Does Development Reduce Migration?

Abstract

The most basic economic theory suggests that rising incomes in developing countries will deter emigration from those countries, an idea that captivates policymakers in international aid and trade diplomacy.

A lengthy research literature and recent data suggest something quite different: that over the course of a “mobility transition”, emigration generally rises with economic development until countries reach upper-middle income — at least until countries reach upper-middle income level, like Algeria or El Salvador. Only thereafter, as countries become even richer, do emigration rates typically fall.

This note quantifies the shape of the mobility transition in every decade since 1960. It then briefly surveys 45 years of research, which has yielded six classes of theory to explain the mobility transition and numerous tests of its existence and characteristics in both macro- and micro-level data.

This evidence suggests that donors to low income countries have little hope of using assistance to deter migration, unless the determinants of migration undergo rapid change in the future. Policy research might be better directed toward understanding how to shape rising migration flows for mutual gain. The note concludes by suggesting five questions that require further study.

Keywords: emigration, mobility, economic growth

JEL Classification: F22, J61, O15