Tuesday, 9 November 2010

Emigration

It has been a commonly held misconception that emigration has always had to have a detrimental effect on the economy of the donor country. On the other hand, this overlooks many key benefits. The reasons for this tend to be quoted as a "drain" of intelligence as the smartest people leave for work elsewhere, taking the state invest of education with them, and a depletion of human capital.
The primary reason for emigration, most certainly in Europe and illegally internally in China is for jobs. Not only is this because pay is higher elsewhere, but because the donor country has unemployment. The rush for those on the dole to leave alleviates the state greatly as they have to pay less benefits. It is also very note-worthy to account for the high remittances these emigrants are sending home. Certainly in China it has become somewhat of an expectance for parents to leave rural villages to finance their child's well-being and education by moving to the big cities, which is great for the economy. In many ways this turns the emigrants into a export, further better for the economy as this constructs trade. In Lithuania 2007 3.7% of the country's total GDP was attributed to remittances.
Emigrants have a history of imprinting their culture onto the receiving country. This can create demand for donor country's goods abroad. Furthermore homesickness of those abroad can stir demand for foreign exports amongst the migrants abroad.
Also, not all emigrants are permanent. As stated, family's are left behind to fund, which any worker one day expects to return to.
Another oft-cited criticism is a drain in workers for the donor. This can be seen as a blessing though. The reduction in supply of labour allows women to step into employment, a social change missing in many developing countries, that encourages gender equality.
Additionally, to attract more workers the donor countries employers will be forced to raise wages, which once reach a competitive level to abroad, could in the long run sort any migration problems out by itself. Employee power is bettered as the reduction in available labour creates a "buyers market" if you will in jobs.
The general conclusion here is that while it is still difficult to in reality do an effective cost benefit analysis, the theory so far has made some glaring omissions and it is unfair to assume that emigration must certainly be detrimental when so many good reasons for it exist.

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