Policy Coherence for Development 2007

Migration and Developing Countries

image of Policy Coherence for Development 2007

This edition of the Development Centre's annual report on policy coherence focuses on migration. The book examines the costs and benefits of migration for developing countries and how these flows can be better organised to yield greater benefits for all parties concerned -- migrant-sending countries, migrant-receiving countries, and the migrants themselves. It takes stock of what we know about the effects of migration on development, and distills from that knowledge a set of policy recommendations for sending and receiving countries alike. It draws on a large number of country and regional case studies co-ordinated by the OECD Development Centre to illustrate the mechanisms that link migration and development: labour-market effects, brain drain, remittances, diaspora networks and return migration.

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Economic Effects of Migration on the Home Country: A Simple Life-cycle Model

OECD Development Centre

It is impossible to generalise about the effects of migration on sending countries because the effects of emigration on their economies depend very much on their position within the migration cycle. Most emigration countries will pass through some version of the stages of this cycle. Emigration can affect growth and poverty reduction through three channels: changes in the labour supply, changes in productivity, and through migrants’ remittances. The net benefit (that is, benefits minus costs) of emigration is the sum of these three effects, and the relative importance of each channel varies over the life of the migration cycle. The five stages of the migration cycle are exit, adjustment, consolidation, networking and return. Some stages may be skipped or accelerated and return may coincide with immigration from other countries.

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