European migration

Pulling up the ladder

During the mass migration between the middle of the nineteenth century and the outbreak of the first world war, about a third of Europeans migrated from their country of birth, mainly to America.  Today levels of migration are proportionately lower, because nation states have imposed much tighter restrictions on the movement of people than at any time in human history.

Earlier this year, Lant Pritchett and Michael Clemens laid down a challenge to development policy thinking:

Development is about people, not places; the development benefits of labor mobility are enormous; and the costs of greater labor mobility, sorely feared, are often exaggerated. The next step for global development policy might be to take labor mobility seriously as a powerful weapon in the fight to give all people on earth the same opportunities that most readers of this chapter now enjoy.

The benefits of migration for development

We know that migration can make a hugely important contribution to development.  It benefits the migrants themselves, enabling them to increase their own incomes and lift themselves and their families out of poverty. It also benefits the countries from which migrants come, as Ireland and Norway found in the nineteenth century. Remittances to less developed countries are now about $325 billion per year, much more than $120 billion a year of official aid. These remittances, for the most part, go directly into the hands of low-income people and they rise faster than aid after natural disasters.  Migration is also an important driver of technology transfer and knowledge sharing which contributes to long term economic growth.  It can improve leadership and governance: two thirds of developing-country heads of state or heads of government studied and lived abroad before they returned to lead. Of the 21 cabinet ministers of Singapore, 20 have an advanced degree from outside Asia and almost all have extensive work experience outside Asia.

Economists have estimated that a relaxation of rich countries’ restrictions on temporary labour mobility of about 3% of their labour forces would raise developing country welfare by an amount roughly equal to total annual global aid flows (see here and here). The British government already knows this: the papers were co-authored by Alan Winters, now Chief Economist at DFID.  Unlike aid, a small increase in labour mobility would cost rich countries nothing: on the contrary, it would cause their own economies to grow.

Why so little reaction to changes in UK policy?

Yet supporters of international development have been reluctant to take up the cause of increasing immigration, perhaps because it is politically unpopular in rich countries. (Michael Clemens at the Center for Global Development, and Sarah Mulley at IPPR stand tall as honourable exceptions to this generalisation.)

Fear of championing a politically unpopular cause might be why there has been little reaction in development circles to last week’s announcement of changes to UK immigration policy.

The new British stance is likely to have significant adverse effects on people in developing countries.  Because free movement of people within the EU is guaranteed by treaty, the UK government can cut total migration only by clamping down on migration from countries outside the EU.  Under the previous policy, people from developing countries faced implicit discrimination because of the “previous salary” provisions; now Tier 1 General immigration has been almost completely abolished, closing off one one possible route for immigrants from developing countries. The government has announced that it will sharply reduce the number of students coming from abroad. Students make up almost two thirds of the non-EU migrants entering the UK each year.  More than 40% of the student visas are for study below degree level, which the government plans to end altogether.  I have not been able to find a breakdown of the country of origin of these students, but it is a fair bet that the majority are from developing countries. The government also plans to end completely the link between temporary migration (eg for students) and the ability to settle permanently, and it is consulting about stopping post-study visas.  All this is a very big deal for developing countries, both because it will reduce immigration from developing countries and because it will limit access to education and skills transfer.

I was struck that that the possible impact on development and poverty was not mentioned by any member of Parliament in the debate.  Do MPs not know that this will have a significant impact on developing countries, or do they not care?

As well as being bad news for developing countries, the policy of reducing the number of students from abroad is also bad news for Britain – not just for educational institutions whose markets will shrink, but for the loss of lifelong connections that former students in Britain take away with them, with adverse effects for our reputation, influence and commerce abroad.

The impact on rich countries of immigration

Immigration remains a hugely sensitive political issue in the UK.  Some people are concerned about the economic effects: on jobs and incomes, and increased demand for public services such as education, housing and welfare.  These economic worries don’t stand up to scrutiny. The suggested impact on jobs relies on the mistaken idea that ‘there is only so much work to be done’ and that a job given to an immigrant is one fewer for someone else.  Immigrants increase demand in the economy as well as the labour supply, so immigration will not, on its own, lead to an increase in unemployment.  Nor does immigration reduce wages for native-born workers – on the contrary, the evidence is that immigration leads to a small but positive increase in wages resulting from increased demand. There may be some negative effects on the wages of low-paid workers, especially on the wages of previous immigrants; but given that the overall effect is positive, these distributional effects can easily be offset with appropriate tax and spending policies.  On balance, immigrants make a huge contribution to the economy.  Nor is immigration a drain on the public finances.  A UK Home Office study estimated that immigrants paid in 10% more in taxes than they received in public services and benefits, compared to only a 5% ‘surplus’ for the UK-born population.  A subsequent study by IPPR found that in times of deficit, immigrants made a small contribution to the deficit, albeit smaller than UK-born citizens.  Either way, the effect on public finances is small.  It suggests, however, that the government should be more agile about ensuring that spending on public services responds quickly to changing population patterns so that public services in particular communities do not come under pressure when there is a rise in the number of immigrants there.

Other people are concerned about the social effect of increasing diversity of distinctive cultures in our society. Providing reassurance about that is beyond my competence as an economist; but speaking personally I value living in a diverse society and dislike intolerance of difference.

I don’t want to be dismissive of the fears and concerns of the population about greater immigration, though the evidence suggests that the overall economic effects are positive.  But even if there were negative effects, that would have to be weighed against the hugely positive impact for both the immigrants themselves, and for developing countries as a whole.   We have obligations to other people, including those who did not have the good fortune to be born in the UK; and almost any other way of discharging those obligations will be more expensive to us than permitting greater migration, which is likely to be on balance to our advantage.

Recognising the impact on global poverty

I’m an optimist, but I’m not delusional:  I know that concern about global poverty is not going to convince politicians to open the country’s borders in the face of domestic political concerns about immigration.  But that does not mean that development advocates should surrender. If the government is determined to have a tighter immigration policy, let’s make sure that the details of the policy are development friendly.  The business lobby has managed to persuade the government to relax restrictions on transfers within firms. If overall immigration is capped, and powerful lobbyists secure a relaxation of the kinds of immigration they favour, the burden of the reductions will fall on those who have little voice and nobody willing to speak for them.

The absence of any apparent interest in the development impact of this new immigration policy has convinced me that there should be a requirement on the government to publish a quantified poverty impact assessment of any policy proposals which are likely to have a significant effect on the people of the developing world, including immigration, trade, intellectual property, climate change, and arms sales.  I don’t imagine that this would change policies overnight, but a requirement to produce and publish such an analysis might concentrate the minds of policy-makers and and their advisers on whether there are ways to adjust the details of the policy in a way which does less harm, and perhaps some good, for development.

Under the International Development (Reporting and Transparency) Act 2006, the UK Secretary of State for International Development is required to publish an annual report containing “such general or specific observations as he thinks appropriate on the effects of policies and programmes pursued by Government departments on (a) the promotion of sustainable development in countries outside the United Kingdom, (b) the reduction of poverty in such countries.” I hope that the Secretary of State, who has a strong personal commitment to transparency, will consider it appropriate to include in the next report observations about the effect on development and poverty of these changes to immigration policy.

Finally, Gideon Rachman of the Financial Times notes in his blog that the government’s new immigration policy won’t tackle the underlying problems that has made this a political issue. He concludes:

So, unable effectively to tackle the kind of immigration that actually upsets people, the British government is taking aim at the one group of migrants that are largely uncontroversial and that unambiguously contribute to the country’s well-being. What idiocy.

17 comments on “Pulling up the ladder”

  1. Great post Owen.
    I have observed other similar inconsistencies among development professionals. One that has always struck me as strange and frustrating is that most people who work on maternal health are committed to pursuing maternal health improvements through a particular strategy (most often, increasing access to emergency obstetrical care); and they put none of their weight behind family planning programs which can reduce unwanted pregnancies. This latter strategy can save more women’s lives per dollar spent in many high mortality countries than other traditional “maternal health” strategies.

    The conclusion I’ve drawn is that, deep down, most people are more like advocates for specific strategies than for the goals they purport to be pursuing. I think you could explain the lack of interest of development professionals in immigration policy in the same way. Development people would rather stay focused on their own preferred strategies for helping people out of poverty – than to be distracted by putting their weight and attention on another strategy – no matter how effective it is.
    If you buy this, even partly, the interesting question is why? It seems irrational to me, but then, I’m not part of one of the many advocacy communities in development. Perhaps some of your readers who are part of these communities could speculate?
    I don’t buy the idea that they avoid pushing for better immigration policies because it is too unpopular. Giving money to developing countries is often not very popular – so I can’t see development advocates being so sensitive to that. I think it’s much more likely that they just don’t care. I have seen Michael Clemens present his work in several places, I can tell you, I am always shocked by how little traction his insights get among people who ought to be jumping out of their seats to start advocating for more liberal immigration policies as a powerful means to lift people out of poverty.

  2. http://www.migrationwatchuk.org/briefingPaper/document/20

    http://www.onlineopinion.com.au/view.asp?article=10137

    Here are 2 papers which counter the assertions in this post.

    The uk is now one of the world’s most densely populated countries and inequality is rising . The pressures on our environment are multiplying and are likely to do so for the foreseeable future.
    Surely we can find another way to assist poorer countries and to aid their development without relying solely on the traditional immigration route ?

    1. Hi Jane

      The Migration Watch analysis has been pretty comprehensively shown to be garbage. See, for example, this post by Sarah Mulley and this piece by Philip Le Grain. I’m afraid whatever claim they may have had to be taken seriously has been eroded by their slapdash use of figures.

      I hadn’t seen the Jane Sullivan piece before, but it is wrong too, and in a pretty obvious way. If a growing population added to an economy’s needs, but not its capacity to meet them, then the UK would be poorer today than it was in 1850 when our population was 21 million, about a third of the population today. Clearly that isn’t right. Additional people do require additional infrastructure: but they also provide additional resources to the economy which more than meet those needs.

      Here is a list of countries which you can rank in order of population density by clicking the top of that column. You’ll see that the UK, far from being one of the world’s most densely populated countries, is 51st. You’ll also see that highly densely populated countries are, on average, richer than those with lower population densities.

      In the meantime, 25 thousand people in the developing world die each day of easily preventable and curable diseases.

      Kind regards
      Owen

  3. Thank you for the reply Owen ; I guess the figures could be argued about -(I’ve just looked at Sir Andrew Green’s reply to the criticisms of his figures ), but surely there has to be an acknowledgement of limits ?

    As Jane O’ Sullivan’s article discusses, there comes a time when population pressure and economic growth outweigh the traditional wealth creation position. Costs of infrastructure provision multiply when population growth exceeds a certain point. I take your point about the increase in the UK’s GDP, but as a follower of steady state economics I would say, as an amateur in thse matters, that we are reaching social, environmental and economic limits.

    I believe that we should give developing countries all the assistance we can, including adequate provision for female education and advancement and free health services-especially family planning and adequate hygiene and nutrition, but since I also believe that human population growth and its consequences must be addressed, I would say that immigration is not the answer.

    No doubt you will find this offensive, but many people share my concerns .
    From what I have read recently, many developing countries are worried about the effects of their brain-drains and many are also set to implement some kind of non-coercive population policy : Rwanda for example ?

  4. Regarding April’s point, although giving money to developing countries is often unpopular, doing so is nevertheless passive or undemanding in a way that living with more immigrants is not. Thus people who simply moan about giving can grow hysterical about increasing immigration.

    So making the case decisively for letting in more immigrants would require countering not only the cultural, noneconomic arguments skirted by Owen’s post, but also the concerns Jane raises. Perhaps one should insist that the social, environmental, and economic limits that worry her—though real enough—apply to the entire planet rather than to its fifty-first most densely populated nation? And that permitting greater movement of populations, hence greater access to education, constitutes a serious strategy for addressing the planet’s social, environmental, and economic problems? I allude to the benefits of greater access to education both to people from poor countries and to people from rich countries, referring, in the latter case, to the good that would flow from an authentically global conversation about what limits we must all accept.

    The changes on the horizon for UK immigration policy—motivated by worries familiar also in the United States, where I live—will only promote suspicions that will make it even harder to have this overdue global conversation.

  5. 2. Stabilise Population
    Why? All else being equal, the total resource use of a country will increase when
    either the number of people living in the country increases, or the amount that each
    of these people consumes increases. To achieve a steady state economy, it is
    therefore necessary to stabilise — not just per capita resource use — but also
    population numbers. We need smaller footprints, but we also need fewer feet.
    How? To stabilise population in the UK, the government should develop, adopt, and
    implement a non-coercive population stabilisation policy. This policy should aim to
    balance immigration and emigration, and promote incentives to limit family size to
    two or fewer children. Moreover, population issues should be added to the job
    description of an inter-departmental minister, to assess the effects of population
    growth and recommend other potential stabilisation measures.
    To stabilise population globally, the UK should support policies that provide
    education, access to birth control, and equal rights for women everywhere. There
    are roughly 80 million unplanned pregnancies per year worldwide — a number that is
    almost equal to annual global population growth. If access to family planning could
    be provided to all women worldwide, this single step would go a long way towards
    stabilising global population.

    From ‘Enough is Enough’ ; report published by CASSE : Centre for the Advancement of the Steady State Economy.

    To answer Dan Stoll’s comment, I agree that the limits should indeed be applied to all of us, but I differ in thinking that allowing large population movements will not facilitate the conversation which, as he says, we need to have.

    Rather I would say, we need to invest more generously in poorer countries- in real terms-and develop a worldwide system of easy access to education-available to all-which does not rely on ever larger movements of people.

    The internet could play a significant role in this area.

  6. Hi Owen,

    A couple of quick points:

    1. There is incomplete data on the countries that students studying non-degree courses. But I have seen data – sadly not publicly available – that shows that the key countries include: China; India; Pakistan; Nigeria; Bangladesh; Vietnam; and Thailand.

    2. The headlines suggest that the government will end study below degree level. But – if you look at the Teresa May speech – she says that there will be “some flexibility” for sub-degree levels. I think it is very likely that students will still be able to come for A-level, university foundation courses etc. There will be some manipulation of the stats to suggest that migration has reduced, but the reality will be different. (Students on short course won’t be counted.)

    Cheers.

  7. Owen,

    Professors Hermann Daly, Brian Czech and Tim Jackson don’t consider it to be illiterate garbage-and they are all economists.

    It is an alternative view on what is happening in the world and while I make absolutely no claims to expertise in this field, I would say, having studied it for some time, that it offers a more equitable and viable way forward for all of us : rich and poor alike.

  8. Dear Mr. Owen:
    Please so your homework in the future. As a six continent traveler, I can attest that immigration solves nothing, but foments a more dangerous and unsustainable future for all humans and other creatures on this finite planet. Immigrants flooding into first world countries simply create the same population overload they fled. As the world grows by 80 million annually on a finite planet, there is no way we can feed, water and house such a massive overload. Better to promote birth control and family planning. Better to NOT add another 2 to 3 billion by 2050. Better to plan for ample water, education, food and energy rather than endless population explosion and starvation. All causes are lost causes without stabilizing human population. frostywooldridge.com

    1. Frosty

      I need no lectures on the need to provide access to family planning for people who want it. I have argued strongly for that, most recently here and here.

      The most important driver of population growth is poverty. If you want a world of smaller families and slower population growth, then fight to redouble, and redouble again, our efforts against poverty around the world.

      Fighting poverty is important not just because it will limit our claims on the finite resources of the planet, but because of the human suffering that poverty causes.

      That’s what I’m doing in this blog post. I’m pointing out that migration is one of the most powerful weapons we have against poverty. Aid alone cannot lift a third of the world out of poverty. If we are serious about reducing poverty and limiting the growth of the world population, we have to address the limits to trade, the damage we do the environment and – yes – the limits we place on individuals to live where they choose.

      Owen

  9. Owen,

    The harsh reality remains that UK is immigrating itself out of itself. It’s on course to add 11 million more people, via immigration, and is driving itself into an unsustainable and multicultural (conflicted) future. Whether it is Easter Island, or UK, you cannot keep adding millions to a finite space. With the world adding 80 million annually, no country or continent can continue to feed, water and house those numbers. Africa right now, at 850 million expects to hit 1.4 billion within 40 years. Watch more horrific starvation, animal extinctions and worse. How about more birth control and family planning for Africans instead of continuing to ‘feed the children’ which means more children until you cannot feed any of them. Result: collapse. Migration, instead of a powerful weapon against poverty, simply spreads poverty and illiteracy all over the planet. Reality check from an extensive and logical traveler. Frosty Wooldridge

    1. Frosty – I’m certainly in favour of doing more to ensure that people (from whichever continent) who want smaller families have access to family planning t enable them to exercise that choice; and I’ve written about that here. But if you really believe that limiting the growth of the population is important, your focus should be on reducing poverty, because there is a very clear and strong link between rising incomes and reducing population growth.

      Unlike reducing the growth of the population, migration does not add to the pressure on the planet (it is a zero sum redistribution). Nor, contrary to what you say, does it “spread poverty and illiteracy”. Migration is one of the most powerful mechanisms yet identified to spread prosperity and well-being.

      Listening to people defending the privileged position that they acquired through the accident of their birth, and doing so on the false grounds that to share their luck with others would “spread poverty”; and arguing instead that people not like them should limit their reproduction, makes me truly nauseous.

      Owen

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Owen Barder

Owen is Senior Fellow and Director for Europe at the Center for Global Development and a Visiting Professor in Practice at the London School of Economics. Owen was a civil servant for a quarter of a century, working in Number 10, the Treasury and the Department for International Development. Owen hosts the Development Drums podcast, and is the author Running for Fitness, the book and website. Owen is on Twitter and