Mass Migration: A Worldwide Phenomenon
Stark differences in income drive migration trend
Summary of a presentation by Dean Yang, assistant professor of public policy, Gerald R. Ford School of Public Policy, University of Michigan
A lopsided world
Immigration and mass migration are not issues that the United States faces alone; they are worldwide phenomena.
In the year 2000, about 175 million people lived outside their countries of birth. Between 1965 and 2000, the fraction of people living outside their home countries increased from 2.2 to 2.9 percent of world population.
(See Yang’s Power Point presentation, slide 2.)
The major economic force behind this phenomenon is the stark difference in incomes between the developing world and the developed world: About 5 billion people live in countries where incomes are less than $5,000 per year; and of those, 3.5 billion live in countries where incomes are less than $1,000 per year.
At the other end of the spectrum, about 800 million people live in countries where average incomes are above $20,000 per year.
“World income distribution is vastly uneven,” Yang said. “A relatively small number of people live in rich nations, while the vast majority of the world population lives in poverty. There is an amazing lack of distribution in the middle.”
(See slide 9.)
With such extreme economic differences, the incentive to migrate to richer nations is overwhelming. Immigrants can substantially increase their incomes by moving to developed countries.
“The income gains [from migration] are not just incremental, they are huge – 5-20 times greater,” Yang said.
(See slide 10.)
On a massive scale
America is a major destination for migrants, along with Australia and Europe. In the last four decades, the foreign-born population in the United States has grown dramatically in both absolute terms and as a share of the U.S. population
Migrants from Latin American represent by far the greatest amount of growth, followed by Asia. In the early 1980s, Latin America and Asia overtook Europe as the largest contributors to the U.S. population.
(See slide 3.)
Shocks and cushions
“What leads people to set out on journeys of often phenomenal distances to plunge themselves into unfamiliar foreign places and to suffer extended separation from families?” Yang asked.
If the United States is ever to gain control of its borders, manage and regulate migration flows, one needs to understand how the migration flows arise.
Three primary factors drive migration:
- Salaries: Income differences between developing and developed nations are dramatic.
- Shocks: Developing countries are much more subject to shocks of various kinds – natural disasters, civil wars and other risks.
- Social networks: Once established, large migrant populations in developed nations serve as beachheads for chain migration.
(See slide 8.)
Factors affecting migration can also be stated as economic and geographical:
- Economic: Earnings differentials are the most important economic driver. Wages are also more stable and less prone to fluctuations in the developed world. Income in developing countries income is very volatile due both to poor economic policies and natural disasters.
(See slide 12.)
- Geographical: Developing countries tend to be located in parts of the globe where there is greater exposure to natural hazards like hurricanes, earthquakes, flooding and droughts.
“Incomes in the U.S. are much more predictable. There is smooth growth from one year to the next,” Yang said. “The rich world is just more safe and predictable.”
(See slide 13.)
In 1998, Hurricane Mitch killed about 20,000 people and caused $5 billion in damage in Central America. After the hurricane, the U.S. experienced a sharp increase in migration from Honduras, El Salvador and Nicaragua.
(See slide 16.)
“At a very high level, migration correlates with natural disasters in developing countries,” Yang said. “Shocks stimulate people to migrate to escape the negative effects of disasters.”
Migrants then send money back in the form of remittances for disaster relief.
“Households might send relatives overseas to send remittances as a kind of insurance against shocks. Migrant remittances serve as informal insurance for households in poor countries,” Yang said.
(See slide 14.)
Social networks
Migration is costly. The process of migration includes to the cost of travel, which may include payment to smugglers to evade border authorities, the cost of finding housing, finding work and the essentials of daily living.
Established migration networks help meet or reduce all of these costs. Networks can provide loans for travel costs, temporary housing on arrival and help in finding work. Migrants tend to go where other migrants are located in order to assist with a smooth transition.
(See slides 19 and 20.)
Migrants usually find jobs fairly quickly after arriving. Oftentimes, migrants have jobs already lined up before they arrive. Migrant networks are important in assisting new arrivals find work and community.
According to a recent survey of Latin American migrants, once they get to the U.S., they are quickly able to find work: 38 percent took less than two weeks to find their first job, and 13 percent took between two weeks and a month to find a job.
(See slide 24.)
Pluses and minuses of migration north and south of the border
What are the effects of massive international labor flows on the developing countries where migrants originate? To what extent do international remittance flows reduce poverty in developing countries? And how does international migration either hinder or help long term economic growth in poor countries?
“To destination countries like the U.S., this is an important question: If migration does promote development in poor countries, then a large amount of migration today may lead to economic development and less migration in the future,” Yang said. “But migration may lead to less economic development and therefore more migration in the future.”
Remittances migrants send back to their home countries are a substantial source of revenue in developing countries. Migrant remittances are larger than U.S. foreign aid to developing countries, which has fallen since the 1990s. In 2002, migrants sent back $64 billion in remittances to their home countries. This compares to $51 billion in U.S. foreign aid and $126 billion in foreign direct investment.
(See slide 4.)
Not only are remittances large in magnitude in comparison to foreign aid, they have grown substantially over the years.
(See slide 9.)
“There is substantial evidence that international migration, and the remittances that inevitably follow, help alleviate poverty and lead to improvements in well-being in the short run,” Yang said.
Remittances are associated with substantial improvements in education and living standards in developing countries. Households in El Salvador that receive remittances have higher child schooling attainment and are more likely to have indoor plumbing and electricity.
(See slides 28, 29 and 30.)
“Is international immigration going to help economic growth long term?” Yang asked. “The impact of migration on long-term growth is less clear. This is an open question.”
(See slide 27.)
On the pessimistic side, migration can cause “brain drain.” The most educated, entrepreneurial and ambitious people leave their home countries to the benefit the destination country. Also on the negative side, remittances can cause exchange rate appreciation, weakening export competitiveness.
On the optimistic side, remittances can be used for development and capital improvement. Migrant resources pay for child education and health investments, which stimulates long term growth.
Return migration can bring knowledge of advanced technologies back to developing countries. Recent economic successes in China, India, Taiwan and Korea have been accompanied by substantial return migration.
(See slide 31.)
Written and reported by Bruce Murray
1 response to Mass Migration: A Worldwide Phenomenon
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I'm not surprised, they price the indigenous population out of work by accepting lower wages.
I think that immigration, let alone mass immigration, is doing more harm than good. There are other ways to help the poor in their own home country.
How much is given by wealthy Indians to the 400,000,000 poor (really poor) of India? --- precious little I believe.