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The Economics of Migration

Many economists consider the allocation of human resources relatable to any market in general, asserting that by pursuing self-interest, efficiency, overall output and welfare will be maximised, at least to some extent. The latter reasoning would lead to thinking that by fuelling competition in the job market, there will be more struggles for locals whose jobs will be replaced by immigrants. While this may be partly true, researches show that in most cases immigrants create more jobs than the ones they disrupt, or some of them take up positions that locals are not willing to accept (for example janitors, housekeeping cleaners, taxi drivers etc.). Make sure to watch this video from The Economist.

According to a UN estimate, in 2019 there were 272 million international migrants worldwide, representing 3.5% of the global population. While for many people that may be a choice for undertaking a life experience abroad, 70 million people worldwide were forced to flee their birth countries due to unbearable living conditions. The UK may be an excellent example to show the benefits of well-managed immigration. While in recent years they were among European countries which faced the highest immigration rate (they now represent about 7% of the workforce), its employment rate is at the highest levels ever recorded, and there have not been backlashes for UK natives even in the short term.

But despite the countless resources which back open immigration policies, the public (and especially politicians) are wary undertaking such choices. The well-known wall on the border between Mexico and the US sparked outrage all over the country (and the world as well), in addition to being one of the main political standpoints throughout President Trump political career. While that helped him to ensure the support of more radical Republicans, that also causes him to detach even more from those who did not back him, jeopardising the support from a broader political spectrum.

Something similar happened in Italy in recent years, while the right-wing League led by Matteo Salvini was still in power: while being Minister of Internal Affairs, Mr Salvini pursued a battle against all incoming immigrants boats from Africa (the vast majority was from Lybia), not allowing them to set foot in Italian waters. He justified himself by pretending more help from the European Union, especially concerning the respect of some immigration laws which require every country of the EU to be assigned incoming immigrants, independently from their arrival port. However, when asked to comply with EU rules, most states still refused to fulfil their duties, leaving Italy to manage the overwhelming situation (rendered challenging by economic difficulties and lack of infrastructures) while receiving 67% of EU’s arrivals. It is to be underlined that the overall number of immigrants significantly reduced during the last years. In his speeches, it was impossible not to hear ‘’Prima gli Italiani!’’ (‘’Italians come first) from Mr Salvini.

Another issue concerns the so-called ‘’brain drain’’ from poorer countries, which are allegedly made worse off by the exodus of people exiting the countries. Michael Clemens, an American economist and researcher for the Centre of Global Development, states that the outflow of people benefits poorer countries: up to now, there is no evidence that any country in the country ever benefited from trapping people within its border. Moreover, when people are allowed to pursue their life plans abroad, they may come back in their native country more experienced than they used to be, thus more able to contribute to the economy. On the other side of the coin, the fear that immigrants may steal jobs in wealthier countries, there is much to say as well. Giovanni Peri, professor of economics at the University of California, has long been studying the problem of immigration, and he states that immigrants do not directly compete with native peoples’ jobs. In fact, they are complementary: after immigrants arrive and take low-skilled jobs, natives are ‘’forced’’ to higher-paid positions, benefiting both.

Nevertheless, ‘’open’’ policies do not mean lack of control. While a solution for immigration from Africa to Europe may be partially resolved with more cooperation among European countries, the radical position of the current US government would face some more hurdles before accepting to being softened. The president supporters would not back more inclusive policies, and the president would be improbable to do it. The politicisation of immigration ends up being harmful to both sides: hosting countries which cannot exploit new knowledge/workforce and incentives for innovation, and the immigrants themselves who are forced to stay in unprofitable and often life-threatening environments.


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