The economic effects of labour immigration in developing countries

Abstract

This paper reviews existing theoretical and empirical evidence on the economic effects of immigration in developing countries. Specifically, it discusses how immigration may affect labour market, entrepreneurship, human capital, productivity, economic growth, the exchange rate, trade, prices, public finance and public goods in host countries. As the majority of the relevant literature has traditionally focused on the experience of high-income countries, the review highlights the unique context of developing countries and elaborates how outcomes may be similar or differ in low and middle-income countries. A general conclusion is that the economic effects of immigration to developing countries, a numerically important phenomenon, warrants additional theoretical and empirical research.