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A greater impact of labour mobility on development

The formulation of policies linking migration and development is based on the idea that it is possible to enhance welfare in migrant-sending countries through the efficient management of international movements. Over the last two decades sending countries have accordingly tried to place migration into the mainstream of their development strategies, by focusing policies on the accumulation and repatriation of three kinds of capital:

  • Financial capital, through policies aimed at lowering the costs of sending remittances, and channelling them towards productive investment;
  • Human capital, through policies intended to promote the temporary and permanent return of high-skilled migrants, and the participation of scientific diasporas in transnational networks or research projects;
  • Social capital, through co-operation with hometown associations (HTAs) to attract collective remittances, used to finance local initiatives, particularly infrastructure and educational projects.

In parallel, a number of OECD countries, such as France, the Netherlands, Spain and Sweden, have included migration in their international co-operation strategies (see Chapter 2). Most of these policies aim at:

  • Fostering productive investment, by increasing the financial capacity of future investors and strengthening their entrepreneurial skills;
  • Promoting temporary and circular migration, with the idea of providing flexible labour that adjusts to industrialised economies' needs, but also of maximising the contribution of migrants to the development of the community of origin;
  • Encouraging return, not only through financial aid but also technical assistance and training programmes.

Previous publications from the OECD Development Centre (in particular, OECD 2007a and 2007b) analysed policies linking migration and development in detail, highlighting the benefits but also the potential shortcomings. In this book, we focus on one specific aspect of the migration-development nexus, namely the impact of emigration on labour markets.

As described in Chapter 4, the emigration of part of the labour force impacts the home country's labour market in two principal ways. First, the departure of a productive household member has a net negative impact due to the direct loss of labour. Second, remittances have a net positive effect, by increasing household income. In many developing countries, these effects are amplified by the fact that the population is essentially rural and that migration is primarily regional. The lost-labour effect is thus considerable while the remittance effect remains limited.

The main objective of public policy should therefore be to optimise the impact of labour mobility on development, effectively minimising the negative impact from lost labour and the positive impact from remittances. To this end, this section is centred on four main priorities (Figure 5.4): i) the consolidation of labour markets; ii) the accumulation of human capital; iii) the promotion of financial democracy; and iv) the strengthening of social cohesion.

 
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