Migration Into Europe: A Long-Term Solution?

By Branko Milanovic*

Why has migration become such a big problem? Many reasons can be adduced: the war in Syria, the integration of Eastern Europe, lack of new jobs in many Western countries following the Global Financial Crisis etc. But listing individual reasons is insufficient to understand it and think what to do about it.

The origin of the problem, in most general terms, is twofold: (1) globalization that has made the knowledge of differences in income between countries much better known and has reduced the cost of transportation, and (2) large gaps in real incomes between the European Union (especially its more prosperous North) and the Middle East and Africa.

The first point is well known. Many studies show that the more people know about the rest of the world (especially if that rest of the world is richer than their country) the more they compare their own standard of living with that of presumed peers in the richer countries, and the more likely they are to do something about it: namely, to migrate.

The second point has to do with the fact that the gap in GDP per capita between the original EU-15 and sub-Saharan Africa has risen from seven to one in 1980 to 11 to one today. (This is the gap obtained after factoring in the lower price level in Africa; without it, the gap would be even greater.) At the same time as real incomes have become so unbalanced, population growth rates have become even more so.

In 1980, the EU-15 had more people than sub-Saharan Africa; today, sub-Saharan Africa has twice-and-a-half as many people. Within the next two generations, sub-Saharan Africa should reach 2.5 billion people, five times more than Western Europe. It is totally unrealistic to think that such large income gaps (in one direction) and population gaps (in the other) can persist without generating a very strong migration pressure.

Goodbye globalization?

Thus, Europe faces a long-term issue and the following dilemma. As we just saw, if there is globalization and countries involved in globalization have highly uneven incomes, there must be migration. 

You can stop migration only if you give up on globalization by closing off national borders, or help emitting countries get as rich as Western Europe. The latter would obviously take, under the best of circumstances, at least a century. So, it is not a feasible solution. What then remains is to shut down globalization, at least when it comes to the movement of people.

Would that be a good solution? This is very doubtful. Studies show that, while the inflow of migrants has a mild negative effect on wages or employment of some groups of domestic workers with whom migrants compete, it has positive effects on wages and employment prospects of workers whose jobs are complementary to those of migrants. 

Thus, a Malian plumber might reduce the wages of French plumbers, but he will also increase the real wage of those whose bathroom he fixes (not only because they will pay less but would find a plumber more easily and not take time off work). In addition, rich countries benefit from skilled workers’ migration since many of the highly qualified people come after having completed studies for which European countries pay nothing.

So, while migration is economically an overall favourable proposition for rich countries, it may be considered as a minus from its cultural angle if the native population feels strongly that some of its cultural traits are in jeopardy due to migrants’ lack of assimilation or unwillingness to accept domestic norms.

Another way

This argument should not be confused with racism or xenophobia as such. It should be given its due importance. If sufficient numbers believe so, then economic arguments alone can never be strong enough to govern the rules of migration—especially since economic arguments might imply a level of migration that many people might find too high.

This is why we need an alternative approach that would balance European economic needs for migrants with the preservation of certain cultural norms. The alternative approach could be based on accepting predominantly (or only) workers that come to do specific jobs for a limited period of time and will have to return to their countries of origin at the expiration of that time (say, a maximum of five years).

They could be replaced by other migrants resulting in ”circular migration” where the number of resident migrants does not increase or does so only if there are new jobs.

This is the model used in the Gulf Council countries and Singapore, as well as by the United States, UK and Canada for people who come on certain time-and job-restricted visas. 

Workers on such visas would enjoy equal treatment with respect to earnings and labor conditions as local employees (so there would be no under-cutting of local wages nor illegal exploitation of migrants) but they will not enjoy other civic rights (voting) or have access to non-labor related social benefits (child benefits, state pensions, say).

Partial citizens

The solution has, of course, its drawbacks. It breaks down the advantages of citizenship into several categories, some of which are received by citizens, and others that are received only in part by migrant workers.

It thus dispenses with the two-centuries-old duality where citizenship was viewed as a binary category: you were either a citizen with all duties and rights, or not a citizen and thus outside that particular community. It introduces people who would be part-citizens for a limited period. This may be an inevitable implication of globalization which dissolves the traditional coincidence between one’s citizenship, place of work and national origin of the company where one works. 

As companies have become multinational, owned by thousands of individuals from different countries, and as one’s place of work no longer necessarily coincides with the place where one lives, citizenship with all of its prerogatives will likewise become more fluid.

The proposal on circular migration has to be considered not in isolation but in the context that I outlined at the start: where neither of the two other options, a much more open migration, on the one hand, and a “fortress Europe” on the other, is feasible. 

A compromise intermediate solution, in tune with globalization but also with legitimate concerns for national heritage, may then be preferred.

*A Serbian-American economist. A development and inequality specialist, he is Visiting Presidential Professor at the Graduate Center of City University of New York (CUNY) and an affiliated senior scholar at the Luxembourg Income Study (LIS). He was formerly lead economist in the World Bank's research department.