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Update 1 - February 2009
Migration and the Global Financial Crisis: A Virtual Symposium
Update 1.A: An Overview by Stephen Castles
A Virtual Symposium
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The 4 edition of The Age of Migration was written before the extent of the current
global financial crisis had become evident. The book therefore does not discuss the
actual and potential effects of the crisis on international migration, and on related
topics like integration, xenophobia and remittances. The book's companion website
allows us to do this now. This update provides information and analysis on the effects
of the crisis on migration.
At this stage the evidence on the impacts of the crisis is still very fragmentary,
although some valuable reports and articles are beginning to appear. The following
are a small selection of many: (Chamie, 2009; Papademetriou and Terrazas, 2009;
Ratha et al., 2008; The Economist, 2009; Trinity Immigration Initiative, 2008). Many
of the websites listed on the Weblinks page of this site have also posted information
and analysis.
In order to get a better idea of the possible consequences of the global financial crisis
on migration, I wrote in mid-December 2008 to some leading migration experts
around the world, and asked them to take part in a "virtual symposium" on the topic.
I have received many replies: Professor Roger Zetter, Director of the Refugee Studies
Centre at Oxford University has provided a short paper outlining consequences for
forced migration - see Update 1B; Professor Philip Martin of the Department of
Agricultural and Resource Economics at the University of California, Davis, has
written a very valuable global overview of the state of knowledge on the effects of the
crisis on labour migration and remittances - see Update 1C Other analysts have sent
me briefer information and references to a range of relevant publications - see
Update 1D. Yet others have promised to send special papers in the near future - these
will be posted on The Age of Migration website as soon as they come.
The Effects of the Global Financial Crisis on Migration
In my view is important to distinguish between short- and long-term effects of the
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crisis on migration and integration. Short-term effects mentioned in some of the
reports include:
• Return migration of some migrant workers to their homelands as a reaction to
unemployment or lower earnings (this has been observed in the case of Polish
workers in Britain and Ireland).
• Reduced levels of migration from origin countries to destination countries.
• Attempts by governments to provide incentives to unemployed migrant
workers to leave (e.g. Spain), with mixed success.
• Specially large declines in irregular migration, which is especially sensitive to
availability of jobs (observed in the case of Mexico-US migration).
• Reduced remittances (money transfers) from migrants to their home
communities, leading to possible hardship in communities dependent on such
transfers.
• Increased hostility to migrants among majority populations, leading in some
cases to conflicts and violence.
However, long-term effects may be rather different and to understand the potential
impacts it is useful to look at historical precedents:
• The world economic crisis of the 1930s led to a massive decline of
international labour migration, and to return (sometimes compulsory) of many
migrants from countries like the USA and France (see Chapters 4 and 12 of
The Age of Migration). However, some of the decline was actually the result
of restrictionist policies adopted during and after WWI. For instance in the
USA, the ‘nativist movement’ campaigned against immigration, and major
restrictions were introduced in the early 1920s.In any case, many migrants did
not return home in the 1930s, but settled and became members of the
permanent population of receiving countries.
• The recession following the ‘Oil Crisis’ of 1973 (when OPEC states rapidly
increased oil prices) had enormous consequences for migration, but hardly
anyone predicted them. ‘Guestworker migration’ ended in Europe, and
processes of family reunion and permanent settlement started, leading to the
formation of new long-term ethnic minorities. Large corporations developed
strategies of capital export and a ‘new international division of labour’, which
led to the emergence of new industrial centres especially in Asia and Latin
America – and in the long run to new flows of labour migration. The recycling
of petro-dollars was the basis for an economic boom in oil states. In some
cases (such as Dubai and other Gulf states) this led to long-term economic
development; in others – like Nigeria – the oil profits were dissipated in
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corruption and luxury consumption by the elite, with few long-term benefits.
All-in-all, the 1973 crisis was a major turning point in global migration.
• The effects of the 1997-99 Asian financial crisis were more modest. Several
governments introduced policies of national labour preference and sought to
expel migrants – especially undocumented workers. In some cases, migrants
were scapegoated for unemployment and other social ills – like epidemics and
criminality. However, employers (for instance in the Malaysian plantation
industry) quickly discovered that many nationals were unwilling to take on
‘migrant jobs’, even in a recession. Such employers demanded an end to
expulsion policies. In any case, the interruption to economic growth in Asia
was only short-lived – after 1999 migration grew again and reached new
heights.
The lesson from these examples is that the effects of economic downturns on
migration are complex and hard to predict. The current crisis may have deep-reaching
effects that we cannot foresee. It is probably mistaken to believe that migrants will
serve as a sort of safety valve for developed economies, by providing labour in times
of expansion and going away in times of recession. When economic conditions get
bad in rich countries they may be even worse in poorer origin countries. Moreover,
migrants are not just economic actors, who follow income maximisation motives.
They are social beings, who put down roots and form relationships in new countries.
At times of recession, the motivation to migrate may be even higher than before, and
remittances may prove a resilient form of international transfer, because of migrants’
obligations to their families. Finally, global economic inequality and the demographic
imbalances between the ageing populations of the North and the large cohorts of
working age persons in the South will remain important factors in generating future
migration.
References
Catan, T. (2009) January 24 'Spain's Jobs Crisis Leaves Immigrants Out of Work:
With Prospects Worse Elsewhere, Few Takes for Government Campaign
Offering to Pay Legal Foreigners Who Return Home' The Wall Street Journal.
(New York City, NY).
http://online.wsj.com/article/SB123275552359911807.html
Chamie, J. (2009) Exporting people in Yale University (ed.) Yale Global Online.
(New Haven, Conn.: Yale University)
http://yaleglobal.yale.edu/article.print?id=11843, accessed 23 January, 2009
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Papademetriou, D. and Terrazas, A. (2009) Immigrants and the Current Economic
Crisis Migration Policy Institute (Washington DC: Migration Policy
Institute). http://www.migrationpolicy.org/pubs/lmi ... nJan09.pdf.
Ratha, D., Mohapatra, S. and Xu, Z. (2008) Outlook for Remittance Flows 2008-10
Migration and Remittances Team Development Prospects Group The World
Bank Migration and Development Brief (Washington DC: World Bank,).
http://www-
wds.worldbank.org/external/default/main?pagePK=64193027&piPK=641879
37&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&th
eSitePK=523679&entityID=000334955_20081204034714&searchMenuPK=6
4187283&theSitePK=523679.
The Economist (2009) 'The people crunch' The Economist 15 January.
Trinity Immigration Initiative (2008) Migration and Recession MCA Newsletter
(Dublin: Trinity College Dublin).
http://www.tcd.ie/ERC/pdf%20newsletters ... etter1.pdf.
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