6 Special reportMigration The EconomistNovember 16th 2019
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he roadto a better life is full of pot-holes. Fourteen years ago
Listi Dewi, Idrus’s older sister, saw an advertisement for a job
working in a restaurant. Her family needed money and the recruit-
er made golden promises. So she took a long bus ride from her vil-
lage in central Java to a town near the Indonesian coast.
It was not what she expected. Instead of starting work, she was
locked in a dormitory surrounded by a fence and cctvcameras.
She was told she had to learn English, cookery and housework. She
told herself that perhaps this was part of the training.
After two months the recruiters revealed that she was going to
be a maid in Singapore, a nearby island-state that is 15 times richer
than Indonesia. If she refused, she would still owe them an impos-
sibly large sum for her training and rent, they said. So she went.
The agents took her first nine months’ pay to settle her “debt”.
But then things began to look up. Her first employers in Singa-
pore, a traffic cop and a telephone-company employee, were “very,
very nice”, she says. For the second job, she cut out the unscrupu-
lous middlemen and went straight to a Singaporean recruitment
agency, which found her the first of a series of good employers.
She now washes, cooks and cleans for two teachers, and looks
after their children. The pay is good, she says: S$700 ($500) a
month, plus bed and board in their comfortable flat with a shared
swimming pool. Since she has few living expenses, she can save or
send home most of her wages.Hundreds of people in each room
The costs and benefits of low-skilled migration are complex. The
migrants themselves benefit—otherwise they would not leave.
Those who employ them benefit. Those who compete with mi-
grants for jobs may not be so lucky. Some studies have found that
unskilled migration drags down the wages of unskilled locals. But
this effect is small, if it exists at all. George Borjas of Harvard, an
immigration sceptic, finds that immigration reduces the incomes
of native-born American high-school dropouts by 1.7%. Giovanni
Peri, a pro-immigration economist, finds that it actually raises the
wages of this same group by 0.6%. Both agree that for native work-
ers as a whole, the effect on wages is mildly positive.
That is partly because native-born workers can do things that
newcomers cannot, such as speak the language fluently and navi-
gate local institutions. When lots of low-skilled immigrants arrive
and start doing manual jobs such as cooking, cleaning and build-
ing, the native-born often respond by moving into higher-status
jobs, such as managing the migrant workers.
Migrants often do jobs that natives shun, such as picking fruit,
dishing out parking tickets or caring for the elderly. This reduces
what locals pay for fresh strawberries, orderly streets and nursing
homes. Admitting an unskilled migrant can even increase the sup-
ply of skilled labour. Abundant foreign nannies and cleaners make
it more likely that college-educated native-born women will go
out to work full-time—as Listi’s employers both do.
Amandine Aubry of the oecdand others looked at all types of
migration (skilled and unskilled) from developing countries to
rich ones. They estimated that 83% of native-born workers benefit-
ed materially from it. They did so mostly as consumers, since mi-
grants improved the variety, quality and price of goods and ser-Labourers and loved ones
When a worker migrates, a family benefitsLow-skilled migrants
Allison Harell of the University of Quebec found that voters are
more tolerant of immigration if they feel that their country is in
control of its borders. This is easier for island-states like Australia
and harder for those, such as the United States, that share a long
land border with a developing country. When people think the
government has lost control of its borders—as they did in Ger-
many during the refugee crisis of 2015-16—they grow more hostile
to migrants. Voters will support higher levels of immigration only
if the process by which they are admitted is orderly and selective.
They want to choose whom they let in—which is why footage of a
“caravan” of thousands of Central Americans marching north-
wards and demanding to be let into the United States is probably a
vote-winner for Mr Trump.
A different worry is that if all rich countries copied Australia
and poached the best foreign talent, poor countries would end up
even poorer. It is immoral to cause a “brain drain”, goes the argu-
ment, because if all the doctors and engineers leave Liberia or
Honduras, sick people there will die and bridges will fall down.
This argument is too simplistic. Migrants send money
home—a lot of it. An engineer who makes $7,000 a year in Zambia
might make $70,000 in America and send back more than the en-
tire amount he used to earn at home.
Migrants also stay in touch with their home countries. Some
spend a decade or two abroad, and then go back to start a business
with the knowhow they have acquired in a more advanced country.
That is, roughly speaking, how the Indian information-technol-
ogy industry started. Mukesh Ambani, India’s richest industrial-
ist, is a Stanford drop-out. Jack Ma, the founder of Alibaba, China’s
biggest e-commerce firm, found out about the internet on a trip to
America. A study by the Kauffman Foundation, a think-tank,
found that two-thirds of Indian entrepreneurs who return home
after working in America maintain at least monthly contact with
former colleagues, swapping industry gossip and sharing ideas.
What is more, the lure of earning big money overseas changes
the incentives for people in poor countries. It prompts more of
them to get educated and acquire marketable skills. Having ac-
quired these skills, many who intended to emigrate never do, per-
haps because they fall in love or their parents fall sick. Many who
do emigrate, ultimately return. A study by Frédéric Docquier and
Hillel Rapoport concluded that “high-skill emigration need not
deplete a country’s human-capital stock”—and if well handled,
can actually make the sending country richer. Big countries such
as India, China and Brazil would benefit handsomely from send-
ing out more migrants. However, once a country starts losing more
than 20% of its university graduates, as some small African coun-
tries do, it starts to be a drag on growth. 7Boffins without borders
Share of inventors who are immigrants in selected OECD countries, %
2016Source: World Bank0 10 20 30 40CanadaAustraliaBritainAustriaNetherlandsNew ZealandUnited StatesBelgiumIrelandSwitzerland