apples and oranges

Out-takes, part 2: Want To Boost The Economy (And Make The World Better)? Let In More Immigrants

Fri, 17 May 2013 12:18:00 -0400

Retro-actively declaring it in honor of my Mom, Dad, and Grandmother, who all immigrated to this country from the Philippines, I wrote this post for Co.Exist.

Two of the interviews contained quite a bit of material that I just couldn’t squeeze in. Below is the full interview, unedited, with Michael Clemens, senior fellow at the Center for Global Development where he leads their research efforts on migration policy (if you haven’t seen his name in one of the many articles about the current immigration debate, you’re probably reading the wrong things). Here is the other interview with Solome Lemma.

You’ve written that barriers preventing more people in poorer countries from migrating to richer countries cost the global economy roughly half its potential GDP. In the simplest possible terms, how did you come up with that number?

That number roughly represents the best estimates—sophisticated but inherently rough—that economic researchers have come up with in a variety of peer-reviewed studies. I summarize that research in this paper (open access).

Those studies use nuanced methods, involving modeling global labor and capital markets. But in that paper I describe how we can do a quick, intuitive check on whether numbers this large are sensible:

“We can check these calculations on the back of the metaphorical envelope. Divide the world into a ‘rich’ region, where one billion people earn $30,000 per year, and a ‘poor’ region, where six billion earn $5,000 per year. Suppose emigrants from the poor region have lower productivity, so each gains just 60 percent of the simple earnings gap upon emigrating—that is, $15,000 per year. This marginal gain shrinks as emigration proceeds, so suppose that the average gain is just $7,500 per year. If half the population of the poor region emigrates, migrants would gain $23 trillion—which is 38 percent of global GDP.”

Again, this is not how economists actually estimate the gains to migration, it’s a sanity-check on their results using an epic simplification. And it bears out the vastness of the gains.

What about the poorer countries and communities that those people would leave behind? Shouldn’t we want the smartest or most capable workers there to stay in those countries?

Think about an impoverished area of your own country. An American might think of south-side Chicago, or eastern Kentucky, or the Blackfeet Nation in Montana. Ask yourself: What would be the effects of placing limits on the ability of smart young people to leave those places? Would trapping people in poor neighborhoods of Chicago, or in eastern Kentucky, or on a Native American reservation cause an efflorescence of economic development there? Separately from that, would this be an ethical way to cause economic development in those places? What would you think if you had been born in one of those places?

I pose this question in terms of coercion—‘trapping’ people—because tightly-binding policy barriers to human movement are the main constraint to migration. Most Americans and Europeans are unused to restrictions on which countries they can visit or live in if they choose. Most other people on earth do not have that choice. Right now, what “we want” is indeed the main determinant of whether or not a bright young high school senior can leave Haiti for the United States, but through coercion by armed representatives of the people via Customs and Border Patrol and the Coast Guard. In this context, the discussion of what “we want” is roughly equivalent to the discussion of “what choice of where to live should we impose on other people via the threat of violent force?” It is not a discussion of what we want to ‘encourage’ or ‘discourage’, it’s about what we allow, which is something entirely different. It’s coherent to want to encourage smart young people to stay in developing countries once they have a chance, and be against coercing them to stay (a fate few of us would accept as ethical treatment of ourselves). Since most do not have the choice yet, the discussion of what should be encouraged or discouraged is premature.

What about worker exploitation? Wouldn’t lower barriers to migration risk more immigrants falling into such unfortunate circumstances?

There are two questions here: 1) Whether reducing barriers to migration would lead to more people getting exploited, and 2) whether that’s a reason not to lower barriers to migration.

On the first question, it depends on what you mean by ‘exploited’. A low-skill Haitian male arriving in the US earns at least 6 or 7 times what he could earn at home for similar work. Taking away the option to migrate, via a migration barrier, means that the same person doing the same work earns 85% less. That is obviously exploitation in a meaningful sense. No one would accept for you to earn 85% less than I if we were side by side doing the same task in the same job, and you were obliged to accept that state of affairs by force. That would be exploitation of you. Barriers to labor mobility do precisely that to people.

What many people have in mind when they say ‘exploited’ is something like ‘earning less than people who are nearby me and resemble me’, with the unspoken assumption that all other people belong to some incommensurable mass of people-who-don’t-count. For example, if a black person earns less than a white person but they’re the same in all other ways, that’s a red flag for exploitation. But no one would imagine that that’s a reason to forcibly block black people from entering the labor market! Obviously, the right policy response in that situation wouldn’t be to prevent black people from entering the labor market with the goal of preventing ‘more exploitation’. It would be to attack the forces causing blacks to earn less than whites.

I don’t see why it’s any different for migrants, so that’s my answer to the second question. Even if there is exploitation that is caused by reducing barriers—and I don’t accept that as a general statement, since barriers to labor mobility cause massively more exploitation—that’s not a reason to block labor mobility. Discrimination against women in the workplace is not a reason to prevent women from entering the workplace; it’s a reason to end discrimination in the workplace. Likewise, any ‘exploitation’ of migrant workers is a reason to end exploitation of migrants, not a reason to coerce them by taking away the option for them to migrate (retain current barriers).

Would you say the poorest 20 percent of society—worldwide—stand to benefit more than the rest of society from lower barriers to migration?

I have not seen systematic research capable of answering this good question at the global level. There are countries where relatively poor people are the ones who migrate internationally, and others where relatively rich people migrate internationally. The global balance I’ve never seen a calculation of.

But again, we have to keep in mind that the vast majority of potential migrants are constrained from moving by policy barriers. Suppose we were in a situation where 95% of all entrepreneurship was banned. 5% of potential entrepreneurs were allowed to start businesses and the rest got huge fines and jail. Someone comes along and proposes allowing 10% of potential entrepreneurs to start businesses. But social activists raise the objection that it will not directly benefit the poorest 20% of society, because those people are unlikely to start profitable businesses anyway. Few people would think this was a legitimate reason to continue banning the vast majority of all new business activity, whose only possible motivation would be to protect current rich business owners from having to compete with new entrants to the market. Add to this the fact that all workers in an economy benefit from entrepreneurial activity, not just the business-starters themselves, because entrepreneurs convey many benefits on people who don’t start businesses: they create all private sector jobs.

This analogy extends to migrants. Whether or not the poorest 20% can migrate—and in many countries they cannot—1) that’s not a reason to force others not to migrate, which is the current state of affairs for most people from developing countries, and 2) the migration of people who are not in the bottom 20% benefits people in the bottom 20%. When a Filipino brings home money from guest-work in Saudi Arabia and builds a house in the Philippines, she’s likely to employ construction workers who are in the bottom 20%. And that’s just the direct effect of the money she brought home. Even if she didn’t hand the money directly to the poorest, as it circulates around the Filipino economy that money is very likely to affect the economic activity of the poorest sooner or later. Economists refer to these as multiplier effects.

Do policymakers, even those who concern themselves with global poverty, underestimate lower barriers to migration as a tool for development? Any non-ideological reasons why they would—such as lack of research or lack of political opportunity?

Absolutely yes, they underestimate it. Most government policymakers see them as issues that are at best unrelated, and at worst antithetical. There’s often this unspoken idea: “Our job here in the aid agency is to develop these countries so no one needs to leave, and their job in the immigration agency is to handle the fallout when we fail.” Does the US Agency for International Development (USAID) have a substantial agency working on how to leverage migration for development? No. Does the US Dept. of Homeland Security, which handles visa enforcement, have a substantial section devoted to the development effects of its work? No. So there’s a big structural problem in Washington and other capitals: there are very, very few people whose job it is to think about how to leverage migration for development and poverty reduction. That’s unfortunate since migration is one of the most powerful and certain tools for development and poverty reduction that exist.

So yes ideology is part of it but there are also structural constraints on the many thoughtful and energetic people, especially young people, who want to move against the grain and explore the intersection of migration and poverty reduction. There are extremely few jobs for people like them.

Remittances continue to grow and get cited as the “largest source of aid to poor countries,” but is even that underestimating or oversimplifying what diaspora communities can do for development?

Absolutely. There are all kinds of ways that people abroad affect the developing countries they came from, and sending cash is just one of many. Berkeley’s AnnaLee Saxenian has documented the role of Taiwanese and Indian diaspora in the origins of the high tech industries in those countries. Antonio Spilimbergo has rigorously shown that when more students from a developing country study abroad in more democratic countries, the country of origin tends to get more democratic. In other words, those students are sending home ideas. Michele Beine, Frédéric Docquier, and Maurice Schiff have explored how international migrants bring home new norms about women’s fertility. And there’s a stack of other research on this. Migration barriers cut off all of these benefits, along with cutting off flows of cash remittances.

How did you become interested in this research topic in the first place?

Because my father is a mathematician who worked in Latin America, I grew up surrounded by brilliant people from other countries who were only able to make an intellectual contribution because of the opportunities they had being in the U.S. Later I lived abroad myself, and met many people who lacked the opportunities I had solely because of where they were born. I could see who important location was to the opportunities people have, but I’m also aware that where people live is primarily decided by birth (just 3% of earth lives outside their country of birth). Since none of us decides his or her birthplace, that can’t be related to merit of any kind. So we have a world where something other than merit is the principal determinant of our ability to make an economic contribution and receive rewards for that contribution. That state of affairs fascinates me to this day.

Out-takes, part 1: Want To Boost The Economy (And Make The World Better)? Let In More Immigrants

Fri, 17 May 2013 12:10:00 -0400

Retro-actively declaring it in honor of my Mom, Dad, and Grandmother, who all immigrated to this country from the Philippines, I wrote this post for Co.Exist.

Two of the interviews contained quite a bit of material that I just couldn’t squeeze in. Below is the full interview, unedited, with Solome Lemma, who co-founded a platform for the African diaspora to better coordinate and engage in social change in their countries of origin. Here is the other interview with Michael Clemens.

When you co-founded AiD a few years ago, what made it the right time for such a platform?

I have been living with the idea for AiD for a long time, since 2008 or 2009. We started working on it more intensively in 2011 and the organization launched publicly in October of 2012.

The time is right for many reasons. First, the fact is we need new approaches to aid and development in Africa. No longer are Africans willing to remain silent “beneficiaries” or “subjects” of external charity. What happens in Africa affects each one of us intimately and we want to play an active role in addressing the challenges that our communities face. To date, our efforts have been focused on helping our immediate families, through remittances and other forms of support. But as of recent, as the African Diaspora communities have matured and grown, we are also realizing the importance of organizing and of addressing the systemic challenges that our communities face. As I looked around for platforms that channel our collective skills and resources into effective investment in Africa, I found very little.

Add to this, the fact that aid in Africa has failed us in many ways. It’s been highlighted in a countless number of articles, blogs, and even books like Dead Aid. We need to explore new approaches that actually put Africans at the epicenter of the process as leaders, designers, and implementers of change in their communities. The need for Africans to solve African problems has been receiving increasing attention over the past few years, and the time was right for an African led organization to play an active role in this dialogue.

Finally, the importance of the African Diaspora is receiving increasing attention. People, over the past five years or so, are waking to the power of the Diaspora, the power of our resources and reach. That is why you see the World Bank conducting research and outreach to the Diaspora, the African union doing the same. That is also why the State Department and USAID are doing Diaspora outreach in their own capacity.

As I looked around at the tremendous power of our resources ($60 billion in remittances last year), the growth in our numbers, and the ineffectiveness of aid and charity in Africa, the environment was simply ripe. I knew it was time for us to build our own platform so that we can affect meaningful change and engage in these conversations as partners and leaders, not just subjects and objects of discussion.

You’ve argued that remittances need to be redefined as philanthropy—what do you mean by that?

That blog was written for An African audience. I often hear people say I haven’t been able to do much or they ask what can I do? Well, the remittances we send are a form of philanthropy. While we often relegate them to household support, those remittances are lifelines of many communities, and in many cases, they’re used for the same purposes as aid and philanthropic resources. Our remittances are putting people through school, providing health care, opening accesses to employment, and protecting our environment. It’s important for us to realize that Africans give, have been giving years, and will continue to give. And while strategic, institutional philanthropy may be relatively new, we’ve been doing the work for years.

It’s clear you think that Diaspora communities are underestimated forces for progress back in their countries of origin. “Who” exactly is doing the underestimating? Bilateral aid agencies, multilateral aid agencies, private foundations, diaspora communities themselves?

All of the above. I don’t think aid and philanthropic institutions engage the Diaspora sufficiently ad effectively. I have worked in development and philanthropy, and African Diaspora was rarely a subject of those conversations or activities. Recently, with the World Bank and State Department, institutions are paying increasing attention to the Diaspora and attempting to provide targeted services. Which is an important and critical first step. However, these new interests in diaspora leadership are not backed by resources or investment in diaspora leaders and organizations. Important to note also, even these renewed conversations on the role of the diaspora are not being driven by the Diaspora. And there is a risk of us being engaged as an opportunity to harness and exploit.

Do you support lower barriers to migration as a tool for development? Could larger Diaspora communities be even stronger forces for progress in their countries of origin?

Wow, a great, complicated question! Well, generally I wish there were lower barriers to migration for all reasons. But to focus on your question, it depends on the terms. It depends on what kinds of policies host countries have to absorb and integrate migrants, what type of opportunities they are afforded in their new homes. If there is open migration but no opportunity, whether educational or career, then the diaspora’s ability to contribute to development is compromised. Moreover, the migration as a tool for development is only useful if those skills and resources find their way back home. So, another important side of this question is how do countries create incentives for the diaspora to give back or go back. How do African governments incentivize Diaspora investments at home? How can they remove the barriers and challenges many face when they return?

#happyfriday

Fri, 03 May 2013 18:06:59 -0400

#happyfriday

Sea Lion.

Sun, 28 Apr 2013 16:24:35 -0400

Sea Lion.

I’ll have a lager, please. (at Lickety Split)

Sat, 20 Apr 2013 15:14:03 -0400

I’ll have a lager, please. (at Lickety Split)

Springtime in #Harlem arrives like a thief in the night (at...

Thu, 18 Apr 2013 23:55:25 -0400

Springtime in #Harlem arrives like a thief in the night (at Hamilton Heights)

timeshaiku: A haiku from the article: Shannon Galpin Has a...

Wed, 17 Apr 2013 07:03:08 -0400

timeshaiku:

A haiku from the article: Shannon Galpin Has a Mission: Putting Afghans on Bikes

Bennie is ready to #party. (at 3333 Broadway)

Sat, 13 Apr 2013 11:39:01 -0400

Bennie is ready to #party. (at 3333 Broadway)

#philly #nofilter (at Philadelphia 30th Street Station)

Sat, 06 Apr 2013 19:22:40 -0400

#philly #nofilter (at Philadelphia 30th Street Station)

literaryjukebox: New York blends the gift of privacy with the...

Tue, 02 Apr 2013 17:09:38 -0400

literaryjukebox:

New York blends the gift of privacy with the excitement of participation; and better than most dense communities it succeeds in insulating the individual (if he wants it, and almost everybody wants or needs it) against all enormous and violent and wonderful events that are taking place every minute. … New York is peculiarly constructed to absorb almost anything that comes along (whether a thousand-foot liner out of the East or a twenty-thousand-man convention out of the West) without inflicting the event on its inhabitants; so that every event is, in a sense, optional, and the inhabitant is in the happy position of being able to choose his spectacle and so conserve his soul.

E. B. White in Here Is New York

Song: “City of Refuge” by Abigail Washburn

iTunes :: Amazon :: Back to Brain Pickings

Riverside Park. #citylife #urbanliving #cities #nyc #nofilter ...

Sat, 30 Mar 2013 16:06:33 -0400

Riverside Park. #citylife #urbanliving #cities #nyc #nofilter (at Riverside Park Soccer Fields)

Empowering girls all day and night. (at 3333 Broadway)

Fri, 29 Mar 2013 20:17:15 -0400

Empowering girls all day and night. (at 3333 Broadway)

#Jam.

Wed, 27 Mar 2013 17:37:48 -0400

#Jam.

#sunrise (at 3333 Broadway)

Fri, 22 Mar 2013 07:21:56 -0400

#sunrise (at 3333 Broadway)

"On average, it took participants seven minutes to answer the questions using a search engine, and 22..."

Tue, 19 Mar 2013 23:06:27 -0400

“On average, it took participants seven minutes to answer the questions using a search engine, and 22 minutes using the University of Michigan’s library. Hal Varian, Google’s chief economist, then calculated that those savings worked out to 3.75 minutes per day for the typical user. Assigning that time a value of $22 per hour (the average wage in America), he reckons search generates $500 of consumer surplus per user annually, or $65 billion-$150 billion nationally.”

- How to quantify the gains that the internet has brought to consumers
(via planetmoney)

No words. (at 3333 Broadway)

Mon, 18 Mar 2013 12:55:42 -0400

No words. (at 3333 Broadway)

Good morning. (at 110 William Street)

Fri, 15 Mar 2013 08:34:14 -0400

Good morning. (at 110 William Street)

First broadway show as a New Yorker. (at Kinky Boots at the Al...

Tue, 12 Mar 2013 20:03:29 -0400

First broadway show as a New Yorker. (at Kinky Boots at the Al Hirschfeld Theatre)

First Reuben as a New Yorker. (at Junior’s Restaurant)

Tue, 12 Mar 2013 19:26:49 -0400

First Reuben as a New Yorker. (at Junior’s Restaurant)

natgeofound: A girl feeds her pet bear in Riggins,...

Mon, 11 Mar 2013 07:06:57 -0400

natgeofound:

A girl feeds her pet bear in Riggins, Idaho.
Photograph by Maynard Owen Williams, National Geographic

BAMF.