Benefiting from highly skilled immigrants
requires a complementary mix of immigrant selection and economic integration
Studies for major immigrant-receiving countries
provide evidence on the comparative economic performance of immigrant
classes (skill-, kinship-, and humanitarian-based). Developed countries are
increasingly competing for high-skilled immigrants, who perform better in
the labor market. However, there are serious challenges to their economic
integration, which highlights a need for complementary immigration and
Proactive policies result in a better labor
Do migration policies affect whether immigrants
contribute more to public finances than they receive as transfer payments?
Yes. But simply accumulating the annual fiscal transfers to and fiscal
contributions by migrants is not sufficient to identify the policy impact
and the potential need for reform. What is also required is measuring the
present value of taxes contributed and transfers received by individuals
over their lifespans. Results underscore the need for, and the economic
benefits of, active migration and integration strategies.
Immigrants are good for trade
International trade and migration are two
important dimensions of globalization. Although governments have been very
willing to open their borders to trade, they have not been so liberal in
their immigration policies. It has been suggested, however, that a causal
positive link might exist between immigration and trade. Could governments
further increase international trade by also opening their doors to
immigrants? If they could, does it matter what type of immigrants are
encouraged? And is there a saturation level of immigrants after which this
positive impact disappears?
Business ownership is higher among immigrants,
but promoting self-employment is unlikely to improve outcomes for less
Immigrants are widely perceived to be highly
entrepreneurial, contributing to economic growth and innovation, and
self-employment is often viewed as a means of enhancing labor market
integration and success among immigrants. Accordingly, many countries have
established special visas and entry requirements to attract immigrant
entrepreneurs. Research supports some of these stances, but expectations may
be too high. There is no strong evidence that self-employment is an
effective tool of upward economic mobility among low-skilled immigrants.
More broadly prioritizing high-skilled immigrants may prove to be more
successful than focusing on entrepreneurship.
There is no evidence that increases in the
minimum wage have hurt immigrants
According to economic theory, a minimum wage
reduces the number of low-wage jobs and increases the number of available
workers, allowing greater hiring selectivity. More competition for a smaller
number of low-wage jobs will disadvantage immigrants if employers perceive
them as less skilled than native-born workers—and vice versa. Studies
indicate that a higher minimum wage does not hurt immigrants, but there is
no consensus on whether immigrants benefit at the expense of natives.
Studies also reach disparate conclusions on whether higher minimum wages
attract or repel immigrants.
Patterns of labor market assimilation for
married immigrant women are similar to those for men
What is the role of married women in immigrant
households? Their contribution to the labor market has traditionally been
considered of secondary importance and studied in the framework of temporary
attachment to the labor force to support the household around the time of
arrival. But this role has changed. Evidence from major immigrant-receiving
countries suggests that married immigrant women make labor supply decisions
similar to those recently observed for native-born married women, who are
guided by their own opportunities in the labor market rather than by their
spouses’ employment trajectories.
Poor paid employment prospects push minority
workers into working for themselves, often in low-reward work
In many countries, ethnic minority groups are
over-represented in self-employment compared with the majority community.
The kind of work done by minority entrepreneurs can therefore be an
important driver of the economic well-being of their ethnic group.
Furthermore, growing the self-employment sector is a policy objective for
many governments, which see it as a source of innovation, economic growth,
and employment. While self-employment might offer economic opportunities to
minority groups, it is important to understand the factors that underlie the
nature and extent of ethnic entrepreneurship to evaluate whether policy
measures should support it.
Despite returnees being a potential resource,
not all developing countries benefit from their return
Return migration can have multiple benefits. It
allows migrants who have accumulated savings abroad to ease credit
constraints at home and set up a business. Also, emigrants from developing
countries who have invested in their human capital may earn higher wages
when they return. However, whether the home country benefits from return
migrants depends on the migrant’s success in accumulating savings and human
capital and on the home country’s ability to make use of returnees’ skills
and investment. To benefit from returnees, home countries need policies that
encourage returnees’ investment and labor market reintegration.