Migration is here to stay, how can Europe benefit?

Over the past few years, the official strategy of the European Union (EU) to mitigate migratory pressures has been to promote economic development in Sub-Saharan Africa. However, this strategy contradicts most economic studies, which show that migration increases as countries develop, which is why international organizations are redoubling their efforts to show the benefits of migration and how governments can benefit from it.

Long-run evidence on migration flows suggests that economic development will not reduce migration in poor countries. Studies show that flows seem to follow an inverted U-shape curve with respect to income per capita: Poor countries have low migration flows, but these increase with development up to a turning point after which they decrease again (see graph). Considering that average GDP per capita in Sub-Saharan African countries is US$ 1,631 – still far from the turning point – we should expect migration to increase in the near future. But why is this so?

Source: “Does Development Reduce Migration?” Clemens, 2014

One way to understand the migration decision is with a cost-benefit analysis: What are the gains? What are the costs? And finally, is it worth it?  Taking this view, some may argue that economic development raises wages in the country of origin so the gains of migrating (i.e. difference in living standards between origin and destination) will be smaller and less people will be willing to migrate. However, this approach fails to take into account the magnitude of the gap between living standards in most African countries and Europe.

Consider the example by development economist Michael Clemens and take the perspective of a young worker in Niger who is earning $1,000 a year. He is motivated to migrate, since his expectation is to earn $15,000 a year in another place. Now imagine that, due to a spectacular development of the country, his salary doubles within a small period of time. Although he is now earning $2,000, he still has strong incentives to migrate, as there is still a $13,000 wage differential between origin and destination. Even a doubling of his income has not significantly reduced his motivation. The problem potential migrants have had so far is the lack of means. As described by Gonzalo Fanjul – Policy director of the Institute of Global Health of Barcelona (ISGlobal) – “the vast majority of Africans do not have the necessary financial and educational resources to migrate. As the continent’s educated middle-class continues to expand, the numbers of those aiming for richer countries will continue to soar”.

However, researchers pointing out this fact are not arguing that the EU should allocate less to African development, as these have a wide range of beneficial effects on their own. Rather, they want to stress that migratory flows are not going away and that EU policy should be designed accordingly. The attempts to prevent arrivals at European borders until now have been ineffective in discouraging new migrants and have only generated new and more dangerous routes controlled by smugglers.

Migration is here to stay but is that a problem? Most studies on the topic have found that migrants have small or no impact on wages of locals. With respect to the welfare state, it has also been shown that they contribute more than they cost. This is true even for those in an irregular situation: They do not have access to most government help, but still generate economic activity and contribute, for example, with sales taxes. Many countries could also benefit from migration because of their current demographic situation. With a rapidly aging population and falling fertility rates, countries can counter this tendency by incorporating migrants, who are usually younger and more fertile than the local population.

Darfurian refugees in eastern Chad. Photo: European Commission

Given these benefits, some international organizations are asking for inclusive and innovative policies to make the best out of migration. For example, the Overseas Development Institute (ODI), a prestigious think tank based in London, called for more investment in economic integration of migrants in a policy brief released last year. This would include language lessons and work skills training, which would increase their capacity to support themselves and fill job gaps in European economies. Facilitating cross-border mobility, migrants can more easily return to their countries of origin, which would reduce the number of people who are involuntarily staying in Europe but would like to go back to their countries.

Migration can also help cover shortages of workers in certain sectors. For example, many European countries will see a shortage of nurses in the near future, due to an aging population who will demand more health care and lower enrolment rates at nursing schools. One proposal is signing agreements in which countries in need of nurses help finance their education in developing countries, where many people are willing to undertake this job. As part of the agreement, some of these nurses would be offered jobs in Europe while the rest stay in their country of origin. In this situation both parts win: The origin countries have now a larger pool of educated nurses at zero cost, while Europe has covered its labor shortage, and at a lower cost than if the workers had been educated at the destination countries.

Migration is here to stay, and over time migrations flows are likely to increase rather than decrease.  Stricter border controls will only aggravate the human cost of crossing the Mediterranean, but will not prevent new arrivals. Thus, the EU would do well in recognizing the potential benefits of this situation to make the best out of it, rather than neglecting the uncomfortable truth of migration.

Javier Delgado Carbajo

Leave a Reply

Your email address will not be published. Required fields are marked *