Reading note: How Migration Really Works

How Migration Really Works | Hein de Haas (2024)

I too am now a migrant

I’ve lived overseas before, but always with a rough return date in mind. Now, moving to London at age 29, for the first time in my life I truly identify with the word ‘migrant’.

Most Australians, wherever they are in the world, have a natural interest in - if not strong opinion of - migration. Australia prides itself on being one of most multicultural nations. Over half of Australians have a parent born overseas. Malcom Turnbull goes further proclaiming Australia as ‘the most successful multicultural society in the world’.

Hein de Haas’ How Migration Really Works cracked open my world view to the longer term ‘migrant story’.

Here in the UK, that story that plays out in the media is laced more-so with the word ‘threat’ than ‘opportunity’. Some of this is cultural. Australia is far more egalitarian both economically and socially. Yet part of that must be a fundamental misunderstanding of the history, nature, and forward-look for migration.

The faltering UK economy since 2008 has everyone searching for answers. Some are seeking to assign blame too. Alas correlation between slow economic growth and widely publicised negative migrant stories lead pundits to a pretty simple conclusion.

And yet, I still felt this story as I understood it was incomplete. This book was a solid crash course in why.

De Hass structures it in terms of ‘myths’ that are firstly explained, then corrected. I found myself flicking back and forward in the book to align different arguments or counterarguments that seem to conflict. What I now know is that like many things, the truth resists simplicity. I guess that’s why it’s never been easier to have a (strongly held) opinion on migration.

I’ve recommended this book to more people than I can count (niche, I know).

Here’s my best attempt in summarising just what I learnt.

Immigration is not new or particularly novel

This insight seems obvious in hindsight, but I didn’t know it before reading the book:

Current levels of international migration are neither exceptionally high nor increasing. In fact, over the past decades, global migration levels have remained remarkable stable.

De Hass even crunched the data from the United National Population Division for 1960-2017:

So, if we express the number of internal migrants as a share of the world population, we see that relatively levels of migration have remained stable at around 3 per cent.

I would have thought migration rates would have been more correlated with major geopolitical events, but as I discovered - it’s more a function of regional economics.

It takes money (and aspiration) to migrate

Most migrants come from middle income countries. They have some access to capital and education/qualifications, and most importantly have tangible aspiration - largely driven by peers or networks that have also migrated.

The push and pull model of migration (popularised by Lee in 1966, and taught to me in university in 2014) seems not to stack up to the modern evidence.

In the most extreme cases this model may be true (e.g. fleeing on a leaking boat to escape persecution). But for the majority the ‘pull’ factors are far more significant to overcome the significant obstacles of migration.

De Haas explains:

…emigration is highest from countries with moderate and rapidly falling levels of population growth. This has less to do with demographic factors than with the fact that these are typically middle-income countries where economic development and increasing education have led to a general expansion of people’s aspirations and capabilities to migrate. In fact, countries with the highest population growth, such as those in sub-Saharan Africa, actually tend to have the lowest levels of long-distance emigration.

There is an execption to this trend. Labour shortages in middle-income countries (due to an ageing population) may start to attract migrants from nearby low-income countries. De Haas goes further saying:

China seems bound to become a major migration magnet

This trend seems important and not talked about enough.

Most migrants do have jobs to come to

While there’s a myriad of reasons to pack up and move, de Hass shows a very close link between business cycles and immigration levels, concluding:

Destination-country labour demand is the main driver of international migration.

There’s a clear narrative for this too:

Although illegal migration attracts the most attention, it’s important to emphasize that the vast majority of migrants move legally, and that this legal migration is predominately driven by destination-country labour demand. It’s a myth that most migrants just how up at the border without having any idea what to do. This may be true for some young adventurous - there are always exceptions - but most people will only move when they have a concrete job offer, because they were recruited, or because family or friends living abroad told them about vacancies and other opportunities.

Again, this point seems obvious in hindsight. It also aligns with my own experience¹ and most around me.

The natural follow on question to the above is ‘well what jobs are migrants taking?’.

De Hass explains:

Contrary to what politicians tell us, most migrants do have jobs to come to. And, contrary to another popular belief, the biggest demand is not for higher-skilled workers by rather lower and mid-skilled migrants workers. Only a minority of immigrants fulfil the ‘expat’² stereotype of engineers, doctors, and managers. While immigrants are still over represented in manual jobs in fields such as agriculture, factory work, domestic work, food processing, cleaning and landscaping, an increasing number of migrant workers to mid-skilled jobs as plumbers, carpenters, builders, chefs, nurses and other caregivers.

I imagine this trend is highly country dependant (e.g. Australia’s skilled worker programme, the UK’s recent crackdown on visa sponsorships, and the US’ green card lottery).

While I accept the premise, seeing the data on a country by country level seems essential.

Is an immigrant going to come and take my job?

The passages above re. immigration being a response to labour demand also explains why the ‘take my job’ narrative is silly. De Haas writes:

It is true that lower-income earners have barely benefited from economic growth over the past forty years, and they have seen job security and labour standards eroding while the rich only get richer. However, immigration has barely anything to do with this. The idea that immigration is a major cause on unemployment and wage stagnation is not grounded in any evidence, because what seems a causal connection is in fact a spurious correlation.

If only more Britons could read this passage. If anything, de Haas makes an argument that immigration is propping up the welfare state:

…instead of a threat to welfare states, the immigration of foreign workers is vital for upholding healthcare systems and providing care for children and the elderly, particularly in strongly liberalised economies like with UK and US and weak welfare sates like Spain and Italy.

Government’s aren’t at the helm of immigration demand

Every national government wants to show it has control of its own borders. However de Haas shows that migration demand is oftentimes outside of government control.

When economic growth is high and unemployment low, job shortages increase. This makes is more likely that migrants will apply for jobs, get hired and qualify for work visas if they need one. In this way, modern immigration systems have a built-in flexibility in which the numbers of legally admitted migrants automatically fluctuate with the state of the economy…

…The opposite is applies during times of recession. With labour demand going down and unemployment rising, migrants who lose their jobs are more likely to return home, while would-be migrants workers are more likely to postpone their emigration plans.

This explanation seems to fit for most advanced western economies, but it seems incomplete for a nation like Australia (and potentially Canada?) where international student migration doesn’t correlate neatly with the economic cycle.

De Haas rightly points out though that regardless of the real drivers, governments are quick to claim a win:

When the economy is tanking, fewer people will come. Of course, politicians will be keen to take credit and ascribe any change to their policies, but the next time immigration goes down, remember that rising unemployment is a more likely cause of the plummet.

Migrants look after themselves - if we let them

I’ve long thought that ‘settling services’ (loosely defined as state support for recent migrants) are critical to ensure effective social cohesion. That was until I became a migrant. In my experience once you have a job and a skeleton support network - you want very little to do with the state.

This experience seems to be common (if not obvious) for most migrants. De Haas makes a strong case that migrants integrate well into their new home countries as long as there’s no policy barriers:

Much more than official ideologies, what really seem to matter are bread-and-butter issues such as migrants access to education, work, and housing.

He continues:

The worst policies seem to be those that discourage or prohibit migrants and refugees from working. Nothing seems more detrimental for he well-being and economic contribution of migrants and refugees than to force them to remain in legal limbo zones for yeas because of administrative backlogs and appeals procedures.

This is a major win for policy makers. Rather than ramp up fiscal support, it’s the removal of policy barriers (which is far cheaper) than produces bang for the buck.

Migrants overwhelmingly pay their fair share

Many pundits comment on the ‘welfare narrative’ that migrants come and drain state resources with little financial contribution themselves.

De Haas explains that the evidence clearly doesn’t support this narrative. The ‘fiscal ratio’³ (fiscal contributions divided by fiscal costs) of foreign versus native people has been studied extensively over the past decades.

De Haas notes there’s some quite clear trends in just about every country:

Fiscal impacts change over immigrants’ lifetimes, typically following a U-shaped pattern - first positive, then negative, and then positive again as migrants get older. Recent immigrants tend to be net contributors to public finance, as they are generally young, employed, healthy and have no children. However, as migrants settle, marry, have children and become older, they may become a net cost to public finances, as they increasingly use public services like schools and healthcare. Fiscal impacts tend to turn positive again once immigrants’ children finish schooling and enter the labour market. However, when migrants grow into old age, their labour participation decreases and they are more likely to use health and elder-care facilities. This U-shaped pattern where fiscal costs change through the life cycle is not a particular feature of migrants, however, as it also applies to native workers.

What’s more, this impact multiples throughout generations. De Haas explains:

Things almost always improve as new generations grow up. As lower skilled immigrants and their offshoots climb the education and economic ladder, the average fiscal contributions of immigration improves as the new generations come of age.

Again, this shows the importance of removing barriers to work or education if we want to see an economic return from migration.

There’s no magic pudding in migration and growth

De Haas makes it clear that rich countries are the clear winners for migration. Taking the evidence they are net contributors to fiscal balances, and the economic theory they they will be self sustaining producers and consumers of goods/services - it’s a boon for the destination country.

While it’s true migrants do send large remittances home, the lost of human capital is equally as large. De Haas estimates the net effect on the origin country to be near zero:

While there can be little doubt that (freer) migration can considerably contribute to personal, national and eve global prosperity, the crucial question is how the benefits are distributed between origin and destination countries, as well as between richer and poorer members within societies. With regard to International inequalities, there can be little doubt that destination societies reap more economic benefits from migration that origin societies. This is because the labour of migrants primarily boosts economic productivity and profits in destination societies. Immigration benefits growth in destination countries by expanding the size of their population and economies and by stimulating innovation and investment.

With global remittances at an all time high (Afghanistan, Ukraine, CAR, etc), it’s good to remember that migrants are largely seeking better economic opportunities elsewhere for a reason.

Women on the move, with other women taking their place

De Haas describes an elegant narrative whereby western women (I think he really should just say ‘rich’ women) entering the workforce and having less children creates labour demand in the service sector:

So, the combined effects of increased education, women’s emancipation and falling birth rates have reduced the supply of local workers and increased demand for migrant workers in the service sector, who are increasingly women themselves. As Western families progressively moved away from the classic breadwinner model - with men working outside the house and women staying at home - the modern norm became that both partners worked. As a consequence, women have become less available to do the domestic chores such as cleaning, cooking, laundry and child rearing that were traditionally seen as ‘female’. This helped to fuel the growing migration of demand domestic and care workers.

This is a neat story, particularly if you add on senior and elder care workers.

Again, I suspect the inter-country differences here would be large.

Getting the crime causal effects correct

In both the US and the UK, the migrant/crime connection is bolstered by media and politicians alike. De Haas tackles this ‘myth’ head on:

A major survey conducted in 2010 revealed that one-third to a half of people in major Western immigration countries think that immigration increases crime, and between half and three-quarters think that illegal immigrants increase crime.

How valid is this perspective? It’s surprisingly difficult to measure: De Haas explains:

For instance, when immigrants settle in urban neighbourhoods that already had higher crime rates, correlations between immigration and crime can be spurious. As young men commit most crimes, an over-representation of migrants in crime statistics may just reflect the fact that many migrants are young men.

From the studies that do disentangle these relationships, what have they found?

Even though immigrants have on average lower levels of education and lower wages than the native-born population, most studies show that immigrants are generally less likely to commit crimes that the native-born. On average, neighbourhoods with high concentrations of immigrants have lower rates of crime and violence than comparable non-immigrant neighbourhoods. Another pattern is that, if immigrants are involved in crime, it is non-violent crime such as car theft and burglary - particularly among unemployed and poor immigrants - and they are heavily underrepresented in violent crimes such as aggravated assault, rape and murder.

This goes quite clearly against the mainstream narrative portrayed in both the US and UK media. So what about the ‘ethnic enclaves’ breeding poor behaviour narrative? Again, it’s been studied:

Another study that analysed trends of immigration and crime across England between 1971 and 2002 concluded that, in line with research from the US, neighbourhoods actually tend to become safer as more immigrants move in. It found that crime is significantly lower in ethnic enclaves where immigrants form at least 20 to 30 per cent of the population.

Key takeaways that have ‘updated my priors’

It’s the economy, stupid:

The reality of migration contradicts political narratives claiming that ‘we don’t need lower-skilled workers’. There is a real and consistent demand for lower-skilled migrant labour. In fact, the demand exists at all skill levels. Migrant workers are not as ‘unwanted’ as politicians claim. And they are generally not pouring in via desperate and irrational attempts to reach the Wealthy West. In reality immigration is primarily driven by labour demand.

Would be migrants would be taking a tremendously bad bet to rely on welfare in their new home:

The welfare magnet hypothesis is based on the assumptions that (1) many people migrate to live off benefits, (2) access to welfare is instantaneous and (3) immigration is free. All three assumptions are problematic.

‘Native’ born populations tend to be uncomfortable with ethnic enclaves (that they can easily see), however the evidence shows these communities are fundamental for migrants establishing themselves:

This crime-reducing effect was found to be particularly large in ethnic enclaves where immigrants from the same ethnic background concentrate, presumably because of the social control such communities can typically offer. This resonates with evidence reviewed in the previous chapter that, contrary to the ‘ghetto’ stereotype, the type of ethnic enclaves where new migrants tend to concentrate often provide community life that fosters informal social control, solidarity, and entrepreneurship.

Migration highlights where out existing social/justice systems aren’t up to scratch. When migrants become marginalised, they suffer from the same fate that all marginalised groups face:

Besides the problem of racial profiling, crime is strongly linked with economic marginalisation and particularly the socially, morally and mentally crippling consequences of racist discrimination and long-term unemployment. This shows these problems can only really be tackled if effective law enforcement is combined with policies that actively counter racial profiling and job market discrimination and give disadvantaged youth real opportunities for social mobility through education and work - regardless of their racial or ethnic background.

Migration isn’t going to fix plummeting fertility rates, simply because the number of migrants (which has been 3% of global population for decades) is simply too small, and migrants age just like the rest of us:

For the United Kingdom, keeping the support ratio constant would require more than 1 million immigrants annually - more than five times the average net migration in 2011-21 of around 200,000.

Final thoughts and unsolved questions

I now know that migration is a predominately function of economics and labour markets, despite what we hear from our politicians and media outlets.

Migrants, when they ‘settle’ well, are almost always net beneficial both socially and economically. It turns out the best things government can do to help migrants ‘settle’ is reduce any restrictions to starting work, and ensure kids can get to school.

These lessons seem basic in hindsight, but non-obvious when you observe out current political discourse.

After all this reading and thinking on migration, I’m left with many unresolved questions, to which I suspect there’s not a single answer:

• What is the ideal ‘level’ of migration to achieve sustainable growth and social cohesion? How much does this change country to country (e.g. Australia vs the UK vs China) depending on regional geography and historical societal connections?

• How should we manage migrants that are already in-country illegally (some for decades). Should the focus be on giving full work rights and access to education (the theory seems to say so)? However, this is terrible politics. I suspect the answer lies somewhere in the middle.

• What is the best way to process refugees and asylum seekers? That includes those that are found to be non-genuine (e.g. practice of returning to home countries or other countries). To what extent is the destination country preference of genuine refugees or asylum seekers the critical variable in the economic success?

• How has the political narrative on migrants become so devoid of the facts? Has this always been the case?

If anything, Hein De Haas’ How Migration Really Works really highlighted how much I still have to learn.

1. I’d add another ‘source’ of motivation - which is you see other people move abroad who are just as (if not less) equipped/resourceful than you and think ‘surely I can do that too’ - job in hand or not.

2. I don’t subscribe to the linguistic hierarchy of calling migrants from the west ‘expats’. I reckon if you move overseas to work you’re a migrant worker - myself included.

3. Same as a dependancy ratio