Migration is movement of people from one

place in the world to another for the purpose of

taking up permanent or semi permanent
residence, usually across a political boundary.
Why do people move?
A study in Eastern Europe showed
that economic factors like income
differences drive short-term migration,
while demographics are likely to
influence long-term movement.

Migration pressures, created by the

development gaps between poor and
rich countries and fuelled by the
process of globalization, will result in
further migration.
 4 key questions which regularly
arise in debates about the economic
consequences of migration
 Has migration led to unemployment ?
Common belief-there is a fixed amount of work that can be done
in the economy and that if one group gets more of that work than
existing workers will get less

Fact-immigration has very small or no effect on employment of

workers already resident

Net immigration has been rising since 1997 but the

unemployment rate fell between Jan 1998 and August 2005, from
6.4% to 4.7% in UK
A possible explanation could be the following-
 i m m i g r a n t s a c c e p t j o b s
w it h l o w w a g e s

f ir m s i n c r e a s e la b o u r d e
s in c e h i r i n g l a b o u r n o w c

i m m ig r a n t s b e t t e r o nf f a s t i nv ec es bt h e e t t y e r
n o w e n j o y b e t t e r e m p l o y m e n t p r o s

u n e m p ly m e n t f a l
h a v e a c c e s t o n e

d u e t o r e l a t i v e ly h
n a t i v e s n o w i n b e t
Does migration cost the tax payer?

Common belief-not everyone benefits from high scale of

migration-it means extra pressure o public services

Fact-study using 1999-2000 data found that migrants in UK

Paid-£31.2 billion in taxes
Received- £28.8 billion in public services and goods
Making a net contribution of about £2.5 billion
 Does migration damage developing countries?
Two issues dominate the topic-Brain drain and Remittances
1. BRAIN DRAIN
 many migrants have high level of education and those who come
from developing countries may have benefited from their societies’
decision to invest in education at the expense of other public goods.

 Brain drain also may also harm developing countries that hope to
attract foreign investment

 It is possible that home countries may benefit from the return of

migrants brain gain). but the most talented migrants are most likely
not to return
Rate of immigration to USA of people aged 25+ with 13yr
or more of education

Country Rate of
immigration
Guyana 80.62%

Jamaica 69.34%

Gambia 58.51%

El Salvador 46.63%

Trinidad 43.70%
2. REMITTANCES
 Remittance are not only growing quickly but are now worth twice
as much as Overseas Development Assistance and almost as much
as Foreign Direct Investment

 An important study by World Bank economists found that

remittances can be a very powerful anti-poverty tool, predicting
that, on an average, a 10% increase in remittances would produce a
decline in the share of people living in poverty of between 1.8%
and 3.5%.

 However there is some debate about the impact of remittances on

the level of inequality in the home countries.
Remittances constitute a major part of the GDP of many
countries
Top recipients of migrant remittances-2008
 Does migration hurt migrants?

Migrants are the clearest gainers from migration in terms of income but
individuals might face significant risks of exploitation and social
exclusion.

The World Bank modeled potential economic gains by 2025 from

increased migration-
–The baseline was a world in which the proportion of migrants in each
region stays the same over time
–And in the alternative scenario migration increases enough to produce a
3% growth in the size of the workforce in high income countries
Real incomes in 2025, difference between the baseline scenario
and the alternative

Difference in Difference in
total real total real
income($ income(%)
billion)
Natives in high income +139 +0.36
countries
Natives in developing +143 +0.86
countries
New migrants +162 199

Across the world as a whole alternative scenario raises total

income by $356 billion-a 0.63% increase
…..THE OTHER SIDE OF THE COIN
A large scale project showed-
Migrant employees earned less than the average for all employees
Migrants working in hospitality sector worked unpaid overtime,
those working in construction were paid overtime but not necessarily
at a higher rate
Only a minority received benefits like paid holidays, sick leaves
and free accommodation
Workers who were ‘illegally’ resident often experienced
vulnerability, fear and anxiety
Conclusion-
–Host countries gain from migration. though it is possible to debate the
size of these gains
–The impact of migration on home countries is probably positive but
would be more if a higher proportion of workers sent money to their
families
–The impact on migrants themselves is generally positive but individuals
can face several costs
–There is little evidence that migration has had a negative effect on the
distribution of jobs and wages, though, there is a risk in specific sectors
–Migrants should be the clearest winners but must be guaranteed the
rights to social services and benefits.
Thank
You
Ankit Agarwal(7918)
Mehak Sharma(7932)