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OECD: migration down 50% in 2020
November 20, 2020
The OECD’s annual migration report emphasized that immigration and temporary migration fell sharply in 2020. Both immigration and temporary labor flows are expected to fall by half in 2020 for two reasons. First, the economic recession means that employers are sponsoring fewer foreign workers for immigrant and temporary work visas. Second, governments closed visa-processing facilities and borders to prevent the spread of covid, making it hard to complete the paperwork required for immigration and temporary work abroad.
Governments opened otherwise closed borders for some migrant workers, especially health care and farm workers. The demand for migrant health care workers is rising due to population aging and wages that are sometimes held down in order to avoid raising the taxes that pay the wages of caregivers for children and the elderly. Specialized farms that produce labor-intensive commodities prefer just-in-time guest workers to just-in-case local workers, who may not show up as promised or perform farm work only until they find better nonfarm jobs.
There were 5.3 million immigrants admitted to the OECD countries in 2019, including a quarter to the US. The OECD countries had over 135 million foreign-born residents in 2019, making international migrants over 10 percent of OECD residents.
Immigration to OECD countries rose from 4 million in 2009 to over 5 million in 2019
OECD countries admitted over five million temporary foreign workers in 2018, including 1.1 million in Poland, which sends seasonal workers to Western European countries and admits Ukrainians and citizens of other ex-USSR countries to fill seasonal jobs in Poland.
Ukrainian apple pickers in Poland; Polish asparagus sorters in Germany
Poland, the US, and Germany accounted for half of the temporary foreign workers in 2018
Most migrant workers are low skilled. The greatest gap between the share of migrant- and native-workers in particular occupations is in domestic work (activities of households as employers). Hospitality (accommodation and food services), support services to business such as janitors, and construction also have higher shares of migrant- than native-workers. The migrant share of farm workers is higher the US but not in Europe, which has more small family farms.
Migrants are underrepresented in European agriculture compared to native workers, and overrepresented in US agriculture
The covid pandemic demonstrates that governments can close borders, make exceptions to admit migrant workers, and support migrant workers and families adversely affected by lockdowns. Employers who might have persuaded governments to admit more high-skilled IT or tourism sector guest workers in normal years could not in 2020.
Integration. Many foreign-born workers in industrial countries lost their jobs during pandemic lockdowns, pushing unemployment rates for foreign-born workers higher than unemployment rates for native-born workers. Migrants are more likely to hold essential jobs that require personal interactions, making it harder for them to avoid contact with people who may have and transmit covid. Once infected, migrants can spread covid to family members in often crowded housing.
Especially in southern Europe, relatively few migrants can work from home
Before the pandemic, employment rates for foreign-born workers were often higher than for native workers because of the migrants’ youthful age structure and their desire for higher wages abroad. Employment fell for foreign- and native-born workers in most OECD countries between the second quarter of 2019 and 2020, but fell more for foreign-born workers. There were especially large foreign-native gaps in the employment decreases experienced in Spain, Ireland, Portugal, Austria, and Italy.
Employment rates for migrants fell more than for native-born workers in southern Europe
Covid may mark a change in the trajectory of ever more labor mobility. As governments and firms reorient their supply chains from just in time to just in case, investors may become more cautious about making investments that assume just-in-time guest workers will be available, as with apple orchards that are planted in remote areas and become unprofitable if labor costs rise. Remote working arrangements may mark a new era of more trade in medical and other services via the internet rather than labor mobility to provide services in-person.
Before covid, migrants were overrepresented in some of the sectors where employment is growing and labor productivity is low, such as hospitality. One perennial migration question is the proper role of industrial policy or employer voices in migration policy decisions. If employers in a particular sector have labor shortages, should governments respond by admitting migrants to fill particular jobs, or is it better to admit migrants based on their human capital, such as youth, education, and language ability, and allow them to find jobs anywhere?
The US follows an employer-led or demand approach, with employers sponsoring named foreigners to fill particular jobs. Australia and Canada follow a human-capital or supply approach, giving priority to foreigners with more education and other traits that promise successful integration. Demand and supply approaches converge if policy makes it easiest for employers to sponsor college-educated migrants or if foreigners receive extra points for having a job offer.
Most OECD countries have sector-specific policies to manage their agricultural and health care systems, but not always sector-specific migration policies. Agriculture is an exception, since at least 15 OECD countries have programs to admit seasonal foreign farm workers. The usual procedure requires employers to try and fail to recruit local workers before being certified to hire migrants.
Procedures to recruit migrant workers vary. Employers make the decision on whom to hire, but some migrant-sending governments maintain work-ready pools to expedite employer recruitment. Migrants usually have contracts that tie them to one employer while abroad, and farm workers must usually depart after up to 10 months abroad, although Israel and Japan allow migrant farm workers to remain three to five years.
Agriculture, covered on pp144-48 in the OECD migration report, provides examples of how governments make four key labor migration policy decisions: labor market tests, recruitment, employment, and dependence.
First, what must employers do to be certified to recruit migrant workers, that is, what labor-market testing is required to ensure that local workers are not available? Second, how do employers recruit migrants abroad, and what laws apply, that is, may employers recruit only men? Who pays recruitment costs?
Third, who enforces the contracts that tie migrants to employers, and what happens to migrants who complain about their employer and are fired? Are dis-satisfied or fired migrants allowed to change employers, or must they leave the country? Fourth, should governments worry if dependence on migrants increases over time? If yes, what is the optimal strategy to reduce dependence, quotas, levies or some combination? Finally, do the remittances and returns from seasonal migration speed development in migrant areas of origin?
These certification, recruitment, enforcement, and dependence questions are contentious, especially because seasonal farm worker programs often have unanticipated effects. The 1942-64 US Bracero programs admitted over five million Mexican farm workers (some returned year after year; perhaps 1.5 million Mexicans participated) and set the stage for the movement of 10 percent of people born in Mexico to the US between the 1980s and 2010. The current H-2A agricultural guest worker program admits 200,000 Mexicans a year, and certification, recruitment, and enforcement decisions are litigated routinely.
When countries tailor migration policies to specific sectors, should they require employers who hire migrant workers to also develop plans to reduce dependence on migrants over time? A US policy that gave inner-city hospitals easy access to foreign nurses around 2000 required the hospitals to develop plans to reduce their dependence on foreign nurses over time, but was soon ended when it became clear that nursing-autarky plans were developed by consultants and not implemented by hospitals. New Zealand is launching a similar program in 2021 that allows industries seeking foreign workers to negotiate agreements with the government that expedites migrant admissions in exchange for plans to employ more native workers over time.
Inertia is a powerful force. A quick return to normal with a vaccine may also return labor mobility patterns to their pre-covid trajectories. However, a slow return to pre-covid economic conditions may break some migration patterns and the networks that link employers in one country to workers in another. Future migration reports may emphasize the 2020 covid breakpoint in a manner similar to the 1989 fall of the Berlin Wall or the September 11 terrorist attacks that mark before and after points in foreign or security policy.
The OECD report includes a complex appendix table that reports the share of foreign-born workers in various sectors. The number 1 indicates a sector with a high share of migrants and 39 a sector with a low share of migrants. In most OECD countries, domestic work has the highest share of migrant workers, half or more, followed by food and beverage services, accommodation, and services to buildings (security and janitors). The lowest shares of migrants are in education, public administration, and other sectors where citizenship is sometimes required. Agriculture’s share of migrants is very uneven across OECD countries.
Domestic work is the sector with the highest share of migrant workers, 2016-18
Another appendix table includes inflows of foreigners by country between 2008 and 2018. The OECD notes that the data are not necessarily comparable across countries. The inflow data for traditional immigration countries such as Australia, Canada, and the US include foreigners admitted as immigrants, meaning they have the right to work in any job that does not require citizenship and apply to naturalize after three to five years. The inflow data for many European countries include foreigners admitted for more than 90 days, including foreign students and guest workers who may not become immigrants.
Inflows of foreigners rose in many countries between 2008 and 2018, especially in Germany
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