BJORN LOMBORG: Global skilled migration could mitigate inequality

If politicians were truly serious about ending global inequality, many economists would say there is one obvious policy: allow greater global migration.

A nurse is paid about $1,900 a year in poor countries and about $32,000 in rich countries. McDonald’s workers in India earn 16 times less than their counterparts doing the same job in the US.

Economic theory holds that most of the world’s poor could become far more productive and significantly richer if they were allowed to move to the developed world.

Studies routinely suggest that opening the entire world to migration could increase global GDP by between 50% and 150%. Of course, it would also involve more than 2-billion workers moving to the rich world, and no mainstream politician in the rich world is about to call for free mobility.

However, there is another migration policy that is likely to be more politically achievable while reducing inequality and helping the rich and poor world: an increase in skilled migration.

For many years, my think-tank, the Copenhagen Consensus, has worked with several Nobel laureates and more than 100 leading economists to look at ways in which governments allocate money to do good for the world, to establish where each rand is most effectively spent.

This work has been driven by the failure of the world’s governments to actually deliver on their promises. In the UN’s Global Goals, all the world’s nations have made extravagant promises for 2030 across nearly every agenda.

This year, we are at halftime for these promises, but we are far from halfway on delivery. On the current trajectory, even with very optimistic assumptions we are likely to achieve the goals at least half a century late.

This means the world needs to start prioritising. As we are clearly unable to deliver on everything we have promised, maybe we should start with the most effective policies first. New research for Copenhagen Consensus identifies 12 effective policies that could deliver huge benefits at moderate costs. Smart migration is one such policy, especially for its effect in reducing inequality.

Enabling more skilled migration to countries that need more skilled labour could achieve higher productivity and less inequality. And surveys tend to suggest it is more politically viable, as skilled migration is less divisive than overall migration.

Medical doctors

Our new study on migration looks at the effects of allowing more skilled migration, particularly of doctors and workers in the science, technology, engineering and mathematics (STEM) fields.

The world has about 37-million skilled migrants. STEM workers make up about 9-million of these, and medical doctors about 1-million. The world has just 13-million doctors in total, with 46,000 in SA.

What would happen if each nation took in 10% more skilled migrants from the same mix of countries they already have?  

Migrants themselves would clearly benefit. A doctor moving from the Caribbean or Central America, for example, to the US would experience a dramatic and sustained increase in wages, to the value of almost $1.6m. But countries receiving skilled migrants, including the US, would also see benefits: specialised doctors will fill available positions so that less specialised doctors or nurses can return to doing what they do best.

And there is likely to be slightly higher economic growth, because introducing more diverse ways of thinking, doing things and approaching problems can generate more innovation, which drives growth. Recipient countries can gain a skilled worker without incurring the costs for a lengthy, costly education.

Home countries

Countries from which migrants originate will also experience more benefit than costs. Often, the focus is just on the so-called brain drain, which forces the country to pay to educate new doctors while lowering productivity of the doctors who remain.

But the new research shows these costs will be outweighed by skilled migrants who leave establishing new, additional channels for trade, investment and production that can boost their home countries. They also send home substantial and regular remittances, enabling their extended family to pay for good things such as more education and productivity. These benefits are likely to outweigh the costs about two to one.

Globally, the overall benefits to everyone will be far higher than the costs. While the total costs would add up over the next 25 years to about $55bn, the benefits would total almost $1-trillion. Each dollar spent on the policy will thus deliver a substantial $18 of social benefit globally that will mostly flow to the world’s poorer nations.

The research shows that increasing skilled migration at a global level offers a real opportunity to address inequality and increase global productivity. If the world is far behind on almost all its promises, maybe we should focus on the most effective policies. Allowing more skilled migration where needed could be just one such policy.

• Dr Lomborg is president of the Copenhagen Consensus Center and visiting fellow at Stanford University’s Hoover Institution. His new book ‘Best Things First’ is available for pre-order. This article is part of a series on what the world needs to do to achieve the UN sustainable development goals.