A day without immigrants, May 1, 2006.
Professor Ian Goldin and Geoffrey Cameron argue in their recent book, “Exceptional People: How Immigration Shaped Our World and Will Define Our Future”, that in a more interconnected world than ever before, the number of people with the means and motivation to migrate will only increase. Here they set out some of the advantages that such dynamics will have for both receiving and sending countries and why the world should embrace migration.
1. Migrants are good for economies.
Migrants have been the engine of human progress throughout history. The movement of people has sparked innovation, spread ideas, relieved poverty and laid the foundations for all major civilizations and the global economy.
Globalization has increased the tendency for people to seek their fortunes outside their country of birth and the 21st century will give more people the means and reasons to move.
We should embrace this future because of the benefits it promises for sending countries, receiving countries and for migrants themselves.
The movement of people has fuelled the development of modern economies. Migrants promote innovation, connect markets, fill labor gaps, reduce poverty and enrich social diversity.
2. But what about the downside?
I am not blind to the significant costs and risks of greater migration, but in “Exceptional People” we show that societies have been too focused on the downsides of migration rather than the underestimated benefits.
We recognize that particular communities and groups of workers may be disadvantaged and justified in what they perceive as excessive migration and a threat to their employment and cultures.
Political leaders should confront this challenge by adopting a range of burden-sharing measures which seek to reduce the impact on any one community.
For example, migrants should be distributed across the European Union and the people of Malta and the Italian island of Lampedusa should not be made to absorb migrants simply arising from their proximity to North Africa.
Similarly, the local authority of Slough in the U.K. which happens to be near London’s Heathrow Airport, should be given extra resources to cope with an unusually high burden which migrants place on it.
A better understanding of the benefits and costs is required. While the benefits are typically greater than the costs, they are often diffuse and appear in the medium term, while the costs may be local and immediate. These must be acknowledged and addressed in order to convince the affected communities that more migration is in their interests.
Governments should focus their efforts on burden sharing and support for pressured local services, as well as ensuring that all migrants are legal, and have the associated rights and responsibilities.
Simply limiting numbers undermines short-term competitiveness and long-term growth and dynamism, and tends to result in a growing number of undocumented migrants, making everyone worse off in the longer term.
3. What are the economic benefits?
We show in “Exceptional People” that even modest increases in the levels of migration would produce significant gains for the global economy. Developing countries would benefit the most.
The World Bank estimates that increasing migration equal to 3% of the workforce in developed countries between 2005 and 2025 would generate global gains of $356 billion.
Completely opening borders, economists Kym Anderson and Bjorn Lomborg estimate, would produce gains as high as $39 trillion for the world economy over 25 years. These numbers compare with the $70 billion that is currently spent every year in overseas development assistance and the estimated gains of $104 billion from fully liberalizing international trade.
Two reliable ways to generate ideas and innovation in an economy are to increase the number of highly educated workers and to introduce diversity into the workplace. Both of these objectives are advanced through immigration, and the experience of countries like the U.S. bears out the bold propositions of this “new growth theory”.
According to Robert Putnam, immigrants have made up more than three times as many Nobel Laureates, National Academy of Science members and Academy Award film directors as have native-born Americans.
Migrants have been founders of firms like Google, Intel, PayPal, eBay, and Yahoo. More than a quarter of all global patent applications from the United States are filed by migrants, although they are only about 12% of the population.
By 2000, migrants accounted for 47% of the U.S. workforce with a science or an engineering doctorate, and they constituted 67% of the growth in the U.S. science and engineering workforce between 1995 and 2006.
In 2005, a migrant was at the helm of 52% of Silicon Valley start-ups, and a quarter of all U.S. technology and engineering firms founded between 1995 and 2005 had a migrant founder. In 2006, foreign nationals living in the United States were inventors or coinventors in 40% of all international patent applications filed by the U.S. government.
Migrants file the majority of patents by leading science firms: 72% of the total at Qualcomm, 65% at Merck, 64% at General Electric, and 60% at Cisco.
4. Migration does not lead to job losses.
While skilled migrants are a source of dynamism, low-skilled foreign workers often take jobs that are considered less desirable by natives or they provide services—such as home care or child care—that release skilled workers into the labor market.
Highly skilled migrants typically work in growing sectors of the economy, or in areas such as health care, education and information technology that are short of native workers. Giovanni Peri of the Federal Reserve Bank of San Francisco found that, “immigrants expand the economy’s productive capacity by stimulating investment and promoting specialization…This produces efficiency gains and boosts income per worker.”
Macroeconomic studies of developed countries with significant foreign-born populations have consistently found that migration boosts and sustains growth. A study of OECD countries found that increased immigration is accompanied by commensurate increases in total employment and GDP growth. A government-sponsored study in the UK found that migrants contributed about £6 billion to the national economy in 2006.
George Borjas estimates that migrants make a net contribution of $10 billion a year to the U.S. economy, a figure that other economists have suggested is at the low end of the range.
Between 1995 and 2005, 16 million jobs were created in the U.S. and 9 million of them were filled by foreigners. During the same period, academics Stephen Castles and Mark Miller estimate migrants made up as many as two-thirds of new employees in Western and Southern European countries.
5. We’re going to need migrants more than ever before.
Over the next fifty years, demographic changes in many developed countries will make expanding migration an increasingly attractive policy option.
Medical and public health advances mean that people are living longer, while persistently low fertility levels and the end of the post-World War Two baby-boom mean that the number of native-born workers in developed countries will fall in the coming years.
The fiscal burden of this aging population will be borne by an ever-smaller number of workers and will also generate an unprecedented demand for low-skilled health and home care services.
The effects of a shrinking labor force will be compounded by the fact that as educational attainment rises in developed countries, fewer people are interested in taking on low-skilled service jobs or in working in the trades and construction sectors.
Between 2005 and 2025, the OECD estimates its member countries are expected to see a 35% increase in the percentage of their workforces with tertiary education. As education levels rise, so do expectations about work.
Working-age populations are already growing rapidly in some developing countries due to late demographic transitions. While many countries in East Asia are beyond the phase of their demographic transition when population growth peaks, the most dramatic effects will appear in sub-Saharan Africa, where the population will grow by a billion people between 2005 and 2050.
The economically active population between ages 15 and 64 will also grow steadily among developing countries in South-Central Asia—which include countries from Iran across to India and Nepal—in the next half-century. Countries in the Middle East and North Africa will also grow at a similar rate, although not reaching the magnitude of these regions.
Despite increasing controls, we are entering a period of intensifying migration, a product of a greater supply of potential migrants from developing countries and a burgeoning demand for both low- and high-skilled workers in the UK and other developed countries.
Over the last 25 years the total number of migrants internationally doubled.
It is likely to double again in the coming decades. Governments and society need urgently to develop a much better understanding of the costs and benefits of different policy options.
Short-term protectionist measures, as is the case in trade, are counterproductive. It is vital that evidence based and longer term perspectives are introduced to provide clarity which goes beyond the currently muddled discussions on migration policy.
Ian Goldin is Director of the Oxford Martin School and a Professorial Fellow at Balliol College, University of Oxford. Geoffrey Cameron is his research associate. The arguments and data above derive from their book, “Exceptional People: How Migration Shaped Our World and Will Define Our Future”, recently published by Princeton University Press and co-authored with Meera Balarajan.