Migration and Development 27 June 2008 Geneva Denis Drechsler OECD Development Centre More Coherence for Better Outcomes

2 Overview of the Presentation 1.What do we think we know? 2.What do empirics say? 3.What can we do?

3 Two Main Messages The good news: Migration can contribute to development and poverty reduction The (potentially) inconvenient news: Development and development aid will not stop migration flows.

4 What do we think we know? International migration is exploding Most migrants to OECD countries come from poor regions The loss of human capital (brain drain) reduces countries’ development prospects Financial returns by migrants (remittances) replace development aid

5 What do empirics say? Source: United Nations Population Division.

6 Effects on Sending Regions Migration of low-skilled workers –Higher financial returns –Larger impact on poverty reduction –Potential improvements in low-wage sector –Increase of productivity Migration of the highly skilled –Possible knowledge transfer –Incentive to invest in human capital –Potentially a win-win situation –However: particularly problematic in poor developing countries

7 Migration of University Graduates (in %) Source: OECD Database on Expatriates and Immigrants, 2004/2005; Cohen and Soto (2001)

8 Remittances are important… Source: IMF Current Accounts; UN Trends in Migrant Stock, Annual transfer of a migrant, in USD (2000)

9 Quelle: Fomin, Pew Hispanic Center Cons.Educ. Saving Other Invest. …and mostly go into consumption Use of remittances, Mexico 2000 (in %)

10 Summing up Migration is an integral part of globalisation International mobility can be expected to increase with development Development potential of migration is currently insufficiently utilised Need for partnerships and more coherent policies

11 What can we do? Donors –Introduce more flexibility: towards circular migration –Improve guidelines for recruitment of the highly skilled –Initiate concerted actions with banks and other financial institutes to reduce transfer costs of remittances Partner Countries –Integrate migration into development strategies –Improve human resource management to compensate the consequences of migration –Invest in transport and communication infrastructure to increase mobility of workers

12 For more information: