Impacts of Temporary Migration on Development in Origin Countries

Abstract

Temporary migration is widespread globally. While the literature has traditionally focused on the impacts of permanent migration on destination countries, evidence on the effects of temporary migration on origin countries has grown over the past decade. This paper highlights that the economic development impacts, especially on low- and middle-income origin countries, are complex, dynamic, context-specific, and multichanneled. The paper identifies five main pathways: (a) labor supply; (b) human capital; (c) financial capital and entrepreneurship; (d) aggregate welfare and poverty; and (e) institutions and social norms. Several factors shape these pathways and their eventual impacts. These include initial economic conditions at home, the scale and double selectivity of emigration and return migration, whether migration was planned to be temporary ex ante, and employment and human capital accumulation opportunities experienced by migrants while they are overseas. Meaningful policy interventions to increase the development impacts of temporary migration require proper analysis, which, in turn, depends on high-quality data on workers’ employment trajectories, as well as their decision processes on the timing of their migration and return. These are currently the biggest research challenges to overcome to study the development impacts of temporary migration.

Can Remittance Promote Tourism Income and Inclusive Gender Employment? Function of Migration in the South African Economy

“…Likewise, the link between labour supply and income has been established theoretically by the Classical, Neoclassical, and Keynesian schools of thought (Bortis 2023). Arguments have also been put forth that migration can influence income and employment in the empirical literature (Alderotti et al 2023;Bossavie and Özden 2023;Diodato et al 2023). Migration can indirectly affect income by influencing labour markets in both sending and receiving communities.…”

“…Migration can indirectly affect income by influencing labour markets in both sending and receiving communities. The influx of migrants into a particular region can stimulate economic growth, leading to higher demand for goods and services, which, in turn, can create more job opportunities and increase incomes for both migrants and native-born residents (Alderotti et al 2023;Bossavie and Özden 2023). On the other hand, migration can sometimes put downward pressure on wages, especially in industries where migrants are concentrated, raising worries about wage cuts and competition for jobs among home workers (Diodato et al 2023).…”