Human Mobility and Economic Development: Why Migration Makes Sense

July 13, 2011Marketsby Ian Goldin and Geoffrey Cameron

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The Statue of Liberty

13 July 2011.

See the Slide Show >>> A New Look At Human Migration

Politicians from advanced economies today face a conundrum on whether to restrict or welcome migrants and foreign workers. While an influx of foreign workers may provide economic benefits to a country, there have been societal concerns over the possibility of an increase in social problems, a lack of social integration, and also the threat that foreign workers bring to local employment. But according to Ian Goldin and Geoffrey Cameron, migration is in everyone’s interest. The long term benefits associated with global migration and human mobility are simply too large to ignore and should not be left in the hands of politicians.

OXFORD – In almost every rich country, anti-immigrant fervor is at fever pitch. But it is a malady that must be resisted if these societies are to continue to prosper and developing countries are to fight poverty and sustain economic growth.

A higher rate of global migration is desirable for four reasons: it is a source of innovation and dynamism; it responds to labor shortages; it meets the challenges posed by rapidly aging populations; and it provides an escape from poverty and persecution. By contrast, limiting migration slows economic growth and undermines societies’ long-term competitiveness. It also creates a less prosperous, more unequal, and partitioned world.

Of course, there are short-run, local costs to higher rates of migration that must be addressed if societies are to enjoy the much larger long-term benefits. And yet, despite domestic opposition in recipient countries, the number of international migrants has doubled over the past 25 years, and will double again by 2030. Rapid economic and political change – and, increasingly, environmental change – dislodges people and encourages them to seek opportunity and security in new homes.

Against the backdrop of rapid globalization, the individual risks and costs of moving internationally will continue to fall. The combination of the estimated increase in the world’s population by two billion people, lower transport costs, better connectivity, and growing transnational social and economic networks could and should lead to increased movement of people. If this process is allowed to take its course, it will stimulate global growth and serve to reduce poverty.

And yet, while the incremental reduction of barriers to cross-border flows of capital, goods, and services has been a major achievement of recent decades, international migration has never been more strictly controlled. The classical economists such as John Stuart Mill saw this as both economically illogical and ethically unacceptable. Adam Smith objected to anything that obstructed “the free circulation of labor from one employment to another.”

By the nineteenth century, the development of steam and other transport meant that one-third of the population of Scandinavia, Ireland, and parts of Italy emigrated. Mass migration gave millions of Europeans an escape route from poverty and persecution, and fed the dynamism and development of countries like the United States, the United Kingdom, and various colonies.

The rise of nationalism prior to the outbreak of World War I led to the widespread introduction of passports and ushered in stricter controls on the international movement of people. A hundred years later, despite falling barriers to trade, finance, and information, the walls to free mobility have been built higher.

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