The vast liberalization of international trade and the relatively free movement of capital on a global scale no longer move parallel with the freedom of migration. OECD members are afraid to flood their countries with poor immigrants from Africa, Asia, Latin America, and Eastern Europe. However, developed countries are now willing to accept talented young graduates who gained their education in less developed countries and now want to offer their skills to foreign labor markets for a “better life.”
The 20th century saw a fundamental change with respect to immigration policies of the advanced countries. A relatively open system of international labor mobility has been steadily modified with layers of new restrictions applying primarily to unskilled immigrants from developing countries. For workers coming from parts of Africa, Latin America, and Asia, legal access to the labor markets of many of the advanced countries has become practically impossible.
This has resulted in rapid growth of illegal immigration, smuggling of humans, unfounded asylum applications, and the use of a wide range of legal loopholes and illegal methods for getting to, and staying in, an advanced country. Many risk their lives and become highly indebted to traffickers just for a chance to work abroad.
As a reaction to the tide of illegal immigrants and asylum seekers, the host countries have multiplied their efforts over the last couple of decades to control borders more effectively, to restrict the use of undocumented labor by employers, and to deter illegal immigrants and asylum seekers by making it very costly to enter the economy or have access to its labor markets. Tight immigration controls, however, have profound implications for the sending countries. It is ultimately their economies that pay the bulk of the implied migration costs.
The cost of coming illegally from a distant developing country to the United States, Canada, or the EU is reported to be in the tens of thousands of dollars. In many cases, entire families pool their savings to contribute to the cost of passage for a single family member. Legal migration of unskilled workers, where possible, also imposes a heavy financial burden on the migrants.
The cost of a visa can be as much as a year’s worth of earnings in a developing country. The visa, however, is only one element. Other fees charged by recruiting agents, plus travel expenses, are additional. Interestingly, the little empirical evidence that is available seems to suggest that the poorer the source country, the higher the recruitment costs faced by the migrants. What makes these costs a matter of serious concern is that even partial, upfront payment for the journey, whether legal or illegal, is in many cases far above the average per capita capital stock of the source country. This implies that emigration can leave the remaining residents with less capital to work with, lowering their productivity and income.
While emigration attempts impose significant costs, they also generate a stock of migrants abroad, to the extent that they are successful. This gives rise to flows of remittances, return migration, and repatriated savings, all of which can have a very positive impact on the welfare and development of the source country. Repatriated savings play a particularly important role in the creation and expansion of small businesses, generating employment and trading opportunities for the non-emigrants.
New research on barriers to immigration and the dynamics of emigration introduces some of these features of contemporary international migration into a simple model of emigration and return migration. The focus is on the process of capital accumulation in the source country and how it interacts with outflows and return flows of migrants in the presence of barriers to immigration imposed by a host country.
Research tends to show that the higher the cost of entering the host country, the smaller the net benefit of emigration for the source country. This results in slower economic development and weakens the forces that keep potential migrants at home. In the long run, disturbances that stimulate emigration, such as an increase in foreign wages or political instability at home, are found to generate a larger flow of migrants when the cost of migration is relatively higher.
On the basis of the same logic, it is found that an increase in migration costs, for a given probability of success, may actually stimulate migration, provided the responsiveness of migration flows to migration costs is sufficiently low. Such low responsiveness is likely to be observed in situations where political instability or armed conflict is pushing emigrants out of the source country. Host-country policies that raise migration costs in an effort to reduce migration flows can then prove to be counterproductive.
The theoretical model also suggests that policies that encourage return by means of supporting political, economic, and social stability in the source country or increasing the flow of repatriated savings—either by facilitating such flows or by providing return subsidies to migrants willing to return—are likely to be more effective than immigration barriers in reducing migration pressures. They have the indirect effect of stimulating capital accumulation in the source country, while barriers to immigration, by increasing migration costs, serve as a drag on capital formation. In the long run, this indirectly contributes to an increase in the desire to emigrate.
Richard Rousseau is Associate Professor at the American University of Ras Al Khaimah, United Arab Emirates. His research, teaching and, consulting interests include Russian politics, Eurasian geopolitics, international political economy, and globalization.
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Developed Countries Barriers to Immigration
March 18, 2015
The vast liberalization of international trade and the relatively free movement of capital on a global scale no longer move parallel with the freedom of migration. OECD members are afraid to flood their countries with poor immigrants from Africa, Asia, Latin America, and Eastern Europe. However, developed countries are now willing to accept talented young graduates who gained their education in less developed countries and now want to offer their skills to foreign labor markets for a “better life.”
The 20th century saw a fundamental change with respect to immigration policies of the advanced countries. A relatively open system of international labor mobility has been steadily modified with layers of new restrictions applying primarily to unskilled immigrants from developing countries. For workers coming from parts of Africa, Latin America, and Asia, legal access to the labor markets of many of the advanced countries has become practically impossible.
This has resulted in rapid growth of illegal immigration, smuggling of humans, unfounded asylum applications, and the use of a wide range of legal loopholes and illegal methods for getting to, and staying in, an advanced country. Many risk their lives and become highly indebted to traffickers just for a chance to work abroad.
As a reaction to the tide of illegal immigrants and asylum seekers, the host countries have multiplied their efforts over the last couple of decades to control borders more effectively, to restrict the use of undocumented labor by employers, and to deter illegal immigrants and asylum seekers by making it very costly to enter the economy or have access to its labor markets. Tight immigration controls, however, have profound implications for the sending countries. It is ultimately their economies that pay the bulk of the implied migration costs.
The cost of coming illegally from a distant developing country to the United States, Canada, or the EU is reported to be in the tens of thousands of dollars. In many cases, entire families pool their savings to contribute to the cost of passage for a single family member. Legal migration of unskilled workers, where possible, also imposes a heavy financial burden on the migrants.
The cost of a visa can be as much as a year’s worth of earnings in a developing country. The visa, however, is only one element. Other fees charged by recruiting agents, plus travel expenses, are additional. Interestingly, the little empirical evidence that is available seems to suggest that the poorer the source country, the higher the recruitment costs faced by the migrants. What makes these costs a matter of serious concern is that even partial, upfront payment for the journey, whether legal or illegal, is in many cases far above the average per capita capital stock of the source country. This implies that emigration can leave the remaining residents with less capital to work with, lowering their productivity and income.
While emigration attempts impose significant costs, they also generate a stock of migrants abroad, to the extent that they are successful. This gives rise to flows of remittances, return migration, and repatriated savings, all of which can have a very positive impact on the welfare and development of the source country. Repatriated savings play a particularly important role in the creation and expansion of small businesses, generating employment and trading opportunities for the non-emigrants.
New research on barriers to immigration and the dynamics of emigration introduces some of these features of contemporary international migration into a simple model of emigration and return migration. The focus is on the process of capital accumulation in the source country and how it interacts with outflows and return flows of migrants in the presence of barriers to immigration imposed by a host country.
Research tends to show that the higher the cost of entering the host country, the smaller the net benefit of emigration for the source country. This results in slower economic development and weakens the forces that keep potential migrants at home. In the long run, disturbances that stimulate emigration, such as an increase in foreign wages or political instability at home, are found to generate a larger flow of migrants when the cost of migration is relatively higher.
On the basis of the same logic, it is found that an increase in migration costs, for a given probability of success, may actually stimulate migration, provided the responsiveness of migration flows to migration costs is sufficiently low. Such low responsiveness is likely to be observed in situations where political instability or armed conflict is pushing emigrants out of the source country. Host-country policies that raise migration costs in an effort to reduce migration flows can then prove to be counterproductive.
The theoretical model also suggests that policies that encourage return by means of supporting political, economic, and social stability in the source country or increasing the flow of repatriated savings—either by facilitating such flows or by providing return subsidies to migrants willing to return—are likely to be more effective than immigration barriers in reducing migration pressures. They have the indirect effect of stimulating capital accumulation in the source country, while barriers to immigration, by increasing migration costs, serve as a drag on capital formation. In the long run, this indirectly contributes to an increase in the desire to emigrate.
Richard Rousseau is Associate Professor at the American University of Ras Al Khaimah, United Arab Emirates. His research, teaching and, consulting interests include Russian politics, Eurasian geopolitics, international political economy, and globalization.
