Do the Poor Really Benefit From Labor Migration?

Strong opinions abound on the issue of migration both in sending and receiving countries. But beyond the political discourse, labor migration is now central to the debate on international development and poverty reduction. Does the migration of workers have a positive development impact? What the evidence shows is that differences in productivity and wages across the world are so large that worker migration offers huge rewards to those who move into higher-paying locations. The development problem, however, is that migrant working programs in high-income countries tend to benefit skilled workers, while the poor and unskilled are left with virtually no point of entry into international labor markets.

How can this change? How can migrant programs increase access to labor markets by the poor and, therefore, have a larger impact on poverty reduction? This is precisely the question that World Bank Senior Economist Manjula Luthria explores in the most recent edition of Economic Premise, Labor Mobility for the Poor: Is it Really Possible?

She argues that the prospect of a temporary movement of persons (TMP) scheme, where the poor have limited and circumscribed access to developed world labor markets, could be part of the solution. But for that, a solid design, management and capacity building are needed.

"It is indeed possible to design TMP schemes that are win-win for sending and receiving countries," Luthria says. "A well-designed scheme can offer a real chance for the poor to participate in the benefits of greater globalization of international labor markets."

I really recommend you take a look at this Economic Premise on what's happening internationally on temporary movement of persons schemes, and how they can be improved to accelerate poverty reduction.

This blog was originally posted on the World Bank Insititute Growth and Crisis website.

Otaviano Canuto is the World Bank's Vice President for Poverty Reduction and Economic Management.