Migration & Remittances Effects Flashcards
What is development? Why Migration and Development?
DEVELOPMENT the process of improving the overall quality of life of any given group of people.
Different interpretations of development = Different opportunities through migration
* Human development paradigm
o Rights protection/fulfilment
o Expansion of capabilities
* Economic development
o GDP growth
o GNI growth
Why migration and development? Migration and development are intimately linked & mutually reinforcing:
* Migration enabled by/enabler of development
* Migration as capability enhancement
But the relationship is difficult to predict & dependent on context:
* Social/economic/political conditions in both sending/recipient society
* Reason for migration (forced/voluntary)
* Patterns of migration (i.e., seasonal, circular, bilateral, etc.)
“The heterogeneity of real-life migration-development interactions is too high to fit into deterministic theoretical schemes predicting the development outcome of migration (de Haas, 2010, p. 13)
What KIND of development (macro, micro, meso)
What TYPE of development (economic, social, political, etc.)
Development for WHOM?
Development in what CONTEXT?
Which prevailing IDEOLOGY of development?
Who are the Optimists and Pessimists in Migration Theory?
The OPTIMISTS (pre-1973 and post-2000)
o Pre 1973: driver of industrialization; wage equalization; guestworkers programmes.
o 2000 onwards: surging remittances; “new development mantra”. From the 2000s the World Bank and others started to talk a lot about remittances.
The PESSIMISTS (1973-2000)
o Background of Oil Crisis 1973.
o Brain drain.
o Remittance dependency. They focus on remittance dependency amongst other things: Countries are not as economically productive as they could be because of the inflows of remittances taking care of economic needs.
o On a global level, only a small percentage of remittances goes to the lowest developed countries, but these countries do have relatively high levels of remittance flows compared to their GDP.
o Dutch Disease is when a country has a large export of a resource (e.g. migrants) that leads to a large influx of foreign currencies in the form of e.g. remittances. That money needs to be exchanged to the local currency, artificially appreciating the local currency due to greater demands. This appreciation leads to a decrease in exports because the currency is now relatively more expensive compared to other currencies on the international market. This can have a negative effect on exports and therefore domestic production.
o Crowding out of local production.
o Culture of migration – migration becomes socially expected, meaning that the choice to stay becomes more difficult to exercise.
Migration Transition Theory
MIGRATION TRANSITION THEORY: In low-income societies, marginal increases in income, improving education, infrastructure expansion, urbanisation, and concomitant transformations from largely agrarian to industrial and service-based economic systems are generally associated with increasing levels of both internal and international migration. In other words, development initially leads to more migration. Only in the longer term, when societies become wealthier and predominantly urban, does emigration tend to decrease and immigration to increase, after which societies transition from being net emigration to net immigration countries.
Transition theories show how migration is an intrinsic part of broader processes of development and social transformation. They argue that the various demographic, economic and cultural transitions that industrializing, modernizing and urbanizing societies go through initially tend to boost levels of internal and international migration.
What is circular migration? What is the triple win scenario?
CIRCULAR MIGRATION: the temporary and usually repetitive movement of a migrant between home and host areas (usually migrant workers). Migration nearing (continuous) mobility – it does not necessarily denote return migration. It is argued that this leads to a triple win for the migrant, the sending country, and the destination country. However, there are some negatives there too. Most circular migration is observed in seasonal migration (agricultural workers or construction).
What is return migration?
RETURN MIGRATION important to distinguish forced (deportations etc.) and voluntary return. Old ideas about migration are that a migrant should return to the place of origin and help develop their place of origin. Return migration is all about connections, whether they are physical or virtual (online). Virtual return can e.g. through providing medical care online.
Why we should not use the term “BRAIN DRAIN”? And why is it wrong that some countries try to stop it?
Brain drain migration of highly skilled people, in general tertiary level education (no one internationally agreed definition), often additional connotations.
* Often refers to high proportion of highly skilled people moving from one country to move to another/other countries.
* Often associated with developing countries.
* The term first came out of the UK, around 1950s-60s British Royal Society to describe highly skilled going to US and Canada.
* Drain implies something bad. But is not necessarily a bad thing! Absence is a direct, clearly noticeable result of highly skilled migration in countries of origin.
* Multitude of positive things: i.e., technology transfer, trade networks, more investments in the countries of origin, migrant investments, transfer knowledge, in some cases transfer norms
Some countries have considered to even block the “brain drain”. This is wrong for 3 main reasons:
1. Negative for migrants themselves, it is not only unfair (limiting the professional opportunity of an individual), but also a form of discrimination, which can add to other forms of discrimination
2. It decreases the positive effects that migration generates for both places of origin and destination
3. Theory and evidence don’t support the idea that keeping people from leaving will positively affect development
Mobility does not cause insufficient systems because emigration is a result of larger issues. Need to think of other policies to get people stay (not simply blocking them).
What are the POSITIVE effects of MIGRATION & REMITTANCES on the COUNTRY OF ORIGIN at the MICRO-MESO-MACRO levels?
Micro (individual/household):
* Poverty reduction
* Consumption smoothing
* Human capital formation (Education)
* Better return to human capital investment
* Health (nutrition, knowledge and access)
* Reduce capital constraints
Meso (community):
* Reduce inequality (depends on who migrates/who remittance receiver is
* Social remittances (cultural, social, and political norms in the community), i.e., Shifting social norms
* Increase entrepreneurship and investment because of networks
Macro (country level):
* Remittances are a stable source of external finance. Formal remittances can be used to:
o Securitize against future loans
o Bring in foreign exchange and can alleviate balance of payment burdens (pay for imports)
o Increase countries credit worthiness
o Help to raise external finance
* Remittances used for consumption vs. investment???
* Lower unemployment rates
* Increase wages
* Increased trade and FDI
* Increased economic growth
* Reduce disparities between sending and receiving countries
* (Highly skilled) Returnees and development
* Diaspora investment and engagement
What are the POSITIVE effects of MIGRATION & REMITTANCES on the COUNTRY OF DESTINATION at the MICRO-MESO-MACRO levels?
Micro:
The migrant
* Increased wages
* Better living conditions
* Safer environment
* Increased possibilities for education and good quality health care
* More challenging and rewarding work environment
Meso:
* Increased innovation in the workplace and school
* Positive competition
* Increased cultural variety
Macro:
* Reduced labor costs
* Increased innovation (patents)
* Cheaper goods and services for consumers
* Increased trade
* Labor complements Wage increases for natives
* Reduction in labor force dependency ratios
* Reduce labor shortages
What are the NEGATIVE effects of MIGRATION & REMITTANCES on the COUNTRY OF ORIGIN at the MICRO-MESO-MACRO levels?
Micro:
* Roles and responsibilities within the household increased or shifted
* Child labor
* Children not going to school
* Lack of human capital formation
* Risks of exploitation (women, children)
* Loss of care giver (effects on children and elderly)
* Laziness/lack of productivity (careful with leisure) (moral hazard)
*Particular risk of negative effects if remittances are expected and not received.
Meso
* Production capabilities
* Community functioning
* Loss of highly skilled workers (health care workers, teachers)
* Lower educational attainment in high-migration prevalence areas (in very specific cases)
Macro
* ‘Brain drain’- high rates of migration of the highly skilled
* Dutch disease
* Diaspora conflict generating
What are the NEGATIVE effects of MIGRATION & REMITTANCES on the COUNTRY OF DESTINATION at the MICRO-MESO-MACRO levels?
Micro:
* Individual migrants
* Possible exploitation of the migrants
* High pressure to send remittances can decrease immigrant standard of living
* ‘Brain waste’/underemployment
* Fear of the unknown
Meso:
* Pressure on public infrastructure (schools, hospitals)- mainly when migration happens suddenly of a large group (i.e. displacement)
* Social cohesion
* Pressure on environment (resources)
Macro:
* Push wages down (same skill sets, who competes with who)
* ‘Brain waste’
* Strain on infrastructure
* Social cohesion
* Possible issues of increased crime
What are the 3 main mechanisms of migration?
Mechanisms
- Monetary remittances
- Social remittances (norms, values, knowledge transfers)
- Absence of the persons themselves
What is poverty?
POVERTY: deprivation in a given area (traditionally monetary poverty, i.e., income). It can be absolute or relative. Nowadays more multidimensional (i.e., living standards, education etc., not only monetary).
Migration can affect poverty and vice versa
Absolute/relative
Income/multidimensional
Poverty is a multifaceted concept several dimensions (i.e., living standards, health, education, nutrition…)
Poverty is traditionally viewed in monetary terms inability to be above a set threshold.
Are thresholds appropriate?
After a certain development level, the concept of inequality becomes more relevant
What are some problems of the monetary approach to measure poverty?
Why in some cases consumption is used to measure monetary poverty instead of income?
Problems MONETARY approach
* Monetary poverty only one side of the story
o Not all members of a poor households are poor
o Not all members living in non-poor households are by definition not poor
Rationale
o Availability of goods and services
o Intra-household distribution of resources (different needs, substance abuse)
o Monetary poverty lines identify households with insufficient monetary resources, but –> Provides insufficient information/guidance for policy
Measuring monetary poverty –> Income vs. consumption
* In developing countries is more stable than income (which is really fluctuating over time)
* Subsistence agriculture etc. (people have 0 income but they are still consuming)
Other than the monetary approach, what areother approaches to poverty?
Other approaches:
Capability approach: poverty is not just about the lack of material resources but also about the inability to live a life that is valuable and fulfilling. The capability approach emphasizes the importance of enhancing people’s capabilities to overcome poverty. It suggests that poverty reduction should focus on expanding people’s opportunities and choices, rather than simply increasing their income or material possessions. The capability approach also highlights the importance of individual agency in poverty reduction. It suggests that people should have the freedom to pursue their own goals and aspirations and that development interventions should empower people to exercise their agency and expand their capabilities.
Social exclusion approach: poverty is not just about income or material deprivation but also about social exclusion, which can take many forms, such as exclusion from education, employment, healthcare, housing, and political participation. The social exclusion approach also highlights the importance of social relationships and networks in alleviating poverty. It suggests that social connections can help individuals and groups overcome poverty by providing them with access to resources, information, and opportunities.
Participatory approach: having communities themselves define what is important to them (defining who is poor based on the values and structures of that community etc.)
What is inequality? What is relative deprivation?
What is the relationship between inequality and migration?
What is the “Migration diffusion theory”?
INEQUALITY
Unequal distribution of attributes (i.e., income, consumption…) across the population. Often measured through Gini coefficient (0 = perfect equality; 1 = perfect inequality). Inequality is more important in people’s decision to migrate, rather than poverty –> RELATIVE DEPRIVATION= Feeling of being poor compared to others in the community really important driver for migration.
“Both individual and collective relative deprivation across political, social and religious categories play a significant role in the decision on whether to migrate at all” (Czaika, 2012)
Migration and Inequality: who migrates?
High costs associated with migration increases poor population difficulties in accessing more remunerative migration opportunities The poor tend to migrate less or to low-return destinations (i.e. South-South Migration, i.e., Nicaragua migration patterns: USA vs Costa Rica).
* Inequality in the country of origin already plays an important role
* Migration can exacerbate inequality in origin areas
* The very poor have less possibilities to migrate and less access to high-return migration
MIGRATION DIFFUSION THEORY It’s possible that in the long-term migration reduces the cost of migration for everybody.
The relationship between migration and inequality is U-shaped:
At the beginning of a village’s migration history, when costs of migration are higher, only better off households will be able to migrate the distribution of remittances will be unequal: they can have a notable negative effect on the village income distribution.
However, as the stock of village migrants grows at a particular location, so too does the propensity of migration by other villagers by decreasing costs of migration, migration will have an equalizing effect
“if there is a tendency for contacts and information to spread across household units (and not only within the household), then migration and receipt of remittances by households at the lower end of the income distribution is likely to occur. This would erode and possibly reverse any initially unfavourable effects of remittances on income inequality.”
What is vulnerability?
Vulnerability Risk of falling into poverty in the future or even deeper into poverty, even if the person is not necessarily poor now; it is often associated with the effects of “shocks” such as a drought, a drop in farm prices, or a financial crisis
Vulnerability affects individuals’ behaviour in terms of investment, production patterns, and coping strategies, and in terms of the perceptions of their own status
* Some households are more vulnerable than others (i.e., agricultural, single-parent, female head, only one source of income etc.)
What are the POSTIVE effects of MIGRATION on POVERTY in the COUNTRY OF ORIGIN?
Potential to improve livelihoods
* Increase in wages
* Remittances
* Safer environment
* Access to better health and education
* Better aspirations for children
- Increased income Remittances
Improve income, consumption smoothing, relax credit constraints, cushion risks and protect households from sudden shocks. Remittances can be invested in productive assets. - Return/transnationalism
New skills and education may be acquired at the place of destination and transferred back to the place of origin. increased capability
Macro: Evidence shows that increase in migration levels contributes to the decline in share of people living in poverty
Micro & Meso: Evidence shows that migration can contribute to help households exiting poverty.
Migration can have positive impacts at village level, as increased income leads to increased labor demand (i.e. for restructuring house, for weddings or funerals…)
What are the NEGATIVE effects of MIGRATION on POVERTY in the COUNTRY OF ORIGIN?
Can increase vulnerabilities
* Exploitation and abuse during journey and at destination
* Legal status
* Increased vulnerabilities and need for labour of the left-behind
What are the effects of MIGRATION on POVERTY & INEQUALITY in the COUNTRY OF DESTINATION?
How can migration affect poverty and inequality in destination countries?
* Mixed results. It depends on the scale of migration
* Lack of data for South-South migration
* Mixed results for South-North:
o Canada: increased inequality because migrants are earning less
o USA-Mexico: migration minimally responsible for rising inequality
o Nicaragua-Costa Rica: no evidence
* Context matters a lot, and also types of migrants (i.e., forced migrants are generally more vulnerable than labour migrants)
* Poverty rates are tendentially higher among migrants than natives
* Low-income migrants likely settle in high poverty neighbourhoods
Mechanisms that can have effect on education in countries of ORIGIN?
- Monetary remittances
- Social remittances –> Migration creating aspirations
o Human capital attainment (gaining more education for migration)
o More effort from children because of being aware of parental sacrifices
o Norms and expectations for education (quality, corruption etc) - Absence of a person/caregiver
What are POSITIVE effects of MIGRATION on EDUCATION in the COUNTRY OF ORIGIN?
In general, more positive outcomes than negative
* Increase in enrolment and attendance
* Better grades
* Increased educational attainment (level of education)
* Better quality schools more access to private schools (spill over effects on the community)
Effects on GENDER are different (sometimes it allows girls to go to school, but often boys are prioritized)
What are NEGATIVE effects of MIGRATION on EDUCATION in the COUNTRY OF ORIGIN?
- Decrease enrolment and attendance (i.e., increased aspirations to migrate, or absence of the caregiver, or grandparents are not able to help the children with homework, or if the person doesn’t send remittances)
- Worse grades
- Decreased educational attainment (Example of male Mexican youth from high outmigration areas)
Mechanisms that can have effect on education in countries of DESTINATION?
Mechanisms:
* Competition (positive-grades and achievement, negative-resources)
* Language issues, socioeconomic/level of education background of parents higher level of education of parents, better performance in school of children (true in general, but even stronger effect with migration background)
* Discrimination
What are POSITIVE effects of MIGRATION on EDUCATION in the COUNTRY OF DESTINATION (for natives/immigrants)?
Native children
* Better learning outcomes
Immigrant children
* Better access to education
* Better quality of education
* Better levels of attainment
* More diversity in studies