Look to skilled migration

Activists march during a pro-migrant rights rally in Washington, DC, on Labour Day. Economic theory holds that most of the world’s poor could become much more productive and richer if they were allowed to move to the developed world.

If politicians were truly serious about ending global inequality, many economists would say there is one obvious policy: Allow greater global migration. A nurse is paid about $1,900 (Sh258,000) a year in poor countries and about $32,000 in rich ones. A McDonald’s worker in India earns 16 times less than their counterpart in the US. 

Economic theory holds that most of the world’s poor could become much more productive and richer if they were allowed to move to the developed world.

Studies routinely suggest that opening the world to migration could increase global GDP by a massive 50-150 per cent. Of course, it would also involve more than two billion workers moving to the rich world, but where no mainstream politician is about to call for free mobility.

There is, however, another migration policy that is likely to be more politically achievable and reduce inequality and help the rich and poor worlds: An increase in skilled migration.

Research by my think tank for many years has been driven by the failure of the world’s governments to reach their promises. In the SDGs, the UN’s global goals, all the nations have made extravagant promises for 2030 across nearly every agenda. This year, we are at halftime for these promises but far from halfway home. On our current trajectory, we’d achieve them at least half a century late.

Our new research identifies 12 incredibly effective policies that could deliver huge benefits at moderate costs. Smart migration is one, especially for its impact on reducing inequality.

Enabling skilled migration to countries that need more skilled labour could achieve both higher productivity and less inequality. And surveys tend to suggest it’s more politically viable as skilled migration is less divisive than overall migration. Our new study on migration looks at the impacts of allowing more skilled migration, particularly of doctors and Stem workers.

Stem workers comprise nine million of the world’s 37 million skilled migrants and medical doctors one million (there are just 13 million doctors).

What if every country took in 10 per cent more skilled migrants from the same mix of countries they already have? Migrants would, clearly, benefit from a dramatic and sustained increase in wages.

The recipient countries would also see benefits: Specialists will fill available positions so that less specialised workers can go back to doing what they do best, with slightly higher economic growth. They’ll also get more specialists without incurring the costs for a lengthy, costly education. 

Drives growth

Introducing more diverse ways of thinking, doing things and approaching problems can generate more innovation, which drives growth. 

Less obviously, countries, where migrants originate, will also benefit. Often, we focus on the ‘brain drain’ that costs the country in educating new specialists while lowering the productivity of those who remain. But skilled migrants who leave will establish new and additional channels for trade, investment and production to boost their home countries and send home substantial and regular remittances. These benefits outweigh the costs by about two to one.

The overall global benefits will be much higher than the costs. While the costs add up over the next 25 years to $55 billion, the benefits will be almost $1 trillion. This means every dollar spent on the policy will deliver a substantial $18 of social benefit.

Dr Lomborg, PhD, is president of the Copenhagen Consensus and Visiting Fellow at Stanford University’s Hoover Institution. His new book, ‘Best Things First’, is now available for pre-order. [email protected]. @BjornLomborg www.lomborg.com.