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FEATURE STORY

Debunking the Myths of Global Migration

November 12, 2013

Left to right: Caglar Ozden, Asli Demirguc-Kunt, Shanta Deverajan

 

STORY HIGHLIGHTS
  • Migrants make up less than 3 percent of the world’s population
  • South-North migration has grown the most of all corridors between 1960 and 2000
  • The difference in real wages can vary between 4 and 10 times between developed and developing countries

Rates of global migration remain at historically low levels, with migrants making up less than 3 percent of the world’s population according to the latest available data. These low rates persist despite the substantial benefits that accrue both to migrants in the form of higher wages and to recipient countries in the form of new jobs and increases in economy-wide productivity.

These findings, presented by economist Çağlar Özden at a Policy Research Talk held earlier this month at the World Bank, are based on new datasets that have for the first time allowed a comprehensive picture of bilateral global migration over the last half of the twentieth century. These include the Global Bilateral Migration Database, covering total numbers of migrants in 226 countries and regions of the world, and the Global Skilled Migration Database, which tracks patterns of migration along with data on the level of migrants’ education.  

Between 1960 and 2000, the total number of migrants increased from 92 million to 165 million, but the overall share of migrants in the world’s population hovered around 2.5 percent. The demographics of the migrant population changed over this period, however, with the biggest increase among college-educated female migrants. The data also show that South-North migration grew the most among all corridors between 1960 and 2000, increasing by 55 percent. And just four countries—the United States, Canada, Australia, and the United Kingdom—attracted 65 percent of high-skilled immigrants from around the globe.

“Migration is leading to a lot of policy questions,” said World Bank Research Director Asli Demirguc-Kunt, who hosted the event. “There are issues both for migrant-sending countries and for receiving countries. With the recent focus on jobs and job creation, this makes migration the most contentious component of globalization.” 

The main benefit of migration accrues to migrants in the form of higher wages and career opportunities. Real wages between developed and developing countries can vary between 4 and 10 times depending on the migrant’s occupation, education, and location. However, recent research has produced surprising results that have overturned common beliefs about migration’s impact in labor markets in destination countries. Özden explained that immigration has had a positive effect on the wages of less-educated locals in OECD countries. Furthermore, in many of these countries emigration has mattered more than immigration in its impact on wages, with the departure of skilled workers hurting the incomes of less-educated locals.

Open Quotes

Reducing the barriers to migration is low-hanging fruit on the development tree. Close Quotes

Çağlar Özden
Senior Economist, World Bank Research Department

A case study of migration in Malaysia, a middle-income country, also revealed the positive impact of migration both for the migrants and the host country. Over the period 1990 – 2010, the share of immigrants in Malaysia’s labor force more than doubled, with a disproportionate percentage of immigrants working in unskilled labor-intensive sectors such as agriculture and construction. In the case of Malaysia, immigration stimulated the creation of higher-skilled jobs for locals in sectors and areas that attracted immigrants. Immigration also had a modest positive impact on the wages of locals, increasing the wage premium obtained by higher levels of education.

“Reducing the barriers to migration is low-hanging fruit on the development tree,” Özden said. Shantayanan Devarajan, chief economist of the World Bank’s Middle East and North Africa Region, emphasized the point, saying that lowering the hurdles for migrants “may be the biggest win for development, so let’s not miss the chance.”

During his presentation, Özden also highlighted some preliminary findings in areas that will require further analysis to arrive at definitive answers. Global migration has been proposed as a potential solution to the problems of an ageing population in OECD countries, but this looks unlikely since fertility is declining faster in developing countries than elsewhere. An open question also remains around the impact of migration opportunities on the investment choices that people make regarding their education. Finally, questions remain about the impact of immigration prospects on female education and labor force participation outcomes given the higher wages available in rich countries.