MIGRANT LABOUR AND ECONOMIC DEVELOPMENT

Abstract

This discussion argues the following: that the movement of what has traditionally been termed migrant in and between developing countries can be important for development in a number of ways thus far given little or no atteniton in the literature; and the impact of labor movements varies greatly from country to country and area to area depending particularly on the length of absence of the laborer from his/her home area and on the similarities and differences between the economic and physical environments of the migrants home and the area or areas in which he/she works while away from home. The net effect on economic development of a particular movement of economically productive persons may be analyzed in terms of changes in production productivity and consumption in both the labor supplying (home) and the labor receiving (host) areas. Such changes may come about through variations in the relative supplies of productive factors in the volume of consumer demand in the home and host areas and through transfers of attitudes institutions and techniques of production. Movements of economically productive persons may help to induce changes in economic activities other than those in which they are directly employed. Both the direction and the magnitude of these effects are likely to vary from 1 pattern of migration to another. There appears to be an implicit assumption in the literature that whether or not the net economic effect is positive most of the impact on the supplying economy is negative. The economic impact of migrants is very much a function of the economic characteristics of the supplying economy and the host economies with which it is linked by migrants. Areas supplying migrants are likely to benefit from net additions to both human and physical capital from a widening of consumption expectations and horizons and from technological change especially after migrants return from the host economy. Whether or not these beneficial effects will be outweighed by decreases in output depends primarily on the extent to which migrants absences are coordinated with the structure and time pattern of employment opportunities in the home and host areas. Areas receiving migrants are most likely to benefit from low wages development of unused resources and the spread of new technology. Additionally they may gain entrepreneurs and additions to physical capital especially if some migrants settle permanently. Migrants may contribute to development problems by increasing inflationary pressures or by adding to social and political tensions but their presence may serve to stimulate production and investment in both the private and the public sectors.