Migration and Development

Development is often a pressing issue on political agendas. It is common to hear

arguments about how development reduces or accelerates migration, but this approach
is one-sided. Development and migration are continuously shaping each other.

While it is reasonable to expect all forms of migration to impact development, I will

primarily discuss people who voluntarily move rather than those forced to migrate in the
interest of protecting their security. That means I will focus on the effects of migration
instances that are motivated mainly by work, study, or joining family members. Of
course, there are several reasons why people migrate, like persecution, violence,
instability, and more.

Economic motives for migration are widely referred to and studied as migration
motivators, especially in the context of development. In many cases, migration scholars
like Douglas Massey discussed development through an economic lens by defining it as
an "application of human capital to raise human productivity, generate wealth, and
increase national income." However, development is multifaceted. Development in
general can be described as a process of improving the overall quality of life of any
given group of people. That means that while development is often looked at via an
economic lens it is multi-dimensional, encompassing not only income or wealth but also
health, education, and more.

Some, like Nobel prize winner Amartya Sen, have discussed development as an
expansion of individuals' capabilities and rights. Now, this discussion of migration's
effects on development requires us to understand the mechanisms or ways in which
migration causes effects on development. Knowledge transfer, for example, is a key
way that migration can spread ideas related to development to different locations.

Two financial mechanisms, remittent sending, and investment create effects on migrant
origins. Another way migration can affect development is through the absence of a
person in the household or country. The absence of a person in a household might give
more space or freedom to other members of the household or might free up
employment for others. On the other hand, it could put additional pressure on household
members who stay behind because there are fewer people to help.

Active diaspora engagement can help to facilitate the positive mechanisms that help to
spur development. Now, let us take these mechanisms and apply them to a historical
case and then a contemporary situation to see how they generate effects on
development.

A key point in European history from the late 17th to the early 1800s was
industrialization. During this time, it is theorized that migration helped spread
industrialization internationally because immigrants from industrialized places utilized
knowledge transfer mechanisms to help accelerate industry in their destinations. These
out-migration trends were particularly from rural areas because industrialization initially
increased the demand for unskilled factory workers in urban areas.

This newfound abundance of laborers in rural areas drove rural wages up, plus the
arrival of new unskilled job opportunities in cities can be associated with increased
national productivity and development. Example, we can see how migration affects
development in both origin and destination countries. What we see is that migration and
development go together.

The international movement of skilled workers internationally represents brain gain for
the countries that reap their skills and experience and brain drain for their countries of
origin. On the brain-gain side of the divide, countries are increasingly looking to position
their immigration policies to attract the types of international workers and students
whose skills they desire. As the research presented shows, the development impacts of
losing educated workers are being assessed in immigrant-sending and receiving
countries alike.

Let us now look at different macro monetary flows that can affect development. Let us
first look at remittances, which are the money sent back to countries of origin by
migrants abroad. Next, we have a foreign direct investment (FDI), which is a direct
investment made by non-resident investors, essentially investments in an origin country
made by foreigners. Another important international flow of money is official
development assistance (ODA), defined by the OECD development assistance
committee (DAC) as government aid that promotes and specifically targets the
economic development and welfare of developing countries.

Remittances, FDI, and ODA are commonly compared about amounts and who benefits
since they all theoretically could impact development. Let us look at data from the World
Bank comparing total remittances, FDI, and ODA inflows for 2019 by world region and
national income level.

We can immediately see that the countries in the Middle East and North Africa, Sub-
Saharan Africa, and South Asia receive more money through remittances than foreign
direct investment. ODA, while substantially present in Africa and the Middle East, does
not overwhelmingly outweigh remittances in FDI among the global regions. In absolute
terms, ODA is dwarfed by FDI and remittances.

In remittances, since they are more directly related to migration than FDI, even though
migration can affect FDI positively also. Migration is sometimes identified as a factor
triggering FDI, but many investment instances also occur regardless of migration.
Remittances now make up a dominant source of cash inflow in global regions like South
Asia, Europe, and Central Asia.

If we rearrange our categories by national income level rather than geographic region,
however, we see that lower-middle-income countries as a group have more remittance
inflows than FDI or ODA. Migration appears to spur more cash flows via remittances to
countries, specifically those with lower-middle-income levels, and that outweighs official
development assistance and foreign direct investment.

Additionally, less directly tangible aspects of migration, like knowledge transfer, have
historically helped development spread internationally. This makes sense considering
the modern-day effects of migrant transfers.
Overseas Filipino Workers

Overseas Filipino Workers (OFW) is a term often used to refer to Filipino migrant
workers or people with Filipino citizenship who reside in another country for a limited
period of employment.

Filipinos have always been known for their strong work ethic. Therefore, many of them
choose to become overseas Filipino workers as the opportunities and wages are much
better than what is available in the Philippines. The lure of better pay and working
conditions often outweighs the dangers and difficulties associated with working in a
foreign country. Overseas Filipino workers also contribute to the Philippine government
through the taxes they pay. In addition, their remittances help to sustain the country's
economy.

Migration has become a common demographic response of Filipinos to various socio-

economic problems. Considering the severe economic crisis that has confronted the
country in recent years, the Philippines has become a major source of international
migrants and has become one of the largest sending countries of labor to various
countries in the world.

The effects of international migration are close to home for a top-sending country like
the Philippines. The Philippine Statistics Authority estimated that 2.3 million Filipinos
had gone abroad for employment as of 2017 (PSA, 2018). The average monthly
remittances per worker were 16,200 pesos for the six months preceding the survey.
This was likely an underestimate as the survey was conducted before the Christmas
season. Other countries in Asia are the predominant destinations, according to the
latest data from the Philippine Overseas Employment Administration (POEA). As of
2016, Saudi Arabia, the United Arab Emirates, Singapore, Qatar, Hong Kong, Kuwait,
Taiwan, Malaysia, and Bahrain were the top destinations for overseas Filipino workers
(POEA, n.d.).