Migration and Development: A World in Motion

Four-year PhD (2009-2013)
PhD positions in Migration Studies
 

Research themes
The research programme comprises 3 themes: 
A.Remittances, development (local economic growth) and poverty alleviation;
B. Brain drain and development policy;
C. Return migration in the life cycle of migrants

These research themes will be elaborated upon in the next paragraphs. One important tool that will be used for several of the researches will be a new-to-be-created database, which will be discussed first.

Database
The construction of the database is an important tool in the proposed research programme. The basic data allow relating migration behaviour of members of families to their economic and social embeddedness in the societies in both the country of origin, as well as the country of destination and to the economic, social and legal conditions under which they live and lived at both sides of the migration flow. This database will provide part of the empirical data for the themes A, B and C 

In the field of migration and development, quite some quantitative data is already being collected.[1] Often these data sets lack the linkage between migrants and their families and communities in their countries of origin[2]. The database to be set up for this program will fill this gap.

Given the time and budget constraints, it has been decided that data will be collected among migrants in the Netherlands stemming from 4 countries: Afghanistan, Burundi, Morocco and Ethiopia and their families and networks in the country of origin. Data collection in all the countries will be organized in collaboration with local research partners. Data will be collected both by quantitative surveys and by qualitative data gathering methods. The precise mixture will be decided after a pilot phase. These four countries have been chosen for various reasons. First of all, all 4 countries figure on the list of partner countries for M&D policy. Secondly in terms of numbers migrants from this origin form a fairly large group in the Netherlands.  In addition these groups of migrant all have quite a different background and came to the Netherlands in different periods and for different reasons. Lastly also a geographical distribution has been taken into account.

The data base will consist of the following main parts: data on the migration history of the migrant families; data on the social and economic conditions under which the families lived prior to migration and in the receiving country; data on the future migration intentions of migrant families; data on the social and economic networks of migrant families in the country of origin prior to migration and currently, and in the country of destination; data on the social and economic relations between migrant families and their networks in both the countries of origin and countries of destination; data on the policy parameters that affect migrant families in the receiving and the sending country.

A.  Remittances, development (local economic growth) and poverty alleviation
The main research question of this first theme will be: To what extent do remittances contribute to development (local economic growth) and welfare including poverty alleviation, the reduction of inequality, vulnerably and increased capabilities?

The research project will be done in two steps:
1) the effect of remittances on welfare (poverty, vulnerably and capabilities)
2) the effect of remittances on development (local economic growth) with regards to how money is sent (remittance channels) and what the money is spent on (consumption, investment (also including human capital investment: education and health and savings.)

1) The first part of this project assesses the impact of remittances on poverty, vulnerability and capabilities of both the migrant and the remittance receivers. While the effects for the remittance receivers have been studied before, the consequences for the livelihood strategy of the migrant sending remittances are often lacking in previous studies; this project intends to fill that gap. The project assesses to what extent and how migration is used as a livelihood strategy by households. The study will analyse the extent to which remittances decrease poverty, reduce vulnerability and increase capabilities. Past studies have looked at the effect of remittances on poverty but little work has been done on remittances in relation to vulnerability and capabilities. Even fewer studies look at both sides of remittances (receiving and sending). This study will test, whether increased welfare happens in stages: for example people probably first care about securing their immediate situation (poverty), but once this is secured they would tend to look to the medium term (to what extent are people vulnerable to poverty-via shocks), subsequently once they have dealt with vulnerability they probably look to the long term and their capabilities. It is still an open question whether remittances in the receiving countries serve merely as a livelihood and survival strategy for the family in the sending countries or whether remittances feed “a culture of migration” and finance future emigration of family- and network member first left behind. It is also still unclear to what extent remittances are sustainable sources of income and whether and how quickly remittances stop being sent. This part of the research aims at exploring the answers to these puzzles and questions.

2) The second part of this project looks at how remittances affect development (local economic growth). To do this, the project considers two specific channels through which development can take place with regard to remittances: (1) how remittances are sent and (2) how remittances are used. Recently, international organizations such as the World Bank and the International Monetary Fund have made it a priority to encourage the sending of remittances through formal channels. There seem to be two main reasons for this. One reason is the strong concern after September 11, 2001 that money travelling through informal channels is more susceptible to money laundering and terrorist financing, hence there was a greater need to regulate and create transparency in money flows in general. The other reason is to increase the developmental impact of remittances.

When remittances are sent through the formal sector, and in particular, banks, the idea is that the money helps to strengthen the financial sector in the home country. Remittances are a source of foreign exchange (affecting the BOP) and foreign exchange can alleviate the balance of payments burden and pay for imports (Bugamelli et al. 2005; Ratha 2003; Ratha 2006).  More money flowing through banks means more money to be used to finance loans. The money that is sent through the formal sector can be counted and can be used by the country’s central bank to securitize future flows and also to gain loans from international donors which can also be used to spur growth and development. If remittances are sent through formal financial institutions, customers can be offered a range of other banking products that help to create more financial literacy to “bank the unbanked”. Of course migrants respond to specific incentives in their choice for a formal or informal channel; understanding the determinants of these choices is part of the research question. Since large amounts of money are being sent and this money has a dramatic impact on the lives of many people, it is important to understand ways in which the sending of remittances can be made easier and more efficient and effective, so more money reaches its final destination.

The way remittances are used is another hotly debated topic. The  research project aims at understanding the impact of remittances on the local growth potential of the economy by studying the way these funds find their way into the local economy (as consumption, investment, savings). Investment can be split into regular forms of investment as well as human capital investment (health and education) which affects long-term growth. There will be a focus on the extent to which and under what conditions remittances are used to finance entrepreneurial projects and Small-and-Medium Enterprises (SMEs). To get a firm understanding of the way remittances are spent is important in order to be able to create policies to facilitate the ‘productive’ use of remittances. This part of the project will also assess whether remittances are used in stages; for example do people first meet their basic needs through consumption and then move on to different uses of remittances?

The study will use the data stemming from the database described above together with other information available stemming either from other research projects or from alternative databases. 

On the basis of the results of this project, policy options to enhance the benefits of remittances for the communities that receive remittances as well as those who send them will be suggested. This study links up with ongoing and planned research at the Maastricht University studying, for example, the possibility of linking remittances and micro-finance projects. Insights in the strategies of migrating members of household will teach us how remittances are or can be used as welfare instruments and consequently how they might contribute to the realisation of the Millennium Development Goals. The outcome of this research will make clear how to facilitate the ‘productive’ use of remittances for development and increased welfare.

B. Brain drain and development policy
One of the negative effects of migration on development that is often talked about in the context of M&D is the exodus of high skilled labour, so-called brain drain, which is posing developmental challenges to developing countries, as brain drain means a loss of human capital and negative returns on educational investment. There exist a tension between the national policies of many developed countries, such as the Netherlands, which aim at attracting high skilled labour, while on the other hand policies exist to stimulate development and prevent brain drain at least in sensitive sectors, such as health and education. No consensus however exists on the extent of the problem of brain drain, nor its solutions.  

The question is how ‘large’ the loss of brains is and whether this loss is compensated for by the tangible (remittances) and intangible transfers (innovations, experience) from the high skilled migrants to the country of origin. These questions are addressed to some extent by previous research. Studies have been undertaken on the aggregate level by Beine et al (2001)[3], who found a positive and significant effect of migration prospects on human capital formation in a cross-section of 37 developing countries. Carrington and Detragiache computed emigration rates at three educational levels for a large set of developing countries. Beine, Docquier, and Rapoport (2003) make use of these data and find empirical support for the beneficial brain drain in cross-section for 50 developing countries. However, brain drain appears to have negative growth effects in countries where the migration rate of the highly educated is above 20% and where the proportion of people with higher education is above 5%. Especially small countries are strongly affected; the most worrisome is the situation in Sub-Saharan Africa and Central America. When observing the impact of brain drain, Docquier (2006) includes the impact of human capital formation, the role of remittances, the impact of return migration, the effects of diaspora externalities and the impact on governance and corruption. This research project will build on the existing studies and focus on the channels through which migration of highly skilled workers to developed countries has an effect on the sending country. The migration flows from one or several countries in the database to the main destination countries will serve as the starting point for this research.

The first channel refers to the effect that the option for emigration has on potential migrants or on institutions in the sending country. The effects on the uptake of education, the accumulation of local social capital, the incentives to start a business and others will be observed. In the second channel the effect of the emigration on the sending country due to the lost human capital will be analysed. The effects in terms of the economy (multiplier effects, dependency, labor market situation), education (quality of education, educational attainment), health (provision and quality of health services), institutions (the competence of local public institution, trust in public institutions) will be examined in this channel. The third channel looks at the effects that high skilled migrants have on a sending county while being abroad. This research will observe the effects of remittances, investments as well as knowledge flows from migrants in.  Finally, return migration is considered to be a fourth channel, which can affect the sending country. Return migration is generally considered as positive and is, therefore, encouraged. The research will observe return migrants and their households regarding their profile, activity and integration back in the home country. Moreover, migrants will be asked about their plans to return to their home country.

The effects that take place through the abovementioned channels often overlap in reality, however we can still make a conceptual distinction between the different channels. The institutional arrangements related to migration will be observed in terms of the four channels by looking at how the policies the country of origin and countries of destination address migration issues.

The theoretical and empirical insights that will be gained through the abovementioned research will be used to specifically study the policy instruments that are used or could be used to reduce the impact of brain drain at both sides of the migration streams; these might range from “ethical recruitment policies[4]” to compensating payments between states for the brain drain losses or the related investments in human capital. 

Mainstreaming migration in development policy: the impact of development policy on migration

A specific set of questions is related to the impact of existing general development policy on the propensity of the highly skilled population in developing countries to migrate to developed countries. Questions like whether investments in education or investments in health services stimulate or refrain the highly skilled migrants to move (or vice versa). In order to investigate whether development policies have an influence on brain drain, the study will first analyse the determinants of migration of the highly skilled in order to understand whether their behaviour can or could be influenced by development policies.  Since development policies also affect migration flows of low skilled labour, the study will also address the question to what extent these policies stimulate or prevent the movements of low skilled migrants. An interesting related questions is whether developing countries take migration on board as a factor in national development strategies and development instruments in general (for example targeting employment projects towards regions plagued by outward-migration (Senegal)), whether these strategies are effective and what are the other possibilities for mainstreaming migration into national development planning. This specific set of questions will explicitly be addressed in a separate document.

The project will use the data as collected in the database, but will also explore other data bases and secondary sources in order to map and evaluate the policies of developed and developing countries alike.

C. Return migration in the life cycle of migrants
This study focuses on the incentives and disincentives for migrants to return[5] to the sending country. It is important to understand why people move away from their country and what will stimulate them to return temporary or permanently. The success of policies to stimulate circular- and return migration is conditional on the impact of the policy instrument on the behaviour of migrants (and potentially their employers).

Circular migration is high on the international agenda of migration and development.[6] This form of legal migration is often presented as an answer to the challenge to create a situation in which migration could yield a triple-win for migrants and sending and receiving countries. At the same time, circular migration seems to address two different policy concerns. On the one hand, developed economies seem to prefer to host foreign workers as long as the economy needs them, but would like to avoid permanent settling of the migrant workers in order to guarantee that in economic downturns labour supply is not further increased when the demand for labour is declining to avoid repetition of failures of past temporary migration programs. On the other hand, developing countries ask for more possibilities for legal labour migration. Developed economies also want to stimulate circular migration because it is believed that return migration may counteract the negative effects of brain drain for the sending country.

Circular migration is not new. For a very long period (between the late 1950s and the early 1980s) the Netherlands assumed that the “guest workers” would only be temporary guests in the economy and the society implying a concept of circular migration “avant la lettre”. Overall, only a limited number of migrant workers returned: the majority stayed despite severe economic crises and a host country that was not really welcoming them.

When designing a new scheme for circular migration it is important to understand why people move away from their country and what will stimulate them to return temporary or permanently. The success of policies to stimulate circular- and return migration is conditional on the impact of these policies have on the behaviour of migrants (and potentially their employers). This project will look at the role of return migration in the life cycle of migrants and their families. This will form the basis for a policy study that focuses on the incentives and disincentives for migrants to return to the country of origin.

This inspires research to investigate under what conditions return works. Three issues seem to be pivotal in this respect:

Do the relations and the endowments of the migrants within the welfare pentagons[7] of the sending and the receiving country stimulate or refrain migrants to return at a certain point in time; it might be that modern communication- and travel technology allows them to keep in closer contact with the sending country institutions compared to the situation in the previous century; on the other hand, it may be that the investments of migrants in financial, human and social capital in the receiving countries are now becoming more important due to the incentives provided by the hosting country to assimilate and integrate more fully; if that is the case, these investments would tie them to the receiving country;

1.      How does return migration fit within the life cycle of migrants workers and migrants coming to developed countries for other reasons (family reunification, asylum)?
2.   Under what circumstances do returnees have a positive/negative impact on development? Can reintegration schemes make a positive contribution? Factors like permanent or temporary work/residence permits and voluntary or forced return will be taken into account.
Given the answers to these questions, the policy options at national and European level for stimulating circular and return migration will be explored, discussed and compared with (best) practices in other countries.

The data collected in the data base are organized to answer the empirical questions formulated above. Policy analytical research will complement the study on the micro level.