U. WARWICK (UK) — If developed countries relaxed their immigration rules by just three percent, it would generate more than $150 billion for the world’s economy, according to a new policy paper.
Leading economist Professor Sharun Mukand, from the Center for Competitive Advantage in the Global Economy (CAGE) at the University of Warwick, presented the policy paper this week at Chatham House in London.
“As a tool for development and poverty reduction, the potential gains from the globalization of labor far outweigh those from foreign aid or the liberalization of trade and capital flows across borders,” says Mukand.
“Economists and policy-makers should devote more attention to the practicalities of relaxing barriers to international labor mobility.”
He argues that policies should be designed to address voter concerns about the threat to culture and national identity. He says: “Temporary migration with an appropriate set of carrots and sticks can be a big step in the right direction.”
Given the huge rewards from a successful program, he urges that policymakers should not seek a one-size-fits-all solution, but should experiment with alternative ideas.
Mukand says the increase in life expectancy, coupled with a decline in fertility, made it more difficult than ever to sustain social security and pension systems in the developed world. A shortage of working-age population will put a huge financial strain on the world’s economy.
“Something will have to give, and one possible solution out of the problem is to increase the influx of working age migrants from developing to developed countries,” he adds.
Source: University of Warwick