Benefits and Challenges of Economic Migration

This essay discusses the potential benefits as well as the credible challenges which the phenomenon of economic migration brings for the host countries, with the help of real life examples of the contemporary global economies.

Running head: BENEFITS AND CHALLENGES OF ECONOMIC MIGRATION
Benefits and Challenges of Economic Migration
Name of the Student
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Author Note

1BENEFITS AND CHALLENGES OF ECONOMIC MIGRATION
Introduction
Over the years, the global economy has experienced considerable changes and
dynamics and has become more inclusive, integrated and interconnected, thereby facilitating
not only exchange of goods and services but also businesses and individuals to migrate from
one country to another. The word, “migration” in this context, refers to the activity of leaving
one’s home country and settling in a foreign country temporarily or for a long span, usually
for the sake of having a better life (Abel & Sander, 2014). Migrations can take place for
many reasons, the primary one of which is economic. Economic migration, as a continuous
phenomenon in the contemporary world, has considerable implications (both negative as well
as positive) on the source countries as well as on the host countries, where the individuals
tend to migrate (Olgiati, Calvo & Berkman, 2013). Keeping this aspect into consideration the
concerned essay tries to discuss and analyse the potential benefits as well as the credible
challenges which the phenomenon of economic migration brings for the host countries, with
the help of real life examples of the contemporary global economies.
Economic Migration
Economic migration, being the most common form of migration refers to the
emigration of individuals from different countries to other places in search of a higher
economic abundance and standard of living than what exists in their home countries. Over the
last few decades, this sort of migration has increased considerably, the pattern of the same
being mostly from developing or poorly developed countries to developed and economically
and industrially sound ones (Castles, De Haas & Miller, 2013). Much of this can be attributed
to the fact that in most of the poorly developed economies, there remain an excessive
pressure in the labour markets due to the presence of considerable number of working-age
population and the absence of appropriate number of suitable jobs to absorb them, which

2BENEFITS AND CHALLENGES OF ECONOMIC MIGRATION
clubbed with the increased ease of international travel, induces many from these countries to
move out and settle especially in those regions where the economy and the employment
sector performs well.
The trend of economic migration is seen to be increasing and becoming a common
incident in the contemporary world, which in turn have considerable implications on the host
countries. While the increasing inflow of working age population is expected to benefit the
economic growth and efficiency of these countries, the increase in the diverse population also
brings some challenges, both of which are elaborated in the following section.
Benefits of economic immigration on host countries
There lie several considerably positive implications on this type of immigration on the
host countries. For effective utilization of all the productive resources of a country, sufficient
manpower is required. Inflow of economic immigrants often contribute to the supply of a
diverse, multiskilled labour force and can also help in production of many goods and
services at a lower cost or with higher efficiency (Papastergiadis, 2018). The economic
immigrants, generally coming from the poor or industrially starved countries, help in filling
up the low wage jobs in the host countries like that of agricultural or basic manufactural
labours, which are not usually opted for by the residents of the country. This in turn helps the
economy of the host country in the aspects of greater productivity and economic abundance.
This has been especially true for the countries like that of the USA, which being a capital
resource rich country has been considerably benefited from the inflow of cheap and efficient
labour in the form of economic immigrants from different countries (Greenwood, 2014).
As discussed above, the inflow of economic immigrants leads to efficient and
optimal utilization of productive resources, which are in general abundantly present in the
host countries, thereby leading to the development of efficiencies and economies of scale in

3BENEFITS AND CHALLENGES OF ECONOMIC MIGRATION
most of the industrial sectors as well as the subsistence sectors (mainly agricultural) of the
country (Lutz, 2016).
Figure 1: Net Contribution of Immigrants to the economy of UK
(Source: News.bbc.co.uk, 2018)
As is evident from the above figure, the tax collected from the immigrant population
of host countries also act as a simulator for the economic growth of the countries.
Most of the economic immigrants, willing to work at lower wages than what exist
normally in the host countries, tend to keep the cost of production of the goods and services
in the country at low levels, thereby helping in keeping the inflation levels controlled in the
host countries. On the other hand, the inflow of such population and their absorption in the
employment sector also leads to increase in the demand for different goods and services,
which in turn helps the local industries to prosper (Boski, 2013). Apart from infusion of
diverse skills, economic immigration also helps in building up of robust international
relations between the source and the host countries, which in turn helps in building up of
multi-lateral business connections among these countries, thereby benefiting the economies.
This can be seen in case of the relationship between Australia and China in the recent years,
which have benefited commerce between them (Gilpin, 2016).

4BENEFITS AND CHALLENGES OF ECONOMIC MIGRATION
Challenges of immigration for host countries
The inflow of low waged workers in the form of economic immigrants, however, help
the businesses to shift to such workers in place of high waged local residents, which in turn
also forces them to work for lower wages in face of competition, thereby decreasing the
economic welfare of the local residents. Another crucial adverse impact of economic
immigration, which is often felt by the host countries, is the increase in the crime rate in
these countries, which often destabilizes the social equilibrium. Many countries like the USA,
the United Kingdom and the Australian economy has seen an upsurge in the crime rates,
which in turn has led to severe panic and dissatisfaction among the nationals of the country,
thereby making it challenging for the governing authorities to smoothly absorb immigrants in
the workforce. Increase in economic migration also leads to drainage of resources to some
extent as most of the migrants tend to send a considerable amount of their earnings to their
families in their home countries (Greenwood, 2014).
Conclusion
From the above discussion, it is evident that there lie considerable benefits as well as
challenges of economic migration to the host countries which tend to intake such population.
On the positive side, while economic immigration leads to increase in low waged and
diversely skilled labour force, thereby leading to more efficient utilization of productive
resources and increased productivity and growth of the economy and also help in building
economic and commercial relations with the source countries, the infiltration of such
population often tend to decrease the overall wage in the economy due to excess labour
supply and also contribute in higher social instability and dissatisfaction among the residents
of the country, the effects of which are not only borne by the government of the countries but
also to some extent by the economic migrants. This, thereby makes it a challenge for the

5BENEFITS AND CHALLENGES OF ECONOMIC MIGRATION
government of the host countries to decide optimally on the trade off between the benefits
and problems of economic immigration and design their policy frameworks accordingly.

6BENEFITS AND CHALLENGES OF ECONOMIC MIGRATION
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