Highlight 25/2022 – The positive impact of migration

Ahmad Naweed Walizada, 29 April 2022

In today’s globalized world, people are constantly moving and migrating in large numbers. The positive effects of these movements are rarely highlighted. This article will therefore shed light to the positive impact of migration on both origin and destination countries.

Migration is an important phenomenon caused and orchestrated by powerful economic and labour market forces. It is not new but has existed during the whole history of humankind. People have been moving from their home places for centuries. According to IOM, migrant is a person who moves away from his or her place of usual residence, whether within a country or across an international border, temporarily or permanently, and for a variety of reasons. An IOM 2022 report states that the estimated number of international migrants is currently around 281 million, which equates to 3.6 percent of the global population.

More than 90% of the world’s migrant population left their home places voluntarily and mostly for economic reasons (“economic migrants” who decide to leave their country of birth in search of employment). The remaining 10% are refugees and asylum seekers who have fled to another country to escape conflict and persecution.

International migration undoubtably poses serious challenges: pressure on public services and state resources, overcrowding, language barriers and cultural differences, increased level of pollution, racial tensions and discrimination. However, there is an opposite side of the migration phenomenon : the positive economic and social impact on host countries.

Immigrants boost output and employment of the host country, create new opportunities for native workers, provide skills needed for economic growth, generate new ideas, stimulate international trade, and contribute positively to long-term fiscal balances. Integrating migrants into the labour market is the key to maximizing their contribution to production and development, limiting their potential burden on public finances, and reducing their potential impact on crime rates. The expansion of the labour force, the increase of cultural variety, the filling of skill gaps in the labour market, and the boost to the local economy are the major positive effects of migration on host countries.

On the other side, migration has a positive impact on the countries of origin. It lowers  the unemployment rate, which reduces job rivalry. It creates less demand on natural resources and services such as food, water, education, and healthcare. In addition, the countries of origin benefit from the migrants who return home after they have acquired new skills and knowledge in the host country.

Most importantly, migration creates a flow of remittances, an important source of income for many poor families (albeit their ambiguous macroeconomic impact). Migration also helps increase international trade, FDI (foreign direct investments), and technology transfer. For policymakers in countries of origin, the optimal strategy is to reduce the loss of highly skilled labour and to take advantage of the financial and technological inflows by enhancing business and employment opportunities as well as by creating new ones.

To summarize, international migration can have a significantly positive impact. It contributes substantially to labor market flexibility by reducing barriers to mobility. For example, migrants accounted for 47% of the increase in the workforce in the United States and 70% in Europe over the last ten years. They also play an important role in the economic development of different production sectors. In addition, migrants might pay more in taxes and social contributions than the benefits they receive. In terms of economic growth, migration can help to increase the size of the working-age population and contribute to the development of high-skill labor as well as to technology transfer and technological advancement.

Ahmad Naweed Walizada, Highlight 25/2022 – The positive impact of migration, 29 April 2022, available at www.meig.ch

The views expressed in the MEIG Highlights are personal to the author and neither reflect the positions of the MEIG Programme nor those of the University of Geneva.

References:

1. https://www.iom.int/about-migration
2. https://publications.iom.int/system/files/pdf/WMR-2022.pdf
3. https://www.mckinsey.com/featured-insights/employment-and-growth/global-migrations-impact-and-opportunity
4. https://www.migrationwatchuk.org/key-topics/pressure-on-healthcare-schools-roads-and-trains
5. https://www.vazirgroup.com/news/impacts-of-migration-around-the-globe/
6. https://www.oecd.org/migration/OECD%20Migration%20Policy%20Debates%20Numero%202.pdf