Question

In what respect is the economic decision to move across international borders an investment decision? Why do economic migrants move to some countries but not to others? Cite an example of an explicit cost of moving; an implicit cost of moving. How do distance and age affect the migration decision? How does the presence of a large number of previous movers to a country affect the projected costs and benefits of subsequent movers?

Answer 1

                                        International migration occurs due to many reasons, the major being the push and pull factors. The movement of people across borders owing to pull factors always brings in advantages to the migrants especially in finding a better investment option. The opportunity of better jobs, better living standards etc are the major pull factors that promotes international migration. The analysis of various economies around the world shows the fact that high skilled migration always results in better income opportunities and promotes investment. With more interaction among various sections of international community, there are increased chances of formation of conglomerates due to expectations of better profits. Moreover, the FDI is also expected to rise as the migrants would bring in benefits to the home country. Thus, positive migration is always a better opportunity for better investment options.

                                    Economic migrants refer to those migrants who moves across he borders for specific economic benefits that may include better investment opportunities, better earning capacity, better market availability etc. In the light of this, we can see that all the nations don’t offer economic benefits or opportunities. For example, consider a nation whose economy is unstable and filled with terrorist and related illegal economies. It is clear that an economic migrant will not prefer to move to such locations. Thus, economic migration happens only at places that offer economic benefits.

                                    An explicit cost refers to a cost incurred and shown in the ledger or recorded as a statement in international parlance. An implicit cost refers to a cost that has already occurred, but has not been shown or reported as a separate expense. With respect to migration, an explicit cost is a visible cost and an implicit cost is invisible. For example, the travel cost of migration or the profit earned on migrant establishments are all supporting explicit costs whereas the cost of adapting to new cultures or market system as a result of migration may be treated as implicit cost as these are invisible costs.

                                    Distance and age are among the major factors that affects a migration policy. For example, young population may prefer for migration where better studies, job and earning opportunities are available. For many youth, international migration does not cause an issue and for most of the youth among them, distance also does not matter. But, that may not be the case for aged people as they prefer migration most of the time for better living standards or better standards supporting a retired life. For them, distance also forms a major factor. Thus, from the above analysis, it can be seen that age and distance forms the major factors behind migration policy decisions.

                                    The statistics of previous migration trends also forms a major factor that affects the migration policy across the world. The presence of recent statistics gives an idea of the economic situation of the nation and hence have profound effects on the migrant behaviours of people. Moreover, it helps the migrant people to have an idea of how the migration would benefit them and thus gives opportunity to modify migration preferences in accordance with the analysis.