clemens is co-director of migration, displacement, and humanitarian policy and a senior fellow at the Center for Global Development, where he studies the economic effects and causes of migration around the world. He has published on migration, development, economic history, and impact evaluation, in peer-reviewed academic journals including the American Economic Review, and his research has been awarded the Royal Economic Society Prize. He also serves as a Research Fellow at the IZA Institute of Labor Economics in Bonn, Germany, an Associate Editor of the Journal of Population Economics and World Development. He is the author of the book The Walls of Nations, forthcoming from Columbia University Press. Previously, Clemens has been an Affiliated Associate Professor of Public Policy at Georgetown University, a visiting scholar at New York University, and a consultant for the World Bank, Bain & Co., the Environmental Defense Fund, and the United Nations Development Program. He has lived and worked in Colombia, Brazil, and Turkey. He received his PhD from the Department of Economics at Harvard University, specializing in economic development, public finance, and economic history.
Last week I blogged about a research discovery. An influential study had found that a 1980 wave of Cuban refugees into Miami, known as the Mariel Boatlift, had caused the wages of workers there to fall dramatically. In a new paper co-released by CGD and the National Bureau of Economic Research, my co-author and I revealed that large shifts in the racial composition of the underlying survey data could explain most or all of the same fall in wages. The author of the previous study, George Borjas, raised two substantive questions about our research, which I answer briefly in this post.
Do immigrants from poor countries hurt native workers? A study by an influential immigration economist at Harvard University recently found that a famous flood of Cuban immigrants into Miami dramatically reduced the wages of native workers. But there’s a problem. The Borjas study had a critical flaw that makes the finding spurious.
An influential strand of research has tested for the effects of immigration on natives’ wages and employment using exogenous refugee supply shocks as natural experiments. Several studies have reached conflicting conclusions about the effects of noted refugee waves such as the Mariel Boatlift in Miami and post-Soviet refugees to Israel. As a whole, the evidence from refugee waves reinforces the existing consensus that the impact of immigration on average native-born workers is small, and fails to substantiate claims of large detrimental impacts on workers with less than high school.
We study a natural experiment that excluded almost half a million Mexican ‘bracero’ seasonal agricultural workers from the United States, with the stated goal of raising wages and employment for domestic farm workers. We reject the wage effect of bracero exclusion required by the model in the absence of induced technical change, and fail to reject the hypothesis that exclusion had no effect on US agricultural wages or employment. Important mechanisms for this result include both adoption of less labor-intensive technologies and shifts in crop mix.
While short-terms effects from migration have received much attention over the years, Florence Jaumotte and her co-authors examine the longer-term impact of migration on the GDP per capita, and hence standards of living, of receiving advanced economies. Carefully addressingthe risk of reverse causality, the paper finds that immigration significantly increases the GDP per capita of host economies, mostly by raising productivity. Both high- and low-skilled migrants can contribute to raise productivity, likely through skill complementarity in the case of lower-skilled migrants. They also find the gains from immigration appear to be broadly shared across the population.
A small pilot project between the US and Haiti showed that the US could directly and effectively assist Haitian families to earn dignified livelihoods—at negative cost to US taxpayers. That is, the two countries could cooperate for development in a way that actually adds value to the US economy. It did this with short-term work visas.
Organized groups of individuals challenging the status quo are critical for institutional change and economic development patterns. This paper studies the 2011 student movement in Chile, the largest protest mobilization in the country’s history, in which hundreds of thousands of students skipped school to protest with the goal of reforming the educational system. Using administrative data on millions of students’ daily school attendance decisions on protest and non-protest days, a large network composed by the lifetime history of classmates, and differential network exposure to the first national protest, González employs an instrumental variables approach to test how networks affect protest behavior. The main finding is that individual participation follows a threshold model of collective behavior: students were influenced by their networks to skip school on protest days only when more than 40 percent of the members of their networks also skipped school. Additional findings show that protest participation imposed significant educational costs on students and helped to shift votes towards non-traditional opposition parties. Taken together, results indicate that networks amplify the effect of protests in non-linear ways with potentially significant consequences for institutional change.
Why do some governments provide more public goods than others? Focusing on the case of public education, this article challenges the centrality given to the role of democracy and mass pressure for redistribution; and posits an alternative explanation rooted in the role of internal political disorder. The paper begins by documenting that, historically, in the vast majority of Latin American and European countries, public education systems emerged and achieved considerable expansion during non-democratic regimes and in the absence of popular demand for education. Why did political elites have an interest in setting up these costly systems in the absence of electoral incentives to do so? Based on historical evidence for select cases, Paglayan posits that instances of widespread internal political disorder such as civil wars propelled elites to use mass education as a means to instill values that would help prevent future rebellions against their authority. The statistical tests for this argument focus on assessing how a legacy of civil war impacts post-war investments in education provision. In analyses that exploit the regional concentration of civil war in Chile during the mid-nineteenth century, she shows that in the aftermath of the 1859 civil war—the causes of which had nothing to do with education provision—the central government made an unprecedented investment in mass schooling, and the expansion was greatest in those regions that had rebelled against the government. She also shows the generalizability of this argument with original data on education enrollment rates and civil war for Latin American and European countries beginning in 1830. Overall, the paper conceptualizes mass education less as a service for ordinary citizens and more as a tool used by political elites to consolidate power.
A yearlong project of the Ford Foundation has asked a simple question—“What is inequality?”—to CGD’s Michael Clemens along with a group including Nobel laureate Joe Stiglitz, Gloria Steinem, Sir Richard Branson, and Sir Elton John. Many spoke about rising domestic inequality. But to Clemens, #InequalityIs global. And innovative policy can tap the power of migration to reduce inequality while minimizing its risks.
The World Bank opened in 1946 to finance a global economy just emerging from colonization and warfare and just embarking on the Cold War. Today the global development landscape is radically different, and capital circles the globe at volumes unthinkable back then. Why keep the World Bank now?
Many poor countries, especially in Africa, will miss the MDGs by a large margin. But neither African inaction nor a lack of aid will necessarily be the reason. Instead, responsibility for near-certain ‘failure’ lies with the overly-ambitious goals themselves and unrealistic expectations placed on aid. While the MDGs may have galvanized activists and encouraged bigger aid budgets, over-reaching brings risks as well. Promising too much leads to disillusionment and can erode the constituency for long-term engagement with the developing world.
Workers from poor countries can find enormous economic opportunity by working temporarily in a rich country. But agencies that fight global poverty do little to facilitate guest work. This may be because guest workers are perceived to typically suffer negative side effects that outweigh the benefits. This paper uses a natural experiment to test several perceptions of harmful side-effects on Indian guest workers in the Gulf. The research shows little evidence that the harmful side-effects often ascribed to guest work are typical and systematic, though this does not contradict the occurrence of many individual cases of harmful side-effects.
This paper argues that every rich country should consider its immigration policy to be part of its international development policy, and vice versa. A development policy that includes migration will be more effective; an immigration policy that includes development will better serve rich countries’ ideals and interests.
Within a decade, Europe will require hundreds of thousands more nurses than it is likely to train. To meet the growing need, nurses will move in large numbers to Western Europe from other countries, including those in Eastern Europe. But Eastern Europe currently lacks nurses already relative to Western Europe, while Eastern European youths crave opportunities in skilled employment. How can nurses trained in Eastern Europe move to Western Europe in a way that benefits both regions?
In 2016 on the CGD Podcast, we have discussed some of development's biggest questions: How do we pay for development? How do we measure the sustainable development goals (SDGs)? What should we do about refugees and migrants? And is there life yet in the notion of globalism? The links to all the full podcasts featured and the work they reference are below, but in this edition, we bring you highlights of some of those conversations.