Question

What are short-run and the long-run effects of migration in the receiving country?

Answer 1

The economic effects of migration vary widely. Sending countries may experience both gains and losses in the short term but may stand to gain over the longer term. For receiving countries temporary worker programs help to address skills shortages but may decrease domestic wages and add to public welfare burden. The economic effects of migration for both sending and receiving countries may also vary depending on who is moving, specifically with respect to migrant workers’ skill levels. A Swedish Professor notes, “the problem is not immigration; it is integration, especially in the labour market. If there are no jobs, the consequences are segregation, housing problems and divided cities” (Traynor, 2010).

For sending countries, the short-term economic benefit of emigration is found in remittances. Remittances are funds that emigrants earn abroad and send back to their home countries, mainly in order to support families left behind. According to the World Bank, remittances totaled $529 billion worldwide in 2012, with $401 billion of that money flowing into developing nations (2013). Significantly, these figures only account for funds sent through formal channels, so the amount of remittances is likely much larger than these numbers suggest. The World Bank notes that remittances sent through informal channels could add at least 50 percent to the globally recorded flows .