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October 2009, Volume 16, Number 4

HDR 2009: Mobility = Human Development

The UNDP's Human Development Report 2009, released October, 5 2009, explored the potential for migration to expand people's choices and substantive freedoms. The theme of the report is that voluntary mobility generally increases human development by providing higher incomes and more opportunities to individuals who move, and can have positive spillover effects or externalities for migrant-sending and -receiving areas. Policy changes can enhance these effects for migrants as well as sending and destination areas.

Human Development Reports since 1990 have explored challenges ranging from poverty and democracy to globalization and climate change. HDR 2007/08 called climate change the greatest challenge facing humanity, and warned that failure to slow global warming could reverse human development, especially for the poor. HDR 2007/08 called for immediate efforts to reduce emissions that accelerate global warming via mitigation efforts, such as cap-and-trade systems to reduce carbon emissions, and assistance to help poorer countries adapt to climate change.

HDR 2009 offers a broad-brush review of migration, exploring the age of European migration to the Americas a century ago and current migration patterns. It concludes with six recommendations aimed at increasing human mobility and expanding human development.

First is opening more channels for low-skilled workers to find jobs outside their country, echoing the main message of the Global Commission on International Migration and the World Bank. These new regular channels include new seasonal worker programs that rotate workers in and out of the country and more European-style guest worker programs like those of the 1960s that allowed migrants to change employers after a period of employment and eventually to earn immigrant status.

Second is ensuring that migrants are afforded basic work-related rights, including equal pay and access to unions. Migrant-receiving countries are urged not to infringe on migrant rights during recessions; instead, they are urged to give laid-off migrants time to seek another employer before being required to depart. The third recommendation is to reduce transactions costs that range from the high cost of passports and visas to recruitment and remittance fees.

The fourth recommendation is to improve outcomes for migrants and their children in destination areas by providing integration assistance to the communities in which migrants live and ensuring that migrants and their children have the opportunity to learn the local language. Fifth is to reduce barriers to internal mobility? a third of countries restrict the access of internal migrants to local public services, as in China. Sixth is to recognize that migration can be a human development strategy for individuals and an economic development strategy for governments, but is not a substitute for development.

Given the potential gains from mobility for migrants, HDR 2009 urges opinion leaders to recognize that migration is inevitable and that its benefits can be enhanced by new and revised policies. Migrant-sending countries are urged to consider migration a natural part of development, and migrant-receiving countries are urged to develop transparent policies to open more doors to needed migrants. International cooperation should recognize the growing importance of migration to development, and the report concludes with an endorsement of free-movement areas.

Chapters. Chapter one explores how more mobility can foster human development by giving individuals more opportunities and freedoms. The OECD says that five million people move into industrial countries each year hoping to settle (including movement from one industrial country to another). Migration from lower to higher wage areas reduces economic differences between them, making migration self-stopping.

The chapter introduces two key concepts. Place premiums emphasize that individuals with the same capabilities have very different earnings and opportunities because of where they live. Agency, the ability of individuals and families to take actions to improve their lives, interacts with migration policies and structures to determine whether and where people move.

Chapter two examines internal and international migration patterns, noting that 3.5 times more people, an estimated 740 million, migrate internally than internationally. About 60 percent of the world's 200 million international migrants move within economic zones, from one industrial country to another or from one developing country to another; only 30 percent have moved from developing to industrial countries. But even if migrants stay in developing countries, then tend to move from poorer to richer areas.

About three percent of the world's 6.8 billion people are international migrants. The industrial countries, which have a seventh of the world's people, have 60 percent of the world's migrants; some leaders fear unmanageable waves of migrants from developing countries because of the persistence of income inequality--per capita incomes in the 33 industrial countries are about 20 times higher than in the 170-odd developing countries, and this income gap has not narrowed significantly despite rapid economic growth in countries such as China and India. Meanwhile, communications and transportation improvements make it easier for people to learn about opportunities abroad and move to take advantage of them.

Most industrial and developing countries have welcome-the-skilled and rotate-the-unskilled labor migration policies. About 80 percent of countries are fairly open to temporary highly skilled workers, but two-thirds of both industrial and developing countries are mostly closed to unskilled migrants seeking to settle.

There are far more restrictions on the entry of foreigners than the exit of citizens--only 12 nations, including North Korea and Eritrea, try to restrict exits of citizens. For example, Eritrea denies exit permission to children whose parents abroad did not pay the two percent tax on their foreign earnings levied by the Eritrean government, a policy that contravenes the Universal Declaration of Human Rights.

HDR 2009 contains a compact historical survey of migration that highlights the fact that some governments in the 19th century encouraged outmigration while others sought to attract newcomers to settle and bulk up their populations. Compared to the successful global effort to liberalize flows of goods and capital after WWII via policies and institutions that became the WTO, there has been much less liberalization of human mobility. No international organization promotes international labor migration, although the ILO aims to protect migrant workers with conventions and recommendations that call for them to be treated the same as local workers while employed abroad.

An overview of international migration during the 2008-09 recession emphasizes that new deployments fell and that some migrants lost their jobs. However, relatively few jobless migrants are returning to their countries of origin, in part because unemployment has also risen there. Demographic trends, including aging populations in industrial countries and a youth bulge in developing countries, prompts the prediction that migration will rise during recovery and beyond. Environmental trends such as global warming are also expected to increase migration. Chapter two ends with a discussion of the tug between restrictionist public opinion and the socio-economic benefits of migration.

Chapter three examines mobility's impacts on human development. It begins with the assertion that most migrants, internal and international, benefit from migration in the form of higher incomes, better health, and more opportunities for education. Surveys of migrants report that most are happy in the place to which they have moved, even if they have fewer civic rights and must learn a new language.

Both internal and international migrants raise their incomes by factors of three-to-six, although higher living costs mean that a migrant's standard of living may not rise in lockstep with income. More important, if migrants and their children are considered "members" of the country to which they move, they often begin at the bottom of the labor market, and may remain there if they lack the language and education skills needed to move up. Discrimination may also play a role in holding back newcomers.

Chapter four reviews the impacts of migration on source and destination areas. In many fast-growing developing countries, including China, household registration systems make internal migration analogous to international migration, marked by barriers to mobility. Local governments often restrict public services to local residents, excluding migrants from subsidized housing, education, and health services, reducing the opportunities for individuals to benefit from mobility.

Migrants seeking to get ahead by moving may be disadvantaged in the destination by a variety of factors. In some cases, they find jobs in sectors not covered by labor laws, as with workers employed in private homes. In other cases, migrants may have credentials that are not recognized in the destination country, as when those trained as doctors drive taxis because they cannot obtain medical licenses.

Most countries have social welfare systems to support low-income residents. The access of low-income non-citizens to social benefits varies, but the general rule is that the longer a foreigner is in a country, the more likely she is to earn or otherwise qualify for benefits. Some countries bar the entry of those likely to require public support (making exceptions for refugees), and some require residents sponsoring relatives for admission to show they have sufficient income to support the newcomers.

The children of migrants may benefit from their parents' mobility, especially if they move from poorer to richer areas. Most industrial countries require or allow all children? regardless of legal status? to enroll in K-12 schools, though some developing countries restrict public schools to native and legal migrant children or require the payment of fees. Migration can empower women who leave areas with traditional norms to find more freedom in cities at home or abroad.

Some migrants are worse off in the destination area. The most obvious examples are those who are trafficked, meaning that they are held against their will in a destination and often exploited sexually or for their labor.

Refugees are persons outside their country of citizenship who are recognized as facing persecution at home because of their race, religion, or similar factors. Most of the world's 10 million refugees at the end of 2008 remain near the country they fled, often living in camps until conditions at home improve. Far more people are displaced within the borders of the country in which they live; internally displaced persons rarely have the opportunity to begin anew in another country.

A review of the literature on the impacts of migrants on receiving country economies concludes that immigration has largely positive economic effects. Economists cannot find significant adverse effects on the wages and unemployment rates of similar local workers, perhaps because low-skill migrants tend to fill so-called 3-D jobs? dirty, dangerous, and difficult? that low-skill local workers shun or because similar native workers move away from areas with migrants.

Chapter five finds that more mobility would be beneficial and suggests ways to open more legal channels to unskilled workers and their families instead of reinforcing border controls. In the short term, the HDR emphasizes the importance of providing migrants with basic rights, reducing transactions costs for migrants seeking foreign jobs, improving outcomes for internal and international migrants, and considering mobility an integral component of development.

More countries have ratified the 1951 refugee convention than any other directly related to migrants, and many countries have ratified anti-trafficking conventions. However, fewer than 45 of 190 countries have ratified the 1990 UN Convention on Migrant Workers and their families, and even fewer have ratified the ILO's migrant conventions, 97 (1949) and 143 (1975). Industrial countries generally offer migrants more access to services and benefits than developing countries, and most countries offer more services and benefits to settlers than to temporary migrants.

The numbers versus rights hypothesis asserts that opening doors wider for temporary migrant workers from lower-wage countries is usually associated with granting them fewer rights that raise costs for employers, including equal wages and work-related benefits. Employers hire temporary migrant workers because they are cheaper than the alternatives, such as raising wages or automating. Governments may allow employers to recruit and employ migrant workers because they do not expect the migrants to settle and integrate.

A comparison of migrant stocks and migrant access to benefits does not find a trade-off between migrant numbers and migrant rights. The reason is that most foreign-born residents are immigrants and naturalized citizens, not low-skilled temporary workers. It would be extremely short-sighted for governments to deny settlers and intending citizens the benefits and services needed to integrate successfully, and most do not. For example, Sweden, a country that ranks high on immigrant-integration indices has very few temporary workers from low-income countries. The Gulf oil-exporting countries that rank low on integration indexes have mostly low-wage temporary workers from lower-wage countries.

A trend of concern to many migrant rights advocates is the increase in temporary workers in traditional countries of immigration. In Australia, Canada, and the US, newcomers have mostly been immigrants free to change jobs and become naturalized citizens. In the past decade, these countries have sharply increased the number of newcomer migrant workers tied to a particular employer, a restriction on rights that may prompt some employers to prefer migrant to local workers. In Canada in 2008, more temporary workers and foreign students (who can work) were admitted, 272,520, than were immigrants, 247,202.

Migrant rights are extended or denied by governments in destination countries. Governments in migrant-sending countries face often difficult decisions over whether to facilitate or allow migration to places that offer wages that are higher than at home, but that restrict the rights of their nationals employed there. The Filipino government, for example, has periodically banned the deployment of citizens to countries where Filipino worker rights were restricted or violated, sometimes prompting protests from workers who are seeking higher wages abroad.

Assuming that fully informed migrants have agency, HDR 2009 recommends that sending country governments allow workers to go abroad if they understand that, although they are likely to earn higher wages, they may be unable to form or join unions to press for higher wages.

Perspective. The headline message of HDR 2009 is that richer countries should open more channels for high- and low-skill migrants. After recovery from the 2008-09 recession, employers are likely to request more migrants, and HDR 2009 urges governments to welcome migrants and adopt policies to ensure that migrants are protected and integrated and that remittances and returns promote development in migrant-sending countries.

HDR 2009 emphasizes that simply opening doors to migrants does not guarantee protection or development; complementary policies are needed to ensure that migration promotes human development. For example, countries accepting doctors and nurses could subsidize training in origin countries that may not be easily portable to compensate for the brain drain, as for paramedics. HDR 2009 is clear that, when migrants abroad perceive opportunities at home, diasporas will return without assistance, as in Asia.

HDR 2009 proposes an alternative to traditional guest worker programs, that is, programs that add migrants temporarily to the labor force to fill specific vacant jobs. Most governments require such migrants to leave after a period of employment because they do not want the subset of employers who hire guest workers to select immigrants and future citizens. Tying migrants to employers and not offering a path to permanent settlement can leave migrants vulnerable to abuse.

HDR 2009 proposes three major changes to low-skill guest worker programs-- the right of migrants to change employers, introduction of so-called pathways to permanence, and a right of migrants to make return visits home during their two-or-three year work stints abroad.

Two experiments that satisfy some of these criteria are Sweden's December 2008 changes to migrant worker policy and New Zealand's Recognized Seasonal Employers (RSE) scheme to admit Pacific Island workers to fill seasonal farm jobs (www.dol.govt.nz/initiatives/strategy/rse/index.asp).

Swedish employers can elect to hire non-EU foreign workers without obtaining certification that Swedes, settled foreigners, and EU nationals are not available, provided they have advertised the job vacancy in Sweden at wages and conditions equal to those in collective bargaining agreements or at prevailing wages if there are no such agreements. Non-EU migrants receive renewable two-year work permits, may change employers after one renewal, and apply for immigrant status after four years. Non-EU migrants who are laid off during their first four years in Sweden have three months to find another job before being required to depart. Unions expressed concern that migrants will be vulnerable, especially because responsibility for checking on employers was shifted from the Employment Service to the Migration Board (www.eurofound.europa.eu/eiro/2008/04/articles/se0804039i.htm).

New Zealand employers must try and fail to recruit local workers before being certified to recruit guest workers from the Pacific Islands. These guest workers must be offered at least 240 hours of work at 30 hours a week and provided with housing and health insurance, and can remain in New Zealand up to seven months, or nine months from Kiribati and Tuvalu because of higher travel costs. In Tonga and other sending countries, workers are nominated to participate by village elders and, if a worker does not return at the end of the contract, that village is blacklisted and unable to send workers in the future.

In September 2008, the New Zealand government announced that migrants would be able to change employers while in New Zealand. A survey found that migrants averaged 17 weeks of work in New Zealand and had average net earnings of NZ$5,700 after paying for half the airfare and their living expenses in New Zealand. Employers say that, because most migrants do not have experience picking fruit and harvesting wine grapes, they must invest in training and that 80 percent of the migrants must return year-after-year to justify these training expenses.