Evidence-based policy key to managing global demographic change, says World Bank/IMF report
Large-scale migration from poor to rich countries will be a permanent feature of the global economy for decades to come due to demographic changes, according to a new report published by the World Bank and the International Monetary Fund (IMF).
The authors of this year’s Global Monitoring Report argue that, while the changes present challenges, with the right evidence-based policies in place they could also provide an opportunity to end extreme poverty.
The report highlights that the global working-age population has peaked at 66% and is in decline, with the proportion of elderly people set to double to 16% by 2050.
But there is significant regional variation, with 90% of poverty concentrated in low-income countries that tend to have young, growing populations, while three-quarters of global economic growth is generated in higher-income countries with lower fertility rates and aging populations.
World Bank Group President Jim Yong Kim commented that: “With the right set of policies, this era of demographic change can be an engine of economic growth. If countries with aging populations can create a path for refugees and migrants to participate in the economy, everyone benefits. Most of the evidence suggests that migrants will work hard and contribute more in taxes than they consume in social services.”
IZA World of Labor author John Kennan has written about freedom of movement for workers. He argues that “for policymakers wanting to increase the welfare of the average person without regard to nationality, relaxing immigration restrictions could greatly improve the well-being of people in developing countries. And some of the large gains accruing to immigrants could be used to pay for whatever costs are imposed on incumbent workers—for example by levying an income tax surcharge on recent immigrants.”
Frédéric Docquier has also written for IZA World of Labor about the brain drain from developing countries. Observing that the impact of the brain drain on development can be positive or negative, he writes that: “Whether a country gains or loses depends on country-specific factors, such as the level and composition of migration, the country’s level of development, and such characteristics as population size, language, and geographic location. Policymakers should gauge the costs and benefits of the brain drain in order to design appropriate policy responses.”
Download the World Bank/IMF Global Monitoring Report 2015/2016 here.
Related articles:
Freedom of movement for workers by John Kennan
The brain drain from developing countries by Frédéric Docquier
Circular migration by Klaus F. Zimmermann
Who benefits from return migration to developing countries? by Jackline Wahba
Find more IZA World of Labor articles about migration, demography, and development.