Immigration Policy as a Development Tool
Michael Clemens | Center for Global Development | March 2010
The sad truth of the matter is that global income distribution in the year 2010 looks not so very different from that under the Apartheid regime in South Africa. In spite of a myriad of development projects, there is still a great chasm between rich and poor countries. However, one tool has as yet been left untried in attempts to bridge the divide: labor mobility. Increased freedom for workers to move internationally has the potential of greatly contributing to the reduction of poverty. Rich countries should regard their immigration policies as part of their development policies and change their immigration rules accordingly.
Labor has been the only means of production not to be affected by the rapid globalization in recent years. For the sake of promoting development, barriers to the movement of capital, technologies, and goods have all been lowered. But the obstacles impeding the free movement of labor have not been removed. This is due in large part to the manner in which the distribution of income is accounted for in developmental statistics. Income is calculated per inhabitant living in a developing country. It is more instructive however to consider how much net income a worker has independent of his place of residence. To cite one example: a worker living in rural Kenya can improve his lot by 50% by moving to Nairobi. By relocating to London, however, his income will rise by 300%. Hence the worker's mobility greatly improves his personal financial situation and contributes to a bridging of the gap between rich and poor internationally. Since most workers abroad contribute to their relatives' welfare in their countries of origin via remittances, the positive effect of their employment abroad on income is further reinforced. The income calculation tied to the worker's place of residence made sense in the 1950s, when the ability of workers to move was much more restricted. Today much greater mobility for laborers renders this way of thinking obsolete. In view of the higher income a worker can achieve in a developed country, the mobility of labor ought to be regarded as an important instrument in fighting poverty worldwide. However, legal restrictions on immigration in rich countries massively hinder the effective use of this tool. Growing protectionist sentiment in the wake of the international financial crisis moreover renders the promotion of a liberalization of immigration policy in the industrialized world difficult at present.
This notwithstanding, greater mobility of labor is a development tool of increasing importance. A Haitian immigrant in the U.S. earns 680% more there than he did at home. No developmental project in the world can claim similar success. Legal barriers to immigration should be lowered as swiftly as possible. Rich countries should issue temporary work visas to workers from developing countries. Contrary to widespread claims, immigration does not entail negative consequences on wages received in host countries. Empirical studies have shown that effects on wages in host countries are negligible, whereas immigrants stand to gain over 200% in income by working in a developed country. It is time to abandon "zero-sum" thinking in relation to immigration policy. Policymakers should finally recognize labor mobility for what it is - a low-cost and highly effective tool for promoting development.
This summary was prepared by the Atlantic Community Editorial Team from "A Labor Mobility Agenda for Development" published here by the Center for Global Development.
