Migration and Developing Countries 21 November 2007 Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung Berlin Jeff Dayton-Johnson Johannes Jütting OECD Development Centre

2 International migration and developing countries Roadmap to the presentation: 1.What do we think we know? 2.What do we really know? 3.What can we do? 4.Concluding remarks

3 Two main messages Good news: Migration can contribute to reduce global poverty Inconvenient news? Development in general nor aid in particular will slow or stop migration... for a long, long time

4 International migration and developing countries What do we think we know? 1 What do we really know? 2 What can we do? 3 4 Concluding remarks

5 1) What Do We Think We Know? International migration is exploding Canary Islands, boat people: most immigrants to EU/OECD come from poor countries humanitarian crisis Brain drain robs poor countries of doctors, nurses and teachers Remittances: No need for aid any more

6 International migration and developing countries What do we think we know? 1 What do we really know? 2 What can we do? 3 4 Concluding remarks

7 2 ) What do we really know Size, trends and composition of migrants – intra-OECD migration – skill levels and destination Brain drain versus brain gain Remittances – substitute or complement to aid Development policies – can they stop emigration?

8 International migrants as a share of population Source: United Nations.

9 Origin of migrants to EU-15 Source: OECD Database on Expatriates and Immigrants, 2004/2005 Latin America (4.4 per cent) Ecuador: 0.7 Colombia: 0.7 Suriname: 0.6 Brazil: 0.6 Argentina: 0.5 Jamaica: 0.4 Venezuela: 0.4 Peru: 0.3 Chile: 0.2 Africa (13.6 per cent) Morocco: 4.5 Nigeria: 0.4 Algeria: 3.9 Senegal: 0.4 Tunisia: 1.3Somalia: 0.3 Angola: 0.6 Ghana: 0.3 South Africa: 0.6 Dem. Republic of Kenya: 0.4 Congo: 0.3 Egypt: 0.4 Mozambique: 0.2 EU-15 Wider Europe (16.4 per cent) Turkey: 5.8Croatia: 1.0 Serbia-Montenegro: 2.2Russia: 0.7 Albania: 1.7Bulgaria: 0.3 Romania: 1.6Lithuania: 0.3 Ukraine: 1.4Belarus: 0.3 Bi-H: 1.1 Asia (7.0 per cent) India: 1.8 Pakistan: 1.2 Vietnam: 0.8 China: 0.7 Indonesia: 0.6 Bangladesh: 0.5 Philippines: 0.5 Sri Lanka: 0.4 Hong Kong: 0.3 Japan: 0.2 Intra-EU migration: ABOUT HALF

10 Skill level of migrants to Europe and North America Source: OECD Database on Expatriates and Immigrants, 2004/2005

11 Where do low-skilled migrants in the OECD come from? Source: OECD Database on Expatriates and Immigrants, 2004/2005

12 The Migration Cycle Source: OECD (2007) Migration affects development in three ways (+/-): –Changes in labour supply –Receipt of remittances –Changes in productivity The relative importance of each effect varies over the migration cycle

13 Skill levels and poverty reduction Low-skilled mobility raises wages or reduces unemployment/underemployment The low-skilled remit more –Circular mobility –Unaccompanied by family members –Shorter stays –Closer to home Remittances by the low-skilled have a larger poverty-reduction impact

14 Brain drain: gains and losses Source: OECD (2007) Brain gain for some countries –Incentive for quality improvement in the educational system –No chance to work in qualified jobs –Returning brains Brain drain hits the poorest developing countries hardest!

15 Brain Drain: A Problem for the Poorest Countries Source: OECD Database on Expatriates and Immigrants, 2004/2005; Cohen and Soto (2001)

16 Remittances matter…. Source: IMF Balance of Payments Statistics; UN Trends in Migrant Stock, Money sent home annually, per migrant (2000)

17 percentage Source: Fomin, Pew Hispanic Center Consumption Goods Education SavingOther Cons. Investment …. mostly used for consumption Uses of remittances, Mexico 2000

18 Remittances and aid: complements, not substitutes Remittances tend to finance consumption: often productive (consumer durables, house improvement, education, health) Incipient schemes for community investment of remittances (e.g. Tres por uno, Zacatecas, México)

19 Will development slow migration? How it works: Poor countries specialise in production and of goods that use labour intensively New jobs created in export sector, absorbing would-be migrants Outsourcing

20 Probably not Adjustment is a long-term process Demographic factors will slow it further Migration hump hypothesis; with prosperity, more emigration Pitfalls of using aid to influence migration

21 Summing up 1.Humanitarian crisis/illegal migration only part of the inflow 2.Brain drain – more complex; some countries gain by exporting 3.Remittances good, but not good enough 4.Complex interaction: development - migration

22 International migration and developing countries What do we think we know? 1 What do we really know? 2 What can we do? 3 4 Concluding remarks

23 3) What Can We Do? More coherent policies for more effective mobility management 1.Look at migration policies through a development lens 2.Look at development policies through a migration lens

24 Migration policies through a development lens More flexible options for migrants and employers, including Smart labour-market access policies to allow legal circular mobility Creating paths to naturalisation/citizenship for longer-term migrants Reducing remittance costs and increasing access to the financial system Co-developpement: engaging diasporas

25 Development policies through a migration lens For sending countries, integrate migration into national development strategies. Macroeconomic policies (tax revenues, exchange rates…) Human resources and higher education policy Infrastructure investment (transport, communications) Dealing with the informal sector

26 International migration and developing countries What do we think we know? 1 What do we really know? 2 What can we do? 3 4 Concluding remarks

27 4) Concluding remarks Migration an integral part of globalisation Creating more awareness of the development – migration nexus Striving for policy coherence Not raising false hopes, promoting realistic solutions

28 For more info:

29 Vielen Dank ! Thank you for your attention !

30 What about illegal immigration? Estimates of illegal immigrants for selected countries: –United States: million (3.5-4% population) –Netherlands ( % population) –Switzerland ( % population) –Greece (3.4% population) Overstaying often more common than fraudulent entry or sea landings –Italy, 2005 estimates: 60% overstayers, 25% entered with false documents, and 14% entered by sea landings in southern Italy Source: International Migration Outlook 2006, 2007

31 Estimates of the Irregular Migrant Stock thousands% of pop.Year (years since regularisation) Japan United States (18) Netherlands Spain* (4) Italy (4) Greece* (3) Portugal (6) Source: OECD * = Subsequent regularisations not accounted for in these estimates.

32 Transfer costs high Costs of transfers to Mexico (%, for 200 USD ) Source: Pew Hispanic Center Costs of remittances to Latin America * (%, 200 USD) Cuba Rep. Dominican Jamaica Haïti Venezuela Bolivia Mexico Honduras Guatemala Nicaragua Colombia El Salvador Peru Ecuador Average * From USA; 2004 Source: PEW Hispanic Center