The International Labour Organization (ILO) and the Organization for Economic Cooperation and Development (OECD) said negative perceptions of immigrants are often unjustified as their impact on labour markets, economic growth and public finance in developing countries is generally positive, although relatively limited. A joint report presented in Paris said developing countries, which host more than one-third of international migrants, need to do more to maximize the economic impact of immigration.
The Report said the perception that immigrants cost more than they yield is widespread but rarely relies on empirical evidence. The Report, How Immigrants Contribute to Developing Countries’ Economies, shows that negative perceptions are often unjustified. It points out that immigrants are no burden on the economies of host countries, and that in developing countries, their impact on labour markets, economic growth and public finance is generally positive although relatively limited.
“We have found that the limited impact of immigrants could mean that most countries of destination have not been sufficiently leveraging the skills and expertise that immigrants bring. Adequate public policies can plan a key role in enhancing immigrants’ contribution to their host countries’ development”, said OECD Deputy Secretary General Masamichi Kono.
Using both quantitative and qualitative methods, the Report examines empirically the ways immigrants’ presence affects ten economies: Argentina, Costa Rica, Côte d’Ivoire, the Dominican Republic, Ghana, Kyrgyzstan, Nepal, Rwanda, South Africa and Thailand. According to the findings, immigrants in most of the studied countries display higher labour force participation and employment rates than native-born workers. However, the quality of jobs immigrants take remains a concern as they often experience decent work deficits. The analysis also assesses whether the presence of foreign-born workers benefits or harms the employment opportunities of native-born workers: while the results are variable and highly contextual, the report shows that the overall economic impact of immigration is negligible.
The estimated contribution of immigrants to gross domestic product (GDP) ranges from about 1 per cent Ghana to 19 per cent in Côte d’Ivoire, with an average of 7 per cent across the ten countries studied. The contribution of immigrants to value added exceeds their population share in employment in five countries: Côte d’Ivoire, the Dominican Republic, Kyrgyzstan, Nepal and Rwanda. In countries where this is not the case, differences are small. Overall, immigration is unlikely to depress GDP per capita.
The analysis of how immigrants affect the fiscal balance and the quality of public services in developing countries shows that immigrants help increase overall public revenues. However, the increase may not be always sufficient to offset the public expenditures they generate. This is the case in two countries, Kyrgyzstan and Nepal, where the deficit is less than 1 per cent of GDP. In the other countries studied, the net direct fiscal impact of immigrants is positive but below 1 per cent of GDP. Overall, immigrants’ net fiscal contribution tends to be positive but limited.
“Any country can maximize the positive impact of immigration by adopting coherent policies aimed to better manage and integrate immigrants so that they can legally invest in and contribute to the economy where they work and live, while staying safe and living fulfilling lives”, said Manuela Tomei, ILO’s Director of Conditions of Work and Employment Programme.
The report illustrates five policy priorities for immigration countries to further enhance the contribution of immigrants to their economy:
• Adapting migration policies to labour market needs by facilitating entries and providing more legal pathways to labour migrants, so as to increase the share of immigrants with a regular status and formal employment. Closely monitoring labour market indicators coupled with developing consultation mechanisms, in particular with the private sector, can further support migration management systems.
• Leveraging the impact of immigration on the economy. Destination countries could consider policy interventions aiming to foster the employability of immigrants, encourage their investment by removing the barriers to invest and create businesses, and maximize the fiscal contribution of immigrants through supporting growth of the formal sector or expanding the tax base and contribution payments from the informal one.
• Protecting migrant rights and fighting discrimination. Public authorities as well as employee and employer organizations in destination countries should prioritize protecting the rights of immigrants and preventing all forms of discrimination and racism.
• Investing in immigrants’ integration. Policy measures should be put into use from the moment immigrants arrive, especially with the active support of local authorities, so as to foster social cohesion.
• Better monitoring the economic impact of immigration. It is important that developing countries invest in improving migration-related data collection as well as analyses of immigration’s potential impacts on the economy.
The Report is the result of a four-year (2014-2018) joint International Labour Organization-OECD Development Centre’s comparative project on Assessing the Economic Contribution of Labour Migration in Developing Countries as Countries of Destination that is co-financed by the European Union.