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Migration, Inequality and Development: Why International Cooperation Is Needed

By David Khoudour

OECD's David Khoudour

Migrants are all too often viewed as a problem in destination countries when they can and should be seen as a potential solution to inequality in and between nations. But their ability to fuel development in poorer countries, while also bolstering developed-world economies, will hinge on governments employing the right policies and cooperating internationally.

The truth is we live in an unequal but flat world. Thanks to advances in communication technologies, most of the planet's inhabitants, including the poorest, know how other people live thousands of kilometres away. They also know they can improve their lives without having to wait decades for their countries to reach the living standards of the richest ones. Crossing borders, though it can be a long and risky enterprise, is often the most efficient socio-economic ladder for individuals and the best alternative to the long process of income convergence between nations.

Yet, the vast majority of the earth's inhabitants do not migrate. International migrants actually make up just 3% of the world population. Even though 9 out of 10 of the estimated 232 million migrants worldwide leave their home countries to seek better job opportunities and higher wages - a trend that reflects the huge income differential between countries - things are more complicated than they seem.

Contrary to conventional wisdom, most migrants are not the poorest people from the poorest countries. Most come from middle-income countries like China, India and Mexico. And within these countries, they are not the poorest either. Moving to another country requires a certain amount of capital - financial, human and social - which the poorest do not possess. For that reason, very unequal countries do not always see high levels of emigration: the poor do not have the financial means to move abroad and the rich would lose their economic and social power by doing so.

If the world's poorest people are not migrating, can migration still reduce inequalities within and between countries?

The first beneficiaries of migration as a driver of inequality reduction are migrants themselves. Even though they can face demanding labour and social conditions in host countries, moving abroad usually comes with a significant wage increase. In countries with generous welfare states, immigrants also benefit from social protection and better education prospects for their children. In origin countries, families can use the money sent back by the migrants to improve their living conditions. They can spend more, can access better education and health services and may even invest in small businesses.

Nonetheless, migration is not the panacea to all development problems and can even worsen inequality. Immigrants are often victims of human trafficking, labour exploitation and racial discrimination. Local populations, especially the lowest skilled, can also see migrants as a threat in terms of job competition and social cohesion. For origin countries, migration can turn into a development trap. In situations where emigrants relieve pressure on the labour market through their departure and help families back home invest in education and social protection through remittances, states can lack the incentive to make necessary reforms.

The net positive impact of migration on development and inequality reduction depends on the policies implemented in origin and destination countries. Immigration has become a sensitive and divisive issue in many countries - yet those same countries face labour shortages and demographic imbalances caused by population ageing. Immigration may be part of the solution.

The phenomenon of migration today requires an international co-operation framework that views migrants not only through a security lens, but as key players in countries' economic and social development. Political leaders must begin acknowledging the needs of their economies instead of using immigrants as scapegoats for the problems in their countries. Such a framework would promote migrants' rights (including the right not to migrate), better regulate recruitment agencies, increase the number of bilateral agreements that facilitate labour mobility and implement more programmes to leverage the development impact of migration.

Some countries are already working in this direction. If we are to change current perceptions on migration and make it an efficient motor of inequality reduction, these countries need to be followed by many more.

David Khoudour is head of the migration and skills unit at the OECD Development Centre.

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