REFLECTIONS ON THE RELATIONSHIP BETWEEN
MIGRATION AND DEVELOPMENT*
Demetrios G. Papademetriou
International Migration Policy Prograrn
Carnegie Endowment for International Peace
* This paper was prepared for the seminar on International Migration and Development in North and Central America, Mexico City, May 21-29, 1998. It relies heavily on Demetrios G. Papademetriou and Philip L. Martin, eds., The Unsettled Relationship: Labor Migration and Economic Development. Westport, Connecticut: Greenwood Press, 1991.
Few social phenomena in the last thirty years have proven as controversial or as elusive in their responsiveness to state intervention as international migration. And within that phenomenon few components have been as resistant to accurate analysis as the relationship among emigration, return migration, and development.
Except for forced population movements and exchanges, most international migration in the twentieth century has occurred during the first and last quarters of the century. From 1900 to 1920, the principal destination countries were the United States a number of Latin American countries, and several of the Western European countries which, during the previous century, had provided much of the human capital that fueled the industrial engines of the United States and Canada.
In the last thirty years, however, one witnesses both a widening arid a deepening of the reach of the migration process. Virtually ah countries in the Mediterranean littoral. East and Southeast Asian countries. and many Latin American and English-speaking Caribbean countries, became very significant sending regions. By contrast, some countries have continued to be a source of large scale emigration throughout the century and have developed complex historical symbioses with a specific receiving economy and society. Mexico and the United States are archetypes of such a relationship.
In this essay, I review knowledge gained from the study of international migration in most of the world's major regions. First, I examine the motivations and goals of migrants and the households of which they are members. Second, I examine the effects of migration on these migrants and their families. Third, I examine the effect of emigration and return migration on the home country’s development. Finally, I make some suggestions as to how to improve this relationship in order to maximize the benefits of migration for developing countries through multilateral cooperation.
The fundamental underlying assumption of my analysis is that as a rule, no immigrant-sending countries has been able to draw out the full complement of the potential economic benefits that the most relevant type of emigration for this paper--the temporary/circular emigration process --is thought to entail. At the same time, many sending societies have found that containing the social and economic costs that are an ever present by product of this process has also been problematic. Part of the explanation for this dual challenge stems from a fundamental misunderstanding of the developmental process. 1
The essence of development is not merely the growth in some economic indicators that are sensitive to income remitted by a country's nationals abroad and the savings that individual migrants might bring with them upon return. In some cases, such outcomes of emigration may in fact have certain counter-developmental consequences. Nadir Fergany, a student of migration in the Arab region, makes a point that, until very recently, was often discounted: that true development requires not only structural economic change, but also deep social and political changes. Only when such changes occur together can a society's productive forces grow and diversify to a degree that satisfies the basic needs of all its people, an achievement Fergany calls. “...the first step toward higher levels of welfare."
For most of the last two decades, many dismissed the value--and political--judgment inherent in this message. Its importance goes nonetheless to the very heart of the many analyses which appraise the relationship between the international migration process and the development of the sending societies. Development is indeed a multidimensional process that relies not only on such attributes and forces as a country's human and material resources, social and physical infrastructure, access to capital and technology, but also on political stability and governmental efficacy and the existence of a robust civil society sector that demands--and can extract --accountability and can promote the fundamental “democratization" of both public and important private sector institutions. It is only by examining the effects of emigration--and in particular of two of its most important components, return migration and remittances--on all these elements that can one judge the overall impact of emigration on social and economic development.
MIGRANTS AND THEIR HOUSEHOLDS
Assessing the effect of migration on development requires that we understand first the reasons for which individuals enter into the migration stream. For the purposes of this brief review, I have borrowed and expanded upon a simple dichotomy from African studies on migration that distinguishes between "survival" and “mobility” migrants.
Survival migrants are made up of the abjectly poor rural migrants found principally in Asia, Africa and the Latin American/Caribbean region and who are typically not “proletarianized" (i.e., engaged in industrial labor for wages) prior to going abroad. Survival migrants enter the migrant stream "pushed" by structural poverty and as the result of household decisions about its survival. As a rule, they tend to be young, single males with few skills and little education, and typically lack the necessary work and residence permits for their destination countries. To a large degree as a result of their status, they hold poor jobs abroad (usually in agriculture. extractive industry and the informal sector), their employment patterns are erratic, and their wages are often below a country’s official rates or a region's/industry's prevailing rates. Consequently, their earnings are meager, their savings and remittances modest and. because of their socioeconomic background, the allocation of these funds is directly tied to consumption and the survival of the household.
Mobility migrants are a more heterogeneous group. Their skills and education may range from those of high-level manpower (technical and managerial personnel) and those of proletarianized internal migrants (who often use cities as staging areas for international migration), to peasants recruited directly by private industry in advanced industrial societies. As one would expect from this composition, mobility migrants are primarily "pulled" by the prospects of better economic and social opportunities. The decision to emigrate, however, again rests with households that selectively “assign" members into categories of movers and non-movers. These decisions are typically made on the basis of collective family goals, which are in turn shaped by such factors as internal household dynamics, gender-based role divisions, birth rank etc.
As one might suspect, the migration of mobility migrants is more systematic and better organized. they hold better jobs, earn better wages, adjust abroad more readily, exhibit a higher degree of economic rationality in their savings and investment decisions, and are better able to reconstitute their families abroad-if they so wish. However, this very ability to reunite gradually with their families in the host country and their evolving social and economic aspirations often militates against their return and thus reduces the positive effects of migration on the development of the sending country.
The emigration of both survival and mobility migrants is critically influenced by such structural social and economic conditions as the economic strategies pursued by political and economic elites at source and destination. Furthermore, a variety of idiosyncratic factors, such as personal ambition, geographic contiguity, the availability of mature networks, cost of transport, psychological motives, or simply individuals' restlessness and dissatisfaction with their lives and environment. are also factors which, to varying degrees, influence decisions to emigrate or return.
EFFECTS OF EMIGRATION ON MIGRANTS
Whether a person is a poor rural migrant or a high-skilled technical professional recruited from Asia, the physical and psychological effects of immigration can be profound. Differences in the type of immigration, however, affect how the migration experience impacts on individual migrants and their families.
Migrants often experience a variety of physical and stress-related ailments while abroad. These effects tend to be more pronounced on survival migrants. Suspended between two cultures and often living at the very margins of the host society, most temporary and circular migrants have few of the skills required to adequately understand and negotiate their new environment. At the same time, because of the assumption of temporaries (an assumption frequently shared by both the host society and the migrants themselves), there is little incentive on either side to invest in the migrant’s secondary socialization. But even when migrants are able to extend their stay abroad and reunify with their family there, the adjustment process is a lengthy and difficult one and the social and psychological tensions which inhere in all migration, particularly the gender and generational ones, will continue to affect family cohesion. The existence or formation of ethnic communities may palliate but does not eliminate these problems.
At the same time, families left behind have to adjust to the sharply restricted interactions and the social and psychological problems attendant to the breadwinner's prolonged and repeated absence. As a result, family bonds and solidarity come under pressure-the implications of which range from changes in social norms and the terms and locus of decision-making and control. to new gender-differentiated economic roles and child-rearing practices. Although not all of these changes are undesirable, many of them create serious readjustment problems for the returning migrant.
Against these negative effects of emigration one must balance the undisputed social and economic gains which most migrant households realize. Whether their families emigrate with them. come to join them at a later time, or stay behind and receive the remittances from the household member who is abroad, the economic benefits are substantial. Burki estimates (1991) that the income of Pakistani families with an unskilled member in the international labor migration stream is multiplied by a factor of three; if the migrant is a skilled worker or a professional, the gains are proportionately higher.
EMIGRATION, RETURN MIGRATION AND DEVELOPMENT
Although large-scale emigration would seem inevitably to have a radically transforming effect on the sending societies, in some cases and in the near term, it may help preserve the status quo in a manner which may make for stability but can delay and even derail the development process. For example, El Salvador's (or Mexico's) stability-through-emigration “model" may not be unique in terms of the degree to which many labor-sending countries take advantage of or rely on emigration to postpone needed social and economic changes and help preserve antiquated socioeconomic and authoritarian political systems.
Emigrant-sending countries have been rather slow in assessing dispassionately the effects of the migration process. Many of these countries confronted spontaneous or received-induced organized migration with unrealistic expectations. They saw in emigration an opportunity for their unemployed and underemployed workers to find employment abroad-an opportunity they assessed as an economic, and at times, political blessing. They did not take into account that emigration might deplete their already meager supplies of skilled manpower-while tapping the healthiest, and most dynamic and productive members of their populations; that the age and sex selectivity of emigration might lead to the demographic deterioration of rural sending communities, leaving them with disproportionate numbers of children, women and the elderly-thus impeding the communities’ social and economic progress; and that the socioeconomic gains from the skills and remittances of returning migrants might be only marginal in the absence of concrete preparation for them.
Migration, Selectivity and the Human Capital Characteristics of emigrants.
In order to assess the impact of emigration on sending countries, one must begin by examining the characteristics of workers who enter the migration stream. Migration is selective in two ways. Migrants are usually young, healthy and dynamic individuals. Their very selection by the household for emigration itself-and in organized, receiver-controlled programs, the validation of that selection by the recruiter-suggests that they are not particularly risk-averse and that they are likely to have many of the characteristics which would serve them and their employers well while abroad. In this regard, employers and authorities cooperate to deny contract and/or residence permits/extensions to those foreign workers who have shown themselves to be less than ideal workers, or who simply have not made the expected progress in adapting to the new social environment.
Whether the setting is segments of U.S. agriculture since the early 1940s. Europe in the 1960s and 1970s, the Gulf states in the 1970s and 1980s South Africa until recently. or East Asia during the last ten years, this cumulative selectivity assures foreign labor users of a supply of foreign workers who match the profile they value most. The sending countries, however are losing those among their young workers who are better endowed and who would thus be more likely to contribute most to their own countries’ development. Most studies of organized labor migration systems confirm that a majority of migrants have human capital characteristics that are superior to those of their home country’s population at large and that they are usually employed prior to emigration.
Studies of organized labor migration flows also note two additional attributes: the tendency for most countries to be involved simultaneously in more than one type or system of migration and the inability of countries with relatively meager supplies of qualified people to provide the right mix of incentives that wou1d entice some of those qualified people to stay home. As a result, most of the countries involved in the international migration system experience losses in manpower and skills that have been very costly to develop and might ill-afford to lose.
Of course, the "loss" is most consequential when the skills are difficult to replace. When that is the case a country confronts two problems. First there may be losses in output and capital formation due to inter-industry linkages, which may further reduce domestic employment (a rather rare phenomenon); and second, disruptions in production and lower productivity may result, as emigrating skilled and managerial talent is replaced by less skilled and less experienced individua1s who may offer lower quality services for higher unit-of-labor costs (a more likely, though still uncommon phenomenon).
In some cases, however, such a scenario is possible and can lead to unwelcome wage inflation, especially when a country is simultaneously involved in more than one type of migration, as has been the case with such states as Jordan, North Yemen, Egypt, and many Caribbean and Latin American states. In these cases, indiscriminate emigration can tap low and medium-skilled workers as well as highly trained manpower--that potentially can affect the momentum for development. In these cases, the absolute losses can have serious negative effects on development.
Finally there is an ethical dimension to this problem which must not go unnoticed. While one must acknowledge the relevance of such concepts as opportunity costs, surplus brain power, and the right to emigrate as a basic human right the emigration of high level manpower from the less developed to the advanced industrial countries constitutes a drain in expensive, and at times scarce, human resources—a subsidy of the rich by the poor. As such, emigration of highly-skilled workers can increase the fundamental asymmetry between less developed and more advanced countries.
The Geography and Political Economy of Return.
Because migration involves a high degree of age and sex selectivity, it can alter regional demographic profiles, skew sex and age cohorts. and lead to emigration-induced high dependency ratios. Furthermore the emigration of a village's or small town’s younger and more progressive members may have significant implications for the social organization and power relationships in the life of such villages and towns by allowing the preservation and further entrenchment of antiquated social and power structures.
But what of return migration? The migration process cannot be fully evaluated from the perspective of sending societies without a serious look at return migration. For return migration to have a positive developmental impact, two conditions must be present: first the return of a critical mass of successful migrants and, second, the success of sending societies in taking the first steps toward making the structural social and economic adjustments which are the sine qua non of sustained development. Only then can return migration make a positive impact beyond the migrant household into the immediate community and beyond.
The review of the vast literature on this topic offers often conflicting evaluations of such impacts. The reasons are complex and are often tied to the types of return one is likely to encounter in each specific migration flow. Unplanned returns--such as those associated with mass expulsion changes in immigration laws plant closings, or protracted economic recession in the host society-are the least likely to lead to lasting positive consequences for the migrant, his or her household, and the broader community. Voluntary returns after relatively short periods abroad. motivated by family considerations and/or the inability to adapt to the new environment, are also likely to be largely inconsequential to the home country. It is thus the longer--term and more successful migrants, who choose to return for a combination of reasons--including special repatriation inducements and programs and success in reaching human capital enhancement and savings’ goals abroad, and/or investment goals at home--that carry the greatest potential for personal success upon return and possible community and larger society gains.
Despite the large. though often dated, body of literature about the effects of return migration on development in most of the world's regions, the North American region is in many ways under-represented. Additional research is needed for example, to test the effectiveness of incentives to attract returned migrants to their areas of origin through such programs as set-asides for relocation. assistance with setting up small businesses of types and in areas where they are needed the most, and related activities. In addition. the effectiveness of incentives intended to attract remittances through such programs as preferential exchange rates, special foreign---currency denominated bonds, and foreign currency accounts may also be worth exploring. The study of the effectiveness of these incentives is no mere academic exercise if the objective is to channel the energy of return migration toward the development of home countries.
In particular. return migration may be able to help set into motion local processes of change which eventually help accelerate development. The emphasis on local processes is important because evidence from many regions where emigration has been significant suggests that many migrants opt to return to their own rural and small town communities rather than remain in densely populated urban areas. This appears to be the case regardless of whether they emigrated directly from such communities or with an intermediate stop in a larger city. As a result, in order to understand more fully the effects of the overall migration process, one must examine the linkages between returns. on the one hand, and changes in these communities' social, economic, and political power structures, on the other.
The propensity of returned migrants to engage in small-scale service and informal sector activities has also generated some controversy. One school of thought views this propensity with alarm--specially when a country's tertiary and informal sectors are felt to be inflated and thus “distorting” even "parasitic." Many students of the return migration process view tertiary and informal sector activities in this manner. Another school of thought, however, views informal sector activities with considerably less anxiety and sees in them not only the means of survival of large numbers of a society’s least fortunate members, but also a breeding ground for entrepreneurial activity where the seeds for further development are sown.
This debate does not need to be engaged here to appreciate that some of the small-scale service activities in which returning migrants often engage in--or their remittances energize--play important social and economic roles, both in their own right (as with the establishment of rural transportation systems, for instance) and in their effect on maintaining and expanding the middle classes by providing basic services at affordable rates. Furthermore, most of these activities may in fact be neither vestigial, nor anachronistic. Rather they can be dynamic developments that play crucial political and socioeconomic roles.2
The impact of returnees on social and political change has tended to be discounted particularly in the extensive literature on recent European (“guestworker") migration. Yet. a significant and regular return flow clearly strengthens the cumulative potential for change as the returnees’ relatively “modern" outlook first clashes and then meshes with tradition. There are very few studies that directly support this optimistic perspective. Part of the reason may be that anthropological studies have focused more on the effects of emigration than of permanent return migration on rural and small town communities. An even larger part of the explanation, however, might point to the assumptions of migration researchers in the largest migration research region-North America, where the assumption is one of permanent migration-and the dominant role that
economic and structural sociological explanations have played in defining the migration research agenda.
For instance, one can infer from the literature that most migration economists and sociologists assume that return migrants have little interest in engaging in such traditional economic activities as agricultural production. This assumption has often been based as much on surveys which have found that migrants intended to return to major cities (many such surveys are taken as migrants are about to leave for abroad) as on anecdotal reports that returnees. as a result of their social and economic mobilization while abroad, would return as aggressive entrepreneurs and skilled industrial workers. Since entrepreneurship thrives most readily in larger cities, and industry is typically concentrated in and around the largest cities, it has simply been assumed that return movements would only continue and accelerate the patterns of internal migration toward large cities. The obvious growth of such cities may provide all the “evidence" one needs.
The macro-economists' frequent focus on aggregate measures and effects, and their inclination to “assign” to returnees an economic rationality based on assumptions about skills gained while abroad, and the structural sociologists' penchant for painting with a large brush on a world canvas, have probably reinforced each other's expectations about patterns of return migration. These expectations, however, are frequently not borne out. Substantial proportions of migrants opt to return to their initial points of origin and many continue to engage in some form of agribusiness--if not farming itself.
While all the evidence is not yet in, when the predictions falter it tends to be the result of two related "failures”: paying inadequate attention to the motivations of migrants in the first place, and failing to stay in touch with migrants during their entire migration cycle. As a result, reliable evidence about the plans for or effects of return migration tend to be relatively scarce. The evidence which is available, however, suggests that there is more return migration to rural areas and small towns than much earlier research had anticipated and that the prospects for such return having at least a modest developmental impact are substantial.
I will say more about the latter in the discussion about the impact of remittances and returnees themselves later in this essay. At this point, I want mainly to set the stage for that discussion by pointing out that the adverse demographic trends to which migration often gives rise are not irreversible, that return to rural and small town communities does take place, and that such return can have some discernible local developmental effects. Whether these usually modest changes amount to more than a marginal impact on national development will be taken up later. Here, it is sufficient to reiterate that a return movement has a better opportunity to become an important agency of change if the return is at the migrant's initiative (rather than as a result of politically or economically motivated expulsion), is to the community or region of origin and is a part of a regular return flow. Furthermore, return accomplishes more if returnees have maintained an active interest in the affairs of the community, reinforced both by regular visits and through the proxy of an activist family. Finally, once a tradition of return is established (where only one of emigration existed before), if returnees are to become architects of the transition in social, economic, and political power relationships, they must show both financial success abroad and financial responsibility upon return.3
The Skills of Return Migrants.
The literature generally shows that labor-sending countries tend to overestimate both the degree to which their nationals acquire new skills or enhance their old skills while abroad and the effects of such skill acquisition/enhancement on the country’s development upon their nationals' return. An optimistic set of expectations about such effects is clearly an essential part of the mythology of migration. For instance, though emigrant workers are often exposed to the discipline and rhythm of industrial life, such “qualifications" are only a passive byproduct of the experience abroad and in many cases, migrants have already received such exposure prior to emigration.
With regard to the enhancement of existing skills and/or the acquisition of new technical skills, the myth often confronts an unpleasant reality at various levels. The labor markets of most receiving countries (with the exception of some of the work required by oil-producing states) do not usually need indiscriminate infusions of skilled workers.4 Rather, they need worker's who are
able to perform mundane services, agricultural work and repetitive tasks at the lower end of often highly articulated industrial jobs hierarchies. Thus, employers have few incentives to offer most foreign workers either skill-enhancement opportunities or formal technical training, and both practice (in all regions except perhaps Europe and North America) and laws (such as in the South African migration system before the fall of the Apartheid system) make this clear.
Furthermore, even in cases where technical skills are acquired, one or more of the
following is likely to occur. First, the worker may be reluctant to return home because of his or her superior social and economic adjustment into the host society. Ironically, such adjustment, by leading to occupational advancement and increased economic rewards-and the accompanying social acceptance-makes such workers attractive to receiving societies as permanent immigrants and makes return even less likely. Second, if a worker does return he or she may be reluctant to engage in industrial work. The evidence on this includes much of the experience of countries that have supplied Europe and the Gulf states with temporary labor. Clearly if a worker has acquired substantial new skills and holds a responsible position abroad, but nonetheless decides to return, he or she is likely to be unwilling to work in the borne country under remuneration and working conditions that are sharply inferior to what he or she has experienced abroad. Subsidiary, but often equally important, reasons for eschewing industrial work upon return are that long term migrants may no longer be interested in the vigor of industrial work, may feel that they have “paid their dues” may prefer the independence of owning their own businesses, or may simply be interested in semi -retirement.
Third, even if the worker is neither reluctant to leave the host society nor to engage in industrial work upon return, the skills that he or she might bring home may be of little direct relevance to the country of origin, which may lack the type of technologically advanced heavy industry that could make the best use of such skills. (One must add to this scenario the possible reluctance of the home country’s industrial management to offer responsible positions to returnees for fear that their exposure to syndicalist ideas while abroad might “contaminate” other workers.)
As discussed previously, the human capital characteristics of individual migrants their legal status and the migration stream of which they are a part strongly influence their success in the receiving society. This success often measured in earnings can impact the sending community if they lead to a steady flow of remittances. The propensity to remit and the use to which remittances are put are influenced strongly by such factors as opportunities for family unification and permanent settlement abroad. The more accessible these opportunities, the less regular the remittances are likely to become--practically drying up when specific investment goals back home have been met and the decision to settle abroad is made.
While the size of remittances is shaped by the interaction of many variables their
disposition conforms closely to the individuals and the household’s original goals for emigration. Type of migration again plays an important role in the area of remittances. Mobility migration is presumed to be more important than survival migration. Mobility migrants not only earn more, they are also more likely to have higher human capita] characteristics before migration and to be able to take advantage of, or initiate. opportunities to enhance those characteristics while abroad, at the same time, however, they are also more likely to be offered opportunities to stay abroad, which can gradually dry up remittances.
If the question of skill acquisition/enhancement, and the use of these skills to enhance the development of sending countries does not allow unequivocal conclusions. the question of the use of remittances and transferred savings also lends itself to few definitive answers. The dispute here is not so much about the contribution of remittances in relieving some of the sending countries' balance of payments imbalances nor about the contribution of remittances to capital formation and a country’s per capita national income. These contributions are indeed significant. A number of authors have juxtaposed the size of annual remittances for major labor exporters against such yardsticks as total invisible receipts, merchandise exports and imports, and foreign aid receipts. Reviewing such aggregate figures reveals why remittances are prized—even when they are much less than they are in the extreme case of Lesotho where, in the early 1980s they regularly exceeded that country’s Gross Domestic Product! Remittances over the past 25 years have in fact become a massive “redistributive” mechanism from rich countries to poor ones. The following data place the size of this transfer in perspective. The annual flow of worker remittances to migrants families and communities in recent years is estimated at about $ 70 billion worldwide and at about $5.7 billion in the Latin America/Caribbean region. Yet the net developmental gain to sending societies from this massive redistribution is far from clear cut.
While the ultimate disposition of these funds will determine their overall social and
economic impact on the sending societies, there is no denying that, at a minimum, remittances expand the capacity of the national banking system significantly by augmenting the supply of loanable funds for both infrastructure development and production expansion. Furthermore, by stimulating demand for such funds, remittances lead to increasing levels of real capital formation.
Finally, to the degree that a good share of the remitted funds are used to purchase locally produced goods and services, they can expand existing production facilities and stimulate local employment and investment.
It is obvious, however, that this is only a one-dimensional view of remittances. To
appreciate how remittances affect the overall structure of a remittance-assisted country one must determine whether or not such funds are used productively whether such uses are linked to other processes and larger social and economic activities, and whether and how these funds affect the living standards of the migrant household and the community’s income distribution.
Research on remittance use in a number of countries shows investment in housing and land purchases leading the way among migrant expenditures often accounting for as much as three-quarters of total funds. The remaining funds tend to go toward purchasing consumer goods, the retirement of debts and other family-centered activities. Usually, only a small fraction of the total goes into financial instruments or toward investments in such productive activities as the purchase of agriculture equipment and the financing of service-sector activities (e.g.. opening small stores and service stations, or purchasing buses, trucks, and taxis). Spending patterns make clear that individual and societal goals often diverge. Migrants use their earnings in ways essentially consistent with their goals for emigration. Yet such spending behavior may result in unintended adverse economic and social consequences--such as price distortions or the creation of a new system of social stratification along the lines of migrant and non-migrant households.
First, investments in housing can distort local real estate markets. lf done on a large-enough scale, they can inflate wages and building materials in the entire building sector. Housing construction has a complex relationship to multiplier effects: it leads to high demand for building materials, but many of these items may have to be imported. At the same time, although construction can have a low social rate of return, it has high multiplier effects. These effects however, may be temporary--i.e., they tend to dissipate once a project is completed. Thus hyperactive construction sectors in what are otherwise sputtering economies may distort labor and material costs. They can also exacerbate social and economic inequalities as a hyper-inflated real estate market places the building of a house--or the purchase of land--beyond the reach of many of a society’s citizens. While these may not be of concern to larger economies, they can be significant in smaller ones.
Second, the propensity of members of migrant households to purchase consumer goods with relative abandon in what are typically limited markets can lead to broad demand-pull and, gradually, cost-push inflation along a country’s entire economic structure. In many countries, migrant remittances are not substantial enough to have that effect on internal markets. However, in some countries in the Mediterranean littoral, some of the Caribbean and Central American countries. and the emigration-dependent countries of Southern Africa inflation is clearly fueled by remittances.
Third, remittances can lead to an increasing demand for luxury imports to satisfy the consumption appetites of families of emigrants for advanced products. In some instances, this can lead to similar behavior by non-immigrant households who have their consumption aspirations raised via the demonstration effect of the behavior of remittances-assisted households (A corollary to these changing consumption patterns is the inflation of the economic and psychological value of foreign products-and the concomitant depression of the value of domestic goods-and the increasing allocation of foreign currency reserves to import the former.)
In other words, the way migrant households spend their earnings is consistent with their reasons for participating in the migration process in the first place. Such spending certainly improves the living conditions and often even enhances the overall social and economic status of migrant households. Such status enhancement appears to be related to these households’ propensity to invest in building houses, setting up small businesses, and purchasing not only prime agricultural lands, but also farm machinery, improved seeds, chemical fertilizers, insecticides, and the like. If these investment choices are to have a pronounced cumulative impact, however, they must increase farm productivity, create employment for both non-migrant household members and hired labor and, in the long run, contribute significantly lo the social and economic transformation of agrarian societies. 5
It should be obvious from this analysis that the casual coincidence of interests between labor-scarce and labor-surplus societies gave rise to a buoyant-almost reckless-enthusiasm for both organized and spontaneous migration flows. Hindsight, however, shows that migration is as much an offspring of necessity as of expediency. As such, and without constant tending, it is transformation of the sending countries. It does, however, affect the lives of migrants, their families and many sending communities, especially in terms of their own social organization of production.
The migration process clearly contributes to the survival and, at times. the dramatic improvement of the material well-being of migrant households (and to the profitability of private capital). Outside of this effect, however, the major structural contributions of the migration process may be to facilitate the progressive disappearance of national boundaries for labor and to transform labor into a structural component of the international, rather than the national, political economy.
Most labor-sending countries are now aware that obtaining the expected returns on their “investment” in emigration without the expenditure of significant effort will be elusive. Such passive dividends as some relief from unemployment and the repatriation of substantial funds have indeed materialized. However, emigration has not provided an easily measurable developmental impetus for most of the countries involved in it. In fact where large-scale emigration has coincided with substantial development, the basic ingredients for development have apparently predated the massive temporary emigration of labor. Among such ingredients have been the following: a large and diverse economy; a large and relatively modern agricultural sector (that would not be starved for labor as a result of emigration); an already socially and politically mobilized population, a relatively effective private and public administration; a large and relatively modern infrastructure; and a financial system capable of channeling remittances to the private sector efficiently.
This is not to say that most migrant-sending countries have received insignificant benefits from emigration. Certain]y, and at a minimum, the economic progress of many of these countries has been influenced significantly by the vast money transfers which have highlighted the migration process. Yet, such transfers do not appear to have played a major measurable role in the overall development of these countries. They have, however, obviously played leading roles in the agricultural mechanization so evident in the countryside of many sending countries and they have been responsible for the equally noticeable housing boom, the proliferation of small service establishments, and the growth of tourist-related infrastructure. In short. the process has accomplished at least one important set of goals: it has significantly improved the economic fortunes of many of the families who se members have emigrated and, in some instances and under the conditions discussed earlier, the fortunes of small communities.
What is important to focus on both analytically and in policy terms, however, is the missed opportunities and the avenues by which sending societies may increase their benefits from migration. First, sending countries must have better access to the markets of the receiving countries. Diaz-Briquets (1991) perceptively pointed out that the worst consequence of a severe recession in a receiving country's economy may not be the return flow itself but the losses in the broad array of economic contacts between the two countries. The problem is felt most acutely in border areas throughout the Americas, where mutually dependent binational communities have flourished. This problem is also evident in the situation involving migration to the Gulf states.
Second, receiving nations must provide more systematic support to certain types of investment initiatives by returned migrants. This course of involvement might ease criticism about the level and terms of development assistance, while also assisting sending countries with employment-creation and helping fill their technical and/or managerial voids. Several prototype programs along these lines exist in Europe. The Federal Republic of Germany, for instance, has had such programs with Turkey, Yugoslavia and Greece; France has attempted several variations of such training programs with Algerians, Spaniards and Portuguese; and the Netherlands offers similar programs to nationals from ah of their labor suppliers. The impacts of these initiatives have been predictably modest. Although the total funds committed have been significant the total numbers of those involved in these programs have been small, and the management failures and difficulties in securing long-term and sustained financing has made for few truly successful projects. Al the heart of this only modest success, however, lies the fact that sending countries have made few concerted efforts to assist with emigrant-led employment-generating investments. Although the literature reports many isolated instances of such assistance they are not usua1ly integral parts of a comprehensive development strategy.
Two other key areas where public intervention might still allow sending societies to benefit more from migration are in the use of remittances and return migration. As sending countries gain a fuller understanding of the forces impacting upon the development process, initiatives designed to integrate remittances and returnees into their economy and society will increase. Reception and reintegration services for returning migrants and their families must be instituted or expanded and must offer returned migrants reliable relocation and labor market information as well as a full array of educational services for returning children if they are to attract migrants back who in turn may contribute to development. Channeling remittances and influencing the relocation choices of returning migrants makes obvious the following important point: the contribution of labor migration to the development of a migrant’s country is directly related to that economy’s size, sophistication, diversification and to the quality of immigrant-origin society’s overall social physical, and administrative infrastructure.
What may be needed first, however is a better understanding of how each country fiits into an increasingly interdependent world and an understanding of the challenges and responsibilities which migration creates for nations at both ends of the flow. In view of such shared responsibilities, migration becomes a matter virtually impervious to satisfactory intervention by exclusively unilateral action.
The importance of this point can be seen in a number of contexts. For instance although receivers can manipulate the labor inflow valve with some success, they have been quite unsuccessful in significantly influencing the return flow. If, on the other hand receiving countries were to understand that return migration is often a “non-economic” decision (where social and family reasons are preeminent) they might then reap more handsome dividends in the long run. They could offer labor-sending countries assistance in such areas as education, investment ventures in infrastructure improvements, and employment-generating activities. Such initiatives might in turn bear fruit because they recognize an often forgotten dictum about migration: that the home community often remains a primary reference point and a principal determinant of behavior for the migrant. Longer-term migrant workers are those most likely to have gained residence rights, to be in occupational competition with native workers, and because of family reunification, to be perceived as placing a burden both on infrastructure and social services. This group might be tempted to return home if such initiatives were in place.
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1 Another frequent essential misunderstanding is the assumption that the motivation and goals of private individuals (the emigrants and/or their families and households) will be compatible with those of their country or, for that matter, with the calculations of public and private sector managers and planners whose actions affect “development" most fundamentally).
2 Nevertheless, the positive impact that return migrants have on their sending societies should not be exaggerated and must be weighed carefully.
3 The fact that few return movements exhibit more than a few of these attributes might help explain the difficulty researchers have had in discerning the developmental impacts directly associated with migration flows that have not yet reached full maturity.
4 Beyond the need for multi-national firms to move technical and managerial personnel across their operations at will, skill needs tend to be highly specific and tend to change over time. This remains valid despite the fact that the U.S., Canada Australia, and New Zealand engage in substantial skilled labor programs.
5 Massey and his associates have found different traces of such a propensity for change in four communities in Mexico. However, one should be cautious of overgeneralization from these cases. The reason is that these communities shared one unique characteristic: their sons and daughters had been thoroughly immersed in the Mexican/ U.S. migration stream for more than a generation. That relationship had in turn created thriving binational mother/daughter communities between Mexico and the United States. Massey and his associates report that many migrant members of these four Mexican communities had remained socially and economically imbedded in Mexico and had treated work in the United States as simply necessary for improving their economic life in their home areas. When viewed in these terms, the social and economic behavior of returning migrants is rational, as is the fact that emigration often helps most those who engage in it to accomplish such goals.