Countries restrict the overall extent of international travel and migration to balance the expected costs and benefits of mobility. Given the ever-present threat of new, future pandemics, how should permanent restrictions on mobility respond?
How does immigration affect incomes in the countries migrants go to, and how do rising incomes shape emigration from the countries they leave? The answers depend on whether people who migrate have higher or lower productivity than people who do not migrate.
Many governments seek to reduce emigration from low-income countries by encouraging economic development there. A large literature, however, observes that average emigration rates are higher in countries with sustained increases in GDP per capita than in either chronically poor countries or established rich countries.
Measuring the Spatial Misallocation of Labor: The Returns to India-Gulf Guest Work in a Natural Experiment - Working Paper 501
‘Guest workers’ earn higher wages overseas on temporary low-skill employment visas. This wage gap can be used to measure gaps in the productivity of workers due to where they are, not who they are. This paper estimates the effects of guest work on Indian applicants to a construction job in the United Arab Emirates, where an economic crisis allocated guest work opportunities as-good-as-randomly among several thousand families. Guest work raised the return to poor families' labor by a factor of four, with little evidence of systematic fraud.
There are over 25 million refugees in the world today and most of them—especially those in developing countries—do not have formal labor market access (LMA). Granting refugees formal LMA has the potential to create substantial benefits for refugees and their hosts.
Testing for Repugnance in Economic Transactions: Evidence from Guest Work in the Gulf - Working Paper 463
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.
Violence, Development, and Migration Waves: Evidence from Central American Child Migrant Apprehensions - Working Paper 459
This paper studies the relationship between violence in the Northern Triangle and child migration to the United States. It finds that one additional homicide per year in the region, sustained over the six-year period of study—that is, a cumulative total of six additional homicides—caused a cumulative total of 3.7 additional unaccompanied child apprehensions in the United States. The explanatory power of short-term increases in violence is roughly equal to the explanatory power of long-term economic characteristics like average income and poverty.
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.
Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion - Working Paper 451
Large international differences in the price of labor can be sustained by differences between workers, or by natural and policy barriers to worker mobility. We use migrant selection theory and evidence to place lower bounds on the ad valorem equivalent of labor mobility barriers to the United States. Natural and policy barriers may each create annual global losses of trillions of dollars.
For decades, migration economics has stressed the effects of migration restrictions on income distribution in the host country. Recently the literature has taken a new direction by estimating the costs of migration restrictions to global economic efficiency. In contrast, a new strand of research posits that migration restrictions could be not only desirably redistributive, but in fact globally efficient. This is the new economic case for migration restrictions: empirically, a case against the stringency of current restrictions.
Many developing countries need the World Bank’s capital less and less. What role should the Bank play in the 21st century? This paper argues that many features of the Bank today reflect a new role. That role, resting on the economic theory of bargaining and public good provision, is to reduce extreme poverty. Donor subsidies to the Bank already reflect this role, which implies new ways to structure and evaluate the Bank’s work.
This paper critiques the last decade of research on the effects of high-skill emigration from developing countries, and proposes six new directions for fruitful research.
The welcome rise of replication tests in economics has not been accompanied by a single, clear definition of ‘replication’. A discrepant replication, in current usage of the term, can signal anything from an unremarkable disagreement over methods to scientific incompetence or misconduct. This paper proposes an unambiguous definition of replication, one that reflects currently common but unstandardized use. It contrasts this definition with decades of unsuccessful attempts to standardize terminology, and argues that many prominent results described as replication tests should not be described as such. Adopting this definition can improve incentives for researchers, encouraging more and better replication tests.
Skill Development and Regional Mobility: Lessons from the Australia-Pacific Technical College - Working Paper 370
This paper was updated in March 2015.
Developing countries invest in training skilled workers and can lose part of their investment if those workers emigrate.
While measured remittances by migrant workers have soared in recent years, macroeconomic studies have difficulty detecting their effect on economic growth. We review existing explanations for this puzzle and propose three new ones. First, we offer evidence that a large majority of the recent rise in measured remittances may be illusory—arising from changes in measurement, not changes in real financial flows.
Research on migration and development has recently changed, in two ways. First, it has grown sharply in volume, emerging as a proper subfield. Second, while it once embraced principally rural-urban migration and international remittances, migration and development research has broadened to consider a range of international development processes. These include human capital investment, global diaspora networks, circular or temporary migration, and the transfer of technology and cultural norms. We present a selection of frontier migrant-and-development research that instantiates these trends.
Skilled workers have a rising tendency to emigrate from developing countries, raising fears that their departure harms the poor. In response, researchers have proposed a variety of policies designed to tax or restrict high-skill migration. Those policies have been justified on grounds of efficiency—making migrants or destination countries liable for harm—as well as on grounds of equity or ethics. This paper challenges regulations of this kind, arguing that they are generally inefficient, inequitable, and unethical. It concludes by discussing a different class of policy intervention that, in contrast, has the potential to raise welfare.