group 12 - iebd migration

8/2/2019 Group 12 - IEBD Migration

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As always on this boulevard, the faces

were young, coming annually in anendless migration from every country,

every continent, to alight here once in

the long journey oftheir lives

Brian Moore

Group 12:

MIGRATION

Free flows of people?

Kornowski Jan

Pallastrelli Chiara

Peresson Nicol

Salvucci Ilaria

Smolina Anastasia


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1. FREE FLOWS OF GOODS, CAPITALS, SERVICES AND PEOPLE

The free flow of capitals, goods, services and people across national borders is a

commonly established dogma of the modern Era. It has been a basic principle of many

Treaties and Agreements and several theories have been formulated: one of the most

important is the Flow idealism, whose vision is based on the principles of economic

freedom, voluntary exchange and individual initiative, combined with social and

environmental consciousness. The goals are several: Peace (meaning the ongoing

expansion of non-violent, mutually consenting relationships among human beings),

potentially established thanks to limited constitutional Governments (founded on the

rule of law) free and open democratic elections and the free flow of goods, services,

people, capital, and information across borders; Prosperitiy, since entrepreneurial

activities (natural consequence of the free flows) would help billions of poor people

thanks to the elimination of professional licensure and other constraints on

occupational freedom that nowadays increase their cost of living and reduce their

choice of education, health care and housing, and Happiness. When people are

engaged in productive and challenging activity in the context of a meaningful and

positive community, they are more likely to be happy; as people move up Maslows

hierarchy (see picture on the right), and

as individuals develop their personal

commitments based on love ratherthan fear, global happiness could be a

reality rather than a dream.

So, opening borders would allow

billions of individuals to sell their

services on an open market more

easily. By participation in a global

market these people would begin

creating significantly more value than

they create at present, which would provide immediate benefits to their locales. They

could also create a market in human capital development as people around the world

discover which capacities lead to a significant increases income, and finally, they would

create a bottom-up initiative (rather than the actual top-down process) that supports

stable government, a fundamental success factor for global peace. But what has

emerged, especially in the last decades, is the fact that while free flows of goods,

capitals and services seem to be whished and well accepted all over the word, it

appears not be the same with people.


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The question follows: are, in fact, individuals completely free to move all over the

World? And if not, why?

2.MIGRATION

2.1 Definition and types

Migration is considered one of the defining global issues of the modern times, a very

complex phenomenon that has an incredible socio-economical potential but that

nowadays, being very badly managed, seems to bring more troubles than actual

benefits. In fact, there is not a worldly recognized definition of Migration, at least

accordingly to the IOM (International Organization for Migration), the principal

intergovernmental organization in this field in the whole World.The UN provides us a definition, referring to migrant as an individual who has

resided in a foreign country for more than one year irrespective of the causes,

voluntary or involuntary, and the means, regular or irregular, used to migrate, while

the common usage would include in the definition certain kinds of shorter-term

migrants, such as seasonal farm-workers who travel for short periods to work planting

or harvesting farm products. Migration is an ambiguous concept as well, since we can

count different types: the first distinction is between internal and external. The first

one is domestic, meant as within the National borders, while the second is the

international migration; about that, we are going to focus our attention on the South-North parts of the World movement, since its the most significant nowadays and its

still increasing exponentially, as we can see from the graph below:

The second distinction is between permanent and temporary migration; in the first

case the individual moves to the destination Country for the rest of his/her life, while

in the second just for a defined period of time. The final distinction involves law and

Figure 1: Migration shares Worldwide

Source: United Nations (2006),

Trends in Total Migrant Stock 1960-2000,

Department of Economic & Social Affairs


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regulations, since its the legal and illegal migration trade-off. We all know the

definition of illegal migrant (an alien or non-citizen who has entered a Country

without government permission or stayed beyond the termination date of a visa), but

we should probably spend few words on refugees. According to the definition, a

refugee is any person who owing to a well founded fear of being persecuted for

reasons of race, religion, nationality, membership of a particular social group or

political opinion, is outside the country of his/her nationality and is unable, or owing to

such fear, is unwilling to avail himself/herself of the protection of that country: as a

matter of fact, the refugee isnt considered as an illegal migrant.

2.2 History

The history of migration began with the human history. At the beginning very fewrestrictions limited the phenomenon; in fact, migrant just needed to be able to afford

a ticket and survive a very basic health check on the arrival to the destination Country.

The very first population that had to face restrictions were Asians, since in the 1850s in

the Australian colonies laws began to be passed to keep out Asians (the so called

White Australia policy) and in the 1880s, Canada and the United States followed suit,

effectively closing the door on Asian migrants.

But its especially in the 1920s and 1930s that sharp restrictions were set on voluntary

migration across much of the world; the reasons were several, such as xenophobia,

economic recession and the labor shortage, all consequences of World War I.

The situation changed after the Second World conflict: the emergence of guest

worker (Gastarbeiter) in Western Europe started a period of de-regulamentation,

thanks to which Countries (especially Germany) thought they could hire mainly young

men to work for short periods with no expectation of winning rights as citizens or

being allowed to bring in families, but things didnt go that way since, as Max Frisch

stated, We wanted workers, we got people. Permanent migration had just re-begun.

As workers ties with their home countries loosened, their economic roots in Germany

deepened, although with consistent problems of social integration and acceptance.

At the same time, many of the former European colonial powers saw arrivals from

their former Empires Indians, Pakistanis and West Indians to Britain; Moroccans,

Tunisians and Senegalese to France; Surinamese and Indonesians to the Netherlands.

Things changed again in the early 70s, with the global economic turndown triggered by

the 1973 oil crisis: it was the end of the mass recruitment of guest workers in Europe.

In the 1980s and 1990s the drivers of immigration changed: the economic factors

became less important, while others such as family reunification and political

persecution increased in relevance.


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Thanks to the European Union, the expansion of migration became easier (one of the

basic principle of the EU was the free mobility of people within the borders), but still

not exponential; we had to wait the collapse of Iron Curtain in 1989 and the

incorporation of the former Soviet-bloc Countries (like Lithuania, Poland and Hungary)

to have a new important wave of migration (east => west).

Finally, in the 1990s the meaning of the phenomenon changed: the migrantwas not

perceived as a low-skilled worker/person anymore; countries start understanding the

possibility of leveraging on foreign professionals in order to boost their own

economies: thats why US, Australia and Canada introduced point-systems policies in

order let people enter in their territories.

2.3 Nowadays situationMigration is now considered one of the most important and characterizing issue of the

early twenty-first century. Three percent of the worlds population is living outside

their country of origin, corresponding to about 192 million people.

Between 1965 and 1990, migration registered an annual growth rate of about 2.1%,

while the current annual growth rate has increased, reaching the 2.9 %, in fact

especially migration towards more developed regions has increased sharply in the past

20 years. This graph shows us the amount of international migrants as a percentage of

world population. ("more developed regions" comprise all regions of Europe plus

Northern America, Australia, New Zealand and Japan).

Migration includes several and complex dimensions; for example, labor migration,

family reunification, decreasing irregular migration, and is becoming more and more

an essential component of the economic and social life of every State. The belief is that

Figure 2: Trends in total

migrant stock

Source: U.N. (2008),

International migrant stock


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a well-managed migration could be actually positive both for the individuals and for

the society in general. To be properly managed, policy makers and practitioners need

to understand the phenomenon of migration in all its dimensions, to develop a

comprehensive and cooperative approach needed in a century where the migration

pressure is heavy. Lets see how two of the most important destination Countries,

United States of America and European Union, currently deal with this issue, with

special attention to immigration phenomenon.

2.4 Current policies

2.4.1 European Union

The free movement of persons is a fundamental right guaranteed to European Union(EU) citizens by the Treaties; in fact, it has been a basic principle of the EU since the

sign of Treaty of Rome in 1957. It is implemented through the area of freedom,

security and justice without internal borders. The concept of free movement of

persons strongly came about with the signing of the Schengen Agreement in 1985 and

the subsequent Schengen Convention in 1990, which initiated the abolition of border

controls between participating countries. Being part of the EU legal and institutional

framework, Schengen cooperation has gradually been extended to include most EU

Member States as well as some non-EU countries. In 2004 new directives were set by

the European Parliament: these new measures were designed, among other things, toencourage Union citizens to exercise even more effectively their right to move and

reside freely within Member States, to cut back administrative formalities to the bare

essentials, to provide a better definition of the status of family members, to limit the

scope for refusing entry or terminating the right of residence and to introduce a new

right of permanent residence. For the non-EU residents a new tool was been

introduced in 2009: the Blue Card (Blue European Labor Card). Its an approved EU-

wide work permit (Council Directive 2009/50/EC)allowing high-skilled non-EU citizens

to work and live in any country within the European Union (excluding Denmark, Ireland

and the United Kingdom). Thanks to this tool it is possible for non-EU citizens to apply

for a two-years valid work permit (renewable thereafter) with a one-track procedure.

The requisites are several: the candidate has to possess a college diploma or have

completed five years occupational training, enjoy a job contract or a job offer, and the

gross income has to be at least 50 percent above the national average, but the card

gives a non-underestimated series of rights, such as favourable family unification rules.

Once again, the legal basis for this proposal is Article 63(3)(a) and (4) of the Treaty of

Rome, which states that the Council shall adapt measures on immigration policy


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concerning conditions of entry and residence and standards on procedures for the

issue by Member States.

2.4.2 United States of America

The situation is completely different for the United States of America. Immigration has

been a major source of population growth and cultural change throughout much of the

history of the US. The economic, social, and political aspects of immigration have

caused controversy regarding ethnicity, economic benefits, jobs for non-immigrants,

settlement patterns, impact on upward social mobility, crime, and voting behavior. As

of 2006, the United States accepts more legal immigrants as permanent residents than

all other countries in the world combined. The cheap airline travel post-1960

facilitated travel to the United States, but migration remains difficult, expensive, and

dangerous for those who cross the United StatesMexico border illegally (even though

non-legal immigration wont be considered in this paper).

Of course, within the borders of the federal territory, US citizens are free to live, move,

reside and work, but for foreigners a formal authorization from the Central

Government is needed. Its the case of the Green Card (10 years validity): it serves as

proof that its holder, a Lawful Permanent Resident (LPR), has been officially granted

immigration benefits, which include permission to reside and take employment in the

USA. The application process is very complex; we will just say that, in order to have an

employment-based VISA a sponsor is needed: the employer must legally prove that it

has a need to hire an alien for a specific position and that there is no minimally

qualified U.S. citizen or LPR available to fill that position, hence the reason for hiring

the alien. Some of the requirements to prove this situation include: proof of

advertising for the specific position, skill requirements particular to the job and

verification of the prevailing wage for a position and the employer's ability to pay. Still,

benefits are substantial, such as the ability to leave/enter the US at will without the

risk of being denied entry by the Immigration Office, the right to apply for

government-sponsored financial aid for education, the permission to start own

business and create own corporation, the possibility to sponsor spouse and unmarried

children under 21 to obtain permanent status and, finally, the eligibility to apply for

U.S citizenship later. Thats the main difference with temporary admission: of course

its possible for foreigners to work on the US ground for short periods (once again with

the permission of the Government of the United States), but theyre not eligible for

citizenship through naturalization.


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3. The 4 players of migration

But to get back on our initial question: why migration is not free and which are the

possible effects of a liberalization of flows of people? In order to give a consistent

answer to such a complex question well start analyzing the four players involved in

migration: World in general, the Migrants, the Source countries and the respective

Arrival countries.

3.1 World

"If international policy makers were really interested in maximizing worldwide

efficiency, they would all be busy at liberalizing immigration restrictions

This quote from Dani Rodrik perfectly summarizes our point: in fact, liberalization in

the labor market can bring huge benefits to the world, starting from an increase in the

world GDP. Early estimates came to an astonishing conclusion that eliminating all

barriers to migration could as much as double world GDP; however, more recent

studies produced more realistic and modest estimates (10% increase). A better

allocation of resources and productivity is the reason why we have this kind of

increase: in fact we have a reduction of scarcity in labor markets (making up for holes

in the country labor demand), a substantial resolution of the demographic deficit,

(simply allowing young immigrants to enter in more ageing countries) and finally a

significant spread of knowledge, since trained migrants can actually export skills and

capacities in every Country they serve.

3.2 Migrants

The second player were going to analyze are migrants, but in order to do so we are

going to categorize the effects of labor liberalization in social and economic reasons.

As far as social reasons are concerned, most of times there are integration problems

driven by very low social acceptance; furthermore, by virtue of their migrant status,they are even systematically underrepresented in the host country political

environment. But if we analyze the phenomenon from an economic point of view well

see that the benefits are numerous; first of all, wage increases (the pay in arrival

Country X is generally much superior than the pay for the same job in source Country

Y), then a theoretical improvement of living standards such as health, education and

welfare institutions due to the fact that destination Countries often belong to the

Developed World (even if this seems not to empirically happen) and finally the gain of


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specialization in labor; in fact, most of times migrants are trained by hiring companies,

thanks to whom they acquire specific skills and capabilities.

So, as Von Weiszacker said "Most of gains accrues to immigrants themselves" and that

appears to be true, even thought social implication shouldnt be forgotten.

3.3 Source Countries

A third player affected by labor movements is the source country. Here, an important

factor is remittances, transfers of money by a foreign worker to his home country.

There are about 440 billion $ of remittances worldwide, and they definitely contribute

in a large part to economic growth and GDP of source Countries. A peculiar example is

Tajikistan (red dot in the picture below); the money Tajikistan people earn in Russia

and send back home equals to 40% of domestic GDP, (3 bil $ of inflows)

Still, there are negatives aspects not to underestimate: first of all, GDP in source

Countries tends to go down in any case, since income of those who emigrate is no

longer be counted towards the GDP of the source country. Moreover, there is the big

brain drain problem. The term indicates the emigration of a large group of individuals

with high-level technical skills or knowledge, and the reasons can include both social

aspects (such as lack of opportunities, political instability or economic depression in

source Countries) and individual reasons (like overseas relatives and personal

motivations to continue with the career in a different State).


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Brain drain, as we can see from the picture above, is very common amongst

developing countries such as the ones in Africa, the Caribbean and East Asia, but

Europe is also largely affected: there is, in fact, a large outflow of graduated from

Western Europe mostly to the US and also an internal migration of skilled workers

from Eastern to Western Europe. To conclude, the sort of static growth in which

source Countries are left by brain drain makes us state that we have mainly drawbacks

for this player; however, remittances allow relatives of the emigrant to live a much

higher standard of living.

3.4 Arrival Countries

Also for the receiving countries there are different benefits and drawbacks. Regarding

the benefits, the main economic one is represented by the fact that migration actually

leads to an increase in the amount of labour force in the labour market. The first

consequence of this increase is the raise of the GDP in the host country, simply

because there are additional workers also earning an income. However, form the host-

country perspective is important to understand if the influx of immigrants harm or

help the native population. To evaluate these labour market effects of immigration is

crucial to analyse the relative skill composition of foreign and native labour. In general,

when the migrants are substitutes to the native population, the native workers will seetheir wages decrease. Indeed, given a fixed labour demand, an increase in the supply in

the labour market of workers with the same market profile, actually leads to a

reduction in the earnings. On the other hand, if the migrants are complements to the

native population, it can be easily seen an increase in the natives productiv ity and as a

consequences in their wages. Even considering the negative impact of the substitutes

migrants, the impact of immigration on average incomes in the native population

tends to be somehow positive (J. Von Weiszacker, 2008), since this negative effect is

Source: OECD, Migration and the Brain Drain Phenomenon


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really small; Borjas (2003) estimated a decrease for the natives wages with the same

profile of the migrants of just 0,3% as a consequence of a 1% migrants influx.

Further considering other pessimistic assumption (i.e. assuming to ignore all theincome gain for the native population that do not compete with migrants), an increase

in the workforce of 1%, thanks to migrants, still leads to a positive GDP growth. To

notice is that the GDP considered during the analysis is the sum of all the income. The

reason why the GDP per capita is not used is that this indicator could be misleading. In

the host country, indeed, the migrant is a below-average earner and so the host

county GDP per capita will decrease even if the income of native remain unchanged.

The second consequence of the increase in the labour force is an increase in efficiency.

This will happen only if migrants are complementing the native and increasing the skillpool thanks to a better allocation of the resources. However in general the receiving

country can have an increase of the labour market efficiency also thanks to migrants

able to compensate the low mobility of natives. They are, actually, very responsive to

regional differences in economic opportunities; the fixed cost to move, for them, does

not change much depending on the exact country of the EU where they settle. In

particular in Europe, where the internal mobility is quite low, external migration will

bring benefits to the currency area allowing a better absorption of the asymmetric

shocks between different regions. To sum up, there is a net gain from immigration

for the host country, but the benefits are not distributed evenly across the nativepopulation (N. Diez Guardia and K. Pichelmann, 2006), due to the

complements/substitutes argument presented before.

Migration has other main benefits for the receiving country. First of all, immigrants

allow a demographic development. Foreign workers, in fact, contribute in the payment

of natives pensions; this is almost a need in country where the age distribution is

more and more shifting to an older population. Europe, with the problem of a rapidly

ageing population, should in fact try to address its demographic crisis to attract more

migrants; on the other side, however, there is an increase in the expenses for thewelfare, the education and other social spending, for the host country. Moreover, the

establishment of dynamic sectorial cluster is often easier in an environment open to

migration. To give an example, Silicon Valley would not be the same without the

important contribution of the immigrants.

Last but not least, migration helps the receiving countries in solving the labour

shortage problem. In the host- country there are some jobs that are low paid, too

difficult or with seasonal fluctuations, not even considered by the native workforce;


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migrants can in this case easily fill these positions. To give an example, in the 1960s

and 1970s in Germany, migrants from Southern Europe worked as guest-workers in

German factories to solve the problem of labour shortage and contributed their part to

the economic miracle. On the other hand, migration of high skilled worker that bring

in the country scientific, technical and innovative skills, enables the creation of new

industry and provides the solution to the talent shortage; a very important issue in

many host countries.

Moving on the drawbacks of the migration for the receiving countries, the first things

to mention is that the biggest slice of gains accrues to migrants, with the capital

owners as other winners from migration, as can be seen from the graph below. The

line GKD is the initial supply of labour and the line HE is the supply of labour with

immigration. While lowering the wages in the country, immigration increases the

overall welfare (DEGH) and also natives gain (DKE), but due to the loss of income for

factors that substitute for immigrants, this gain rather accrues to factors

complementary to immigrants, like capital.

Figure 3: Net effects ofmigration

Source: J. von Weizscker

(2008)

On the other hand, the net effect on the native population, as argued before, is

ambiguous, but in general positive. This is because: The native winners of

immigration might be able to compensate the native losers. However, in practice, this

distribution might not take place (J. von Weizscker). This distributional problem

could be one of the principal economic reasons why the population is critical about

migration. This leads us to the other drawback, meaning the decrease in wages for

natives; true only if migrants are substitutes. However, also in this case, the negative

impact is really small, as shown before. When evaluating the impact in the natives

wage considering the division of the migrants in high skill and low skill workers, the

basic assumption is that low-skilled immigration increases income inequality among


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the native workers, because the low-skilled natives, with an already below-average

wage, experience additional pressure. However, a study by Ottaviano and Peri (2006),

(under the assumption that foreign and native workers are not considered perfect

substitute even within the same age and skill bracket), found out that only a small part

of low-skilled natives experience a negative impact; the majority of native benefits

substantially. Speaking in more general terms, studies found out the existence of a

modest relation between migration and natives wages or employment in the labor

market, whit different and various explanations.

Another explanation for the criticism in migration behaves in the host country is the

fact that migrants are seen as a burden for the welfare state. Indeed, they actually

cause additional expenses regarding the social assistance system, education and health

care system, but also more cost for unemployment. It is believed then that all these

cost are not matched by additional tax payment. However, there are no empirical

evidences for the phenomenon..it is more a public opinion and a media concern than a

fact. Finally, the native population sees migrants as a threat because they can probably

cause a negative effect on the social cohesion as well as in the political and social

foundations, resulting in a decrease of the institutions quality.

To sum up, is not easy to say if the host country benefits or not from the migration, but

is also true that all the aspects should be deeply analyzed in their pros and cons. As we

have seen many of the aspects considered as drawbacks, are actually not empiricallydemonstrated or with outcomes different from the ones forecasted (i.e. the impact on

the native wages is positive, even if there is a decrease in the low-skilled native

workforce wages).

4. Tensions among the players

All the different interests of all the 4 players lead us to identify some tensions, that

need to be addressed in order to achieve the desired level of free flow of people. First of all, there is a tension between the WORLD in general and the single

COUNTRIES. On one side, the world GDP increases and the efficiency raises thanks

to the migration flow. On the other side, however, some countries could loose

from migration with all the drawbacks shown for both receiving and source

countries.

The second important tension is between RECEIVING and SOURCE countries. Onone hand, receiving countries want to attract the best people to work in their


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economies (mostly high-skilled workers). On the other hand, in source countries

this leads to a brain drain that damages heavily the economies.

The next issue caused by migration is the diverse interests of the differentRECEIVING countries. Every country wants to attract high-skilled workers,

competing for them on the global labor market. In order to do that they have to

offer more favorable conditions to migrants. The factors affecting the immigrants

choice of the place where to live and work are several, such as labor conditions

(not just compensation and insurance policies, but also length of vacation and

other factors directly dependent from national Governments), institutional

infrastructure (welfare and health-care system, education) and finally language. In

general, all other things equal, immigrants find more attractive English-speaking

countries than the others, because usually English is the second language theyknow after their mother-tongue. Therefore its more comfortable for them to use it

in the everyday life than any other language, so English-speaking countries have an

advantage in attracting the desired immigrants.

The last, but not the least tension is between RECEIVING countries andIMMIGRANTS themselves.

This graph shows that the bigger the share of high-skilled workers in the population ofimmigrants is, the better it is for the natives. But in general, for most countries, this

effect becomes positive only when around 60-70% of the immigrants are high-skilled

(with the only exception of Luxemburg where, as we can see from the graph, even low-

skilled workers can be a useful source for the Country). Therefore, high-skilled workers

are usually more preferable for receiving countries than low-skilled ones, but empirical

data shows that a lot of immigrants are low-skilled and they still want to migrate in the

receiving countries. The character of the migrants skills can possibly explain these

differences among countries; the key issue again is whether the migrant substitute or


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complement the native workforce. As previously said, if the immigrant and his/her

skills complement the natives workforce pool than both sides win. However, when the

immigrant substitutes the local workers this effect will be negative.

Besides this important economic aspect, the tension here discussed presents also a

relevant social side. Issues arise both when considering the needed acceptance of the

immigrant by the native population and the integration of the migrants into local

society. On one hand, sometimes are the migrant him/herself that doesnt want to

integrate, keeping on living in their own communities; on the other hand, even if they

try to integrate, they still could feel rejected by the society and not well accepted.

All in all, as seen in the previous parts, migration brings benefits for the main players,

but at the same time it still causes drawbacks and tensions, reasons that explain in partwhy the flow of people is so tightly restricted nowadays. After having defined the all

picture regarding the people flow situation, its time to provide several

recommendations that could help to leverage on the benefits from migration while

reducing the drawbacks and balancing the tensions.

5. Recommendations

#1: Receiving Countries should help source Countries to develop.

The term develop stands for the concept that receiving Countries should really help

the source Countries to grow in a constructive way, not just offering them financial aid

like charity; the natural consequence would be a decrease in the outflow of people

from the source countries, especially illegal. There are different ways and tools that

could be used to reach this target. A first solution could be to provide source Country

with financial support addressed exclusively to education in order to increase the

amount of educated people, a necessary condition to support their own country

development. Another possible implementation is to link migration policies to some

other policy issues making concessions. For example, developed countries could

decrease trade barriers, allowing goods produced in the developing country to become

more competitive both in their own and in developed Countries markets (even if just

in this second case we have a direct impact of lowering trade barriers). In this way,

immigrants would not have to leave their Country to benefit from higher income, but

could actually produce goods in their own homeland.

However, there are some drawbacks that need to be taken into consideration. For

example, the policy concessions issue could result in very complicated negotiations

among the different countries and the helping to develop policy could not adduce


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benefits in the short-middle term, since it has a very long-term effect. While the

country of origin is developing, incomes level overseas is still significantly superior,

holding the likelihood of emigration steady. Only when the two levels will be similar or

equal (but that can happen only in a long period of time) the likelihood of migration

will decrease, shrinking the nowadays difference among source and host country.

#2: Focus receiving Countries policies on the attraction of the best workers.

This attraction can be done with the help of the point -based immigration system.

Australia, for instance, already uses it, and so will the UK by 2012. All the potential

applicants are evaluated and subsequently given points: theyre brought into a range

(generally called tier) and finally the Government will choose how many people can

get into the Country from each tier (of course from each range higher- level of pointscandidates are selected). A further example of such a policy implementation is the

European Blue card: it is also targeting the best workers, but not among all the types of

jobs, just high-skilled ones. Another way to attract desired workforce is through the

improvement of institutional infrastructure: receiving countries, for instance, could

work on developing the Universities that could offer better education services and,

thus, attract immigrants. However, also here there are drawbacks. First of all, the

presence of brain drains in source countries. To solve or at list limit this phenomenon,

receiving countries could undertake different actions. For example, the Blue-card

program has opt out solution to this problem. It offers source countries an option to

decide whether to become a participant of this program, and thus taking the risk of

brains drain, or not to participate, avoiding sharing their pool of talents with the rest of

the world. Another issue is the illegal migration. All the actions implemented to attract

the best workers lead to a first step of succeeding to have the needed temporary

workers; the downside, however, is that these temporary migrants might not want to

leave the host country, becoming illegal permanent residents. In order to solve this

problem, countries could offer financial compensation to the temporary worker for

leaving the country. For example, employers could request some money from a worker

at the beginning of the contract and return them back when the worker leaves the

country or, second option, to defer some part of the compensation until he/she

returns back home.

#3: Link migration and trade

The last recommendation is linked with the first one and is represented by the link

among migration and trade policies. Ideally, countries could build migration

agreements on the basis of the existing regional trade ones: good example of this point


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could be EU or NAFTA. But the problem here is that neighborhood countries, eligible to

build such agreements, sometimes have huge differences in the real income level. So if

they open the boundaries, there will be mass migration from poor regions to rich

ones. To give an example, expansion of EU-15 to EU-27 caused mass migration from

the East to the West of Europe, causing once again brain drain and depopulation of

the poor Countries (with all the drawbacks weve seen for the source Countries).

The other point here is that all the countries are different in the cultural, political and

traditions aspects, harming them to find an agreement on such issues. An example for

this point is the European Union again. All the members of EU are different and they

are reluctant to delegate decisions about migration policy to the European level, since

such decisions are seen as an important element regarding the national sovereignty.

6. Conclusions

As shown in the paper migration is a very complicated phenomenon. The free labor

market seems to be an utopia, more than something actually of real implementation;

however, there is still space to gain more benefits from migration, taking in mind all

the drawbacks and tension that the free flow of people could cause.


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Recent Trends, Future Challenges

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group 12 - iebd migration

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