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Managing Labor Migration in the 21st Century
Philip [email protected]
http://migration.ucdavis.eduUN, July 7, 2005
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3 Themes
• Migration low, pressures rising. Policy response--adjust migrant rights
• Managing migrants at the top and bottom of the job ladder
• Recruiters: the glue in the international labor market?
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Caveats
• “Man [woman] is the most difficult luggage to move over borders.” Adam Smith
• Unanticipated consequences of migration policies
• The perfect is the enemy of the good.
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Why so little migration?
•Inertia: most people stay near family and friends•Governments regulate entries and stays
• Economic development and convergence reduce incentives to migrate
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Why so much migration?
•Demographic differences: Europe vs Africa global population shares, 1800, 2000, 2050
•Economic differences:Average per capita, $5,000: range, $100 to $40,000
•Other differences, networks, and 3 revolutions
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Shares of Global Population, Africa and Europe, 1800, 2000, 2050
0
5
10
15
20
25
1800 2000 2050
AfricaEurope
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Ratio of Per Capita GDPs, High to Low and High to Middle income counries, 1975-2000
0
10
20
30
40
50
60
70
1975 1985 1990 1995 2000
High-lowHigh-middle
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Other and 3 Revolutions
•More countries: 43 in 1900, 191 in 2000, and migration to get the “right people” inside the “right borders”
•Revolutions in communications, transportation, and rights
• Policy: Manage migration by adjusting rights
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Professional Migrants
• Educational selectivity and cumulative loss
• Advantages to receiving countries:
• Fill vacant jobs that require training quickly
• Reduce wage-inflation pressures• Increase productivity on diverse teams
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Dealing with Professional Migrants
• Keep in touch with Diaspora
• Human capital replenishment funds
• Permit private financing of education in countries sending professionals abroad
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Other Guest Workers
•From 1960s macro to 1990s micro programs•Recruitment stops and irregular migration amidst high unemployment•“Labor shortages” in particular sectors and areas
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Why not let wages rise?
• Help industries to adjust to new global competition
• Jobs are seasonal or in remote areas • Increase productivity of
complementary local workers, e.g. second shift and new equipment in meatpacking
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Distortion and Dependence
• Distortion: employers learn rules and depend on migrants
• Dependence: migrants, their families and regions depend on foreign jobs and remittances
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Add Economic Incentives
• Give migrants unique tax numbers:• Refund migrant payroll taxes to
encourage returns and provide savings that can be matched for investment
• Use employer payroll taxes to help the industry adjust to fewer migrants
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Keys to success
• Cooperation between sending and receiving countries to promote adherence to program rules
• Partnerships between government and employers to plan adjustments, as with processing tomato industry
• Minimize irregular migration and eventual earned legalization
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Recruiters: labor market glue
• Job Matching: from direct employer recruitment and public employment service to networks and fee-charging recruiters
• Tendency: employers pay recruitment costs for professionals, other migrants pay recruitment costs
• Issue: how to reduce recruitment costs
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Reducing recruitment costs
• Educate migrants on recruitment services and allowable fees (usual 1month’s wage)
• Regulate recruiters directly with licenses and bonds; joint liabiliy?
• Encourage competition to increase options and lower costs--encourage multinationals like Manpower to participate
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Managing Labor Migration
• Issue: make guest worker programs work closer to goals and thus keep doors open to migrant workers
• No magic bullet or one-size-fits-all guest worker program
• Economic incentives can reinforce program rules
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