Question

Policy recommendations : migration's influence on the economy.

Answer 1

Migration's economic consequences vary greatly. In the short run, sending countries may suffer both benefits and losses, but will be likely to benefit over the longer term. Temporary worker services help fix capacity shortages in the receiving countries, but can lower domestic incomes and contribute to the cost of public welfare. The economic effects of migration in both sending and receiving countries can also differ depending on who is travelling, especially with regard to the ability levels of migrant workers.

In contrast with other financial transactions, remittances are more steady and reliable and, more critically, they are counter-cyclical, providing a hedge against economic shocks. Remittances may be essential to security, sustenance, healing, and reconciliation in war or post-conflict circumstances. Remittances are spent on general consumption goods in local communities to pay mainly for family livelihoods, adding to local economies and helping small businesses. In addition to savings in financial institutions, the equal share of these expenses is geared towards the building of housing , health care and schooling, thus creating jobs in these essential services industries.

The positive economic benefits from immigration are primarily the product of the influx into the market of cheap and willing labourers in developing countries, which are also on the receiving end of migrant flows. For instance, migrant workers in the U.S. and Canada frequently fill low-wage positions for which there is inadequate domestic availability of labour, such as in the agriculture and service sectors. Much like the American economy profits from inexpensive imports of manufactured goods, so does the importation of low-cost labour. Economists who embrace the concept of these positive gains contend that immigration has no effect on domestic workers' incomes or job availability and that there is little connexion between immigration and the spread of U.S. income and unemployment rates.