How the World Works

Thursday, Oct 12, 2006 11:45 PDT

Migration nations

Could more immigration add up to less?

By Andrew Leonard

Some figures on remittances, derived from papers given at a conference on Migration, Trade and Development sponsored by the Dallas Federal Reserve Bank last week. (Thanks to New Economist for the link.)

According to the World Bank, global remittances in 2005 added up to $235 billion. $167 billion went to developing countries, double 2000's total of $86 billion.
For some developing nations, remittances have become a major share of gross domestic product. 11 percent in Guatemala in 2004. 16 percent in El Salvador.
One presenter at Dallas suggested that if the remittances sent home by migrant workers were considered income generated by the "export" of workers, then remittances would be equivalent to 78 percent of El Salvador's total value of exports in 2004, and 108 percent of Nicaragua's.
At over $170 billion in 2005, remittances to developing countries significantly exceeeded the $110 billion worth of "Official Development Assistance" donated by developed countries in 2005.

Looking at these numbers, it seems pretty clear that remittances from migrant workers are a significant form of wealth redistribution from rich countries to poor countries. The data are not conclusive as to whether this redistribution ends up spurring further development in poor countries that may ultimately reduce the pressure to emigrate. It may be too soon to tell, given the dramatic rise in remittances over just the last half-decade. But the possibility that migration may end up benefiting the nations that workers leave is critical to evaluating immigration policy in the countries that workers go to. In the United States, advocates of stronger restrictions on immigration sometimes paint remittances as a negative drain on America's wealth. But if those remittances end up, in the long run, strengthening the economies from which migrants come, then maybe the doors should be opened up even wider.