Relaxing immigration rules by just 3% in developed countries would generate more than $150bn for the world’s economy.
Leading economist Professor Sharun Mukand, from the Centre for Competitive Advantage in the Global Economy (CAGE) in the Department of Economics at the University of Warwick, presented a policy paper this week at Chatham House in London.
Professor Mukand said: “As a tool for development and poverty reduction, the potential gains from the globalisation of labour far outweigh those from foreign aid or the liberalisation of trade and capital flows across borders.
“Economists and policy-makers should devote more attention to the practicalities of relaxing barriers to international labour mobility.”
He argues that policies should be designed to address voter concerns about the threat to culture and national identity. He said: “Temporary migration with an appropriate set of carrots and sticks can be a big step in the right direction.”
Given the huge rewards from a successful program, he urges that policymakers should not seek a one-size-fits-all solution, but should experiment with alternative ideas.
Professor Mukand said the increase in peoples’ life expectancy, coupled with a decline in fertility, made it more difficult than ever to sustain social security and pension systems in the developed world. A shortage of working-age population will put a huge financial strain on the world’s economy.
He added: “Something will have to give, and one possible solution out of the problem is to increase the influx of working age migrants from developing to developed countries.”
Professor Mukand’s paper is called ‘International Migration, Politics and Culture: the Case for Greater Labour Mobility’.
A copy of the paper is available at http://www.chathamhouse.org/publications/papers/view/186357