Alarming Effects Of Immigration Barriers On Global Economy
The effects of immigration barriers on economic growth are one of the key factors that determine whether immigration increases the well-being of the host society or not (01). Let’s find out.
Impact on Wages and Labour Markets
Immigrants have a positive impact on wages and labor market dynamics. However, if migrants’ skills complement those of existing workers, the impact is positive (02). Therefore, immigrants could only affect employment and wages negatively in the short term when international migrants have similar skills to existing workers.
In general, immigration positively affects the average wages of less-educated workers, as the inflow of low-skilled migrants encourages natives to upgrade their skills and specialization into other complex jobs, where they can utilize their skills and become more productive.
Impact on GDP Growth
Immigrants can boost the aggregate income (GDP growth) in host countries over the long term.
One of the channels for growth is that immigrants increase the employment-to-population ratio and surely boost capital accumulation in host countries through higher foreign investments and international trade for migrants and natives.
However, high-skilled migrants are more likely to have a larger impact on GDP per capita through their larger impact on productivity. At the same time, lower-skilled migrants may also increase productivity if their skills are complementary to those of natives (02).
Impact on Foreign Direct Investment and International Trade
Immigrants lower the transaction costs for trade and investment because of their superior knowledge of home country markets, customs, business practices, language, and laws (02). Therefore, the effects are mostly positive.
Immigration provides an opportunity for a better life for immigrants and significantly brings big gains to recipient countries.
Check the following reference articles to learn more about the Alarming Effects Of Immigration Barriers on Global Economy.
- OECD. (2018, January 24). OECD iLibrary | immigration and economic growth. OECD Publishing. URL
- Quak, E. (2019, April 5). The effects economic integration of migrants. Institute of Development Studies (IDS). URL
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