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CGD provides rigorous research and innovative policy approaches that enable migrants, refugees, and hosts communities to prosper.
Forced displacement is at historic levels as a result of global conflict and crises. Meanwhile economic migration—a known driver of development—has been demonized as part of the backlash against globalization. As nations work toward the Global Compacts on Migration and on Refugees, governments and international agencies are struggling to respond to the scale of need and the polarization of attitudes.
First and foremost, the impact of migration is a policy choice: With the right policies, migrants and refugees can fuel economic growth in both the countries they live in and leave behind. CGD brings rigorous research and evidence to these contentious political issues and designs policy approaches that enable migrants, refugees, and their hosts to prosper.
Accurate measurement of the effect of migration on the income of potential migrants is a crucial factor in determining the impact that lowering barriers to migration would have on world income. However, measuring this effect is complicated by non-random selection of migrants from the general population, which makes it hard to obtain an appropriate comparison group of non-migrants. This paper uses a migrant lottery to experimentally estimate the income gains from migration, thus overcoming this problem. New Zealand allows a quota of Tongans to immigrate each year with a lottery used to choose amongst the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration to be obtained by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the lottery, after allowing for the effect of non-compliance among some of those whose names were drawn. We find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods other than instrumental variables are found to overstate the gains from migration by 20 to 82 percent.