How to lend and spend money to increase the gains from international migration

It has long been argued that even relatively small increases in global migration could result in gains that far exceed the total of all foreign aid or the total gains from relaxing all remaining trade barriers. The migrants themselves typically experience large, immediate, and persistent income gains that are much greater than from any other evaluated policy intervention that I know about. There are also broader benefits to sending countries through remittances, knowledge transfers, trade facilitation, and many other channels. Yet despite this promise, in two decades at the World Bank, I’ve only managed to work on one successful operational project that let more people benefit from such opportunities – work on developing and evaluating a seasonal migration program from the Pacific Islands to New Zealand. This led me to wonder whether I’m just missing out, and how much governments are borrowing and spending to facilitate more benefits from migration. World Bank Lending on Migration and Refugees In a recent paper just published in the journal World Development (ungated), Charlotte Müeller, Pablo Acosta and I look at this issue. We examine World Bank lending documents from 2014 to 2024 to examine how much got spent on international migration in a decade. We find the World Bank had 160 operational projects related to international migration and refugees over this decade, totaling $40 billion, of which $15 billion was allocated to components pertaining to migration. This represents approximately 5% of total World Bank lending, commensurate with the size of migrants and refugees in the world population, with the migration-specific components totaling 2% of lending. So at a very aggregate level, it seems like a lot is being spent. However, this money is heavily concentrated in a small number of countries (half of all spending was just in the eight countries Uganda, Lebanon, Jordan, Turkey, Cameroon, Bangladesh, Colombia, and Djibouti), and almost entirely for projects to help countries and their host communities cope with an influx of refugees. In contrast, only $110 million across 7 projects, or approximately $11 million a year over 2014-24, (0.015% of the World Bank’s annual lending) was dedicated to activities to increase international worker mobility or help better prepare workers for work abroad. Figure 1: Most migration-related lending is to react to refugees, not to help facilitate economic migration Another way of understanding the focus of projects at a high-level is through examination of the Primary Development Objective (PDO). The PDO is typically a single sentence intended to encapsulate the main goal of the project. Often this is a broad development objective (e.g. “The project development objective is to enhance access to lower secondary education by focusing on underserved populations in targeted areas” in a Ugandan project. Among the 87 that explicitly mention migration, 80 of the projects are around coping with a refugee influx, whereas only 7 have labor mobility as a high-level component. These 7 labor mobility projects over a decade are only 0.2% of World Bank projects. Figure 2 codes up the specific components of each project, to provide more detail on what money is getting lent and spent on. We see the most common activities are providing access to basic services for refugees in the host country, providing them with skills training and employment services, humanitarian assistance, and activities to build social cohesion with the host population. Very few are focused on improving the development impacts of emigration. Figure 2: Activities for Migrants and Refugees Included as Project Components Notes: Activities are from project components listed. Those shown in blue are typically for emigrants, those in red for refugees. Where are the opportunities to do more? The paper discusses some of the political economy, bureaucratic, and logistical reasons why more activities are not occurring. There are a number of pilot efforts underway, including several of the Global Skills Partnerships approach in which destination countries help develop and finance the skills of migrants. To date these have largely been small scale proofs of concept, such as a project to take 105 Moroccans to Germany and provide them with professional apprenticeships in the tourism and hospitality sector. The big question for those who want to see migration benefit more lives, is what is an effective way to spend tens of millions? That is, an amount sufficient to attract the attention of country directors and Ministers of Finance, and to provide better job opportunities for thousands of people. We have very few evidence-backed scalable solutions, but the paper discusses a few potential areas underway: · Improving TVET and linking to the skill and certification requirements abroad: Governments spend millions each year on technical and vocational education and training (TVET), with many concerns about the quality of such programs and how linked they are to market demand. Since money is going to be spent on this anyway, the idea is to spend it in a way that leads to better job outcomes not just at home, but also abroad. Projects in Bangladesh, Nepal, Papua New Guinea and Tonga aim to do this. Importantly, workers not only need to gain the skills needed for international jobs, but they need to be able to credibly signal that they have these skills to overseas employers. The Tonga project, for example, aims to ensure course qualifications will be recognized by Australian and New Zealand standards. A recent CGD working paper also discusses this potential of using TVET as a pathway to more mobility. · Large-scale facilitation efforts: Several African countries have recently set ambitious targets – Kenya aims to send 1 million workers abroad each year, Ethiopia 700,000, Tanzania aims to sign agreements with eight destination countries. These countries aim to do this through a package of programs: from signing bilateral agreements, holding job fairs and online platforms to connect workers to job offers, helping provide financing, and simplifying bureaucratic procedures. The paper gives one such example- Papua New Guinea, where a a $32 million loan has the explicit objective to “strengthen government systems in Papua New Guinea that support workers and their households to benefit from overseas employment opportunities”, with a focus on increasing employment opportunities in Australia and New Zealand. · Doing more for the migrants once they leave: To maximize the benefits of migration, it is not enough to create more opportunities abroad and connect workers to them – policy also needs to help them adjust and evolve so that this first job can build into something more for both the migrant and their home country. Often the focus has been on social protection – offering services to migrants abroad in case they experience trouble. But a more proactive policy can help them continue to develop skills while abroad, connect them to job and investment opportunities in the home country, and ensure that if they return, they can match into jobs that take full advantage of skills learned abroad. I’ll also note this post I wrote on specifically thinking of international migration as part of a structural transformation policy – where countries may want to consider migration as one of the industries it specializes in, and strategically use both emigration and immigration to increase skills and develop new sectors. What about philanthropy and the private sector? Many charities aim to increase the incomes of people in developing countries. But despite the enormous gains possible from international migration, there are few charities with proven solutions for using donations to expand migration job opportunities. Malengo is one with promising RCT evidence underway, helping fund the costs of African students going to study and work in Germany. But to date the scale is still relatively small, with just over 300 students in Germany. Talent Beyond Boundaries aims to help skilled refugees access skilled migration pathways and a recent early-stage evaluation shows some positive impacts, but with very few people in the sample getting to migrate in the evaluation window. I’m also intrigued by the very new Africa Jobs Fund, which aims to entrepreneurs to launch and scale high-impact ventures across two sectors: export manufacturing and international labor mobility. They have backed several organizations which aim to place African workers in Italy and Germany. It is exciting to see new approaches being trialed, and evaluations taking place – but still plenty of space for experimentation and I’m not sure yet where to tell a funder to invest $100 million in migration.