SIHMA | Scalabrini Institute For Human Mobility In Africa
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The Economic Power of Migration

Migration is a phenomenon that has existed since the beginning of human history, shaping societies and cultures into what we see today. As governments across the world increase restrictions on human mobility and intensify xenophobic rhetoric, it is essential to understand the positive impact of migration, particularly on the economies of host countries. 

A common narrative surrounding migration falsely asserts that foreigners hurt national workers, burden taxpayers and public services, and threaten public safety. However, numerous scientifically-backed reports from various international bodies disprove these myths and instead show the substantial positive contributions immigrants make not only to the economies of host countries but also to the global economy as a whole. 

The International Monetary Fund (IMF) has highlighted that, in the long term, both high- and low-skilled migrant workers contribute significantly to increased income per person, improved living standards, and enhanced labor productivity in their host countries. These economic gains are spread across various income groups, in effect, positively impacting native-born workers. 

The World Bank has also underscored the increasing reliance on migration to bolster economic growth, especially as populations age globally. The World Development Report 2023 emphasizes that well-managed migration can be a powerful driver of prosperity and development, calling for improved policies that align with labor market needs and foster integration.

In the case of South Africa, a joint report by the Organisation for Economic Co-operation and Development (OECD) and the International Labour Organization (ILO) provides a detailed analysis of how immigrants contribute to the country's economy. The study reveals that immigrants play a vital role in the labor market, economic growth, and public finance. Its findings show immigrant workers are well-integrated into South Africa's labor market, frequently occupying roles in high-growth sectors. Immigration also potentially raises GDP per capita by up to 5%, thanks to the efficiency gains and higher educational attainment of foreign-born workers. Lastly, immigrants make a positive net contribution to the government's fiscal balance, paying more in taxes than receiving benefits.

South Africa stands as a testament to the positive impact of migration and the potential benefits if policies aligned with the labor market and promoted integration. Embracing the economic power of migration can lead to thriving economies, diverse societies, and a more interconnected world. It is imperative for policymakers, advocates, and citizens alike to recognize and champion the positive contributions of migrants.

Sources:

Organisation for Economic Co-operation and Development (OECD).  (2014) Is migration good for the economy? Available online: https://www.oecd.org/migration/OECD%20Migration%20Policy%20Debates%20Numero%202.pdf

The World Bank. (2023) Better Migration Policies Can Help Boost Prosperity in All Countries. Available online:  https://www.worldbank.org/en/news/press-release/2023/04/25/better-migration-policies-can-help-boost-prosperity-in-all-countries

International Monetary Fund (IMF). (2016) Migrants Bring Economic Benefits for Advanced Economies. Available online: https://www.imf.org/en/Blogs/Articles/2016/10/24/migrants-bring-economic-benefits-for-advanced-economies

Organisation for Economic Co-operation and Development (OECD)/International Labor Ogranization (ILO). (2018) How Immigrants Contribute to South Africa's Economy. Available online: https://doi.org/10.1787/9789264085398-en.

 

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