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Sharon Stanton Russell
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1 6 0
1z1
World Bank Discussion Papers
International
Migration and
International Trade
Sharon Stanton Russell
Michael S. Teitelbaum
The World Bank
Washington, D.C.
Copyright O 1992
The International Bank for Reconstruction
and Development/THE WORLDB ANK
1818 H Street, N.W.
Washington, D.C. 20433, U.S.A.
All rights reserved
Manufactured in the United States of America
First printing May 1992
Discussion Papers present results of country analysiso r research that is circulated to encourage discussion
and comment within the development community. To present these resultsw ith the least possible delay, the
typescript of this paper has not been prepared in accordance with the procedures appropriate to formal
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Sharon Stanton Russell is a research scholar at the Center for International Studies, Massachusetts Institute
of Technology. Michael S. Teitelbaum is a program officer at the Alfred P. Sloan Foundation.
Library of Congress Cataloging-in-Publication Data
Russell, Sharon Stanton, 1944-
International migration and international trade / Sharon Stanton
Russell, Michael Teitelbaum.
p. cm. - (World Bank discussion papers; 160)
Includes bibliographical references and index.
ISBN 0-8213-2116-1
1. Emigration and immigration-Economic aspects. 2. Ermigrant
remittances. 3. International trade. I. Teitelbaumn,M ichael S.
II. Title. III. Series.
JV6118.R87 1992
304.8'2-dc2O 92-12848
CIP
iii
Foreword
As this report demonstrates, international migration is an issue of
increasingi mportancea nd interest,f rom severala spects. The heightenedc oncern
over migration flows in Western Europe is only one of several migrant receiving
areas where such concerns have arisen. Globally, the pressures for migration
appear to be rising, with rapid growth in the working age population in the
developing countries,t he widening income differentialsa mong countries,a nd the
reduction in the costs of transportationa nd communication. The main area of
interest of this Department,b ut only one of the areas of interest to the World
Bank, is the important role which workers' remittances now play in the trade
account of developing countries. As recent events have shown, and as the report
demonstratesm ore broadly, this source of foreign earnings can be very volatile.
The report was commissionedt o give a detailed account of recent trends in
migration by region, both sourcing and receiving regions, and to provide an
estimate of the global flows of remittances. As well, the authors were asked to
suggest areas for further research. It is hoped that the detail provided on
migration patterns, old and new, on the estimates of remittance flows and the
publication of the detailed data underlying them, and the discussion of
developmentsi n the role of internationalm igration in trade in services will be
of use to policymakers concerned with these issues and to other researchers
working in this area.
D.C. Rao
Director
InternationalE conomics Department
iv
Acknowledgements
The authors wish to thank Mr. Ronald Duncan of the InternationalE conomics
Department for his guidance as Task Manager for this study, and Ms. Noga Lewin,
IECIT, for preparationo f the basic data files. Ms. Lourdes Pagaran,W orld Bank
Graduate Scholar at MIT, provided invaluabler esearch assistance in organization
and analysis of the remittance data and preparationo f the final tables.
v
Table of Contents
Page No.
Summary ........... vii
I. INTRODUCTION ........... 1
II. TYPES OF AND TRENDS IN INTERNATIONAL MIGRATION. 2
A. Conceptualizing International Migration. 2
B. General Trends. 6
C. Regional Trends. 9
III. REMITTANCES FROM INTERNATIONAL MIGRATION .28
A. Conceptual Issues .28
B. Recent Trends in the Volume of Remittances .30
IV. KEY ISSUES IN INTERNATIONAL MIGRATION AND TRADE .33
A. Trade, Aid, and Development: Can They Stem Migration? .33
B. Migration and Trade In Services. 36
C. Conclusions and Implications for Further Research .42
V. REFERENCES ......... 44
Tables ......... 50
Annexes ......... 57
vi
List of Tables
Table 1 - EconomicallyA ctive Populations1 970-1990 and 1990-2010
Table 2 - Distributiono f Remittance Credits, World Total, 1980-1989
Table 3 - Distributiono f Remittance Debits, World Total, 1980-1989
Table 4 - Share of Total Remittances to GDP for Selected Countries,
1980-1989
Table 5 - Share of Total Remittances to Merchandise Exports for
Selected Countries, 1967-1989
Table 6 - Share of Total Remittances to Merchandise Imports for
Selected Countries, 1980-1989
Table 7 - Distributiono f Remittances,S wamy's Selected Countries,
1980-1989
List of Annexes
Annex I:
Table 1.1 - Global Worker Remittance Credits, 1980-1989
Table 1.2 - Global Migrants Transfers Credits, 1980-1989
Table 1.3 - Global Labor Income Credits, 1980-1989
Annex II:
Table 2.1 - Global Worker Remittances,D ebit, 1980-1989
Table 2.2 - Global Migrants Transfers, Debit, 1980-1989
Table 2.3 - Global Labor Income, Debit, 1980-1989
Annex III:
Table 3.1 - Total Remittances,S elected Countries (Swamy) 1980-1989
Table 3.2 - Inflows of Workers Remittancesf or Selected Countries
(Swamy) 1980-1989
Table 3.3 - Inflows of Migrants Transfers for Selected Countries (Swamy)
1980-! °os
Table 3.4 - Inflows of Labor Income for Selected Countries (Swamy) 1980-
1989
vii
Summary
This paper reviews the major types of internationalm igration and recent
global and regional trends in population movements, as well as conceptual
issues and recent trends in the volume of remittance flows. The paper further
considers the extent to which trade, aid, and developmentc an be expected to
stem future migration flows, the role of internationalm igration in trade in
services, and implicationsf or future research.
The number of internationalm igrants is large--conservativelyu pwards of
100 million people--andp otentiallyr ising as the result of demographic
pressures and labor force growth in developing areas, widening economic
differentialsa mongst countries, and the extension of transportationa nd
communications. Migration flows are heavily concentratedi n a few world
regions and are increasinglyv olatile and unpredictable,w ith political as
well as economic causes and consequences.
Financial flows associated with internationalm igration are also large:
official remittancesw ere nearly US$ 66 billion in 1989, second in value only
to trade in crude oil and larger than official developmenta ssistance. As the
Gulf war demonstrated,h owever, remittance flows are vulnerable to sudden
changes. Migration is central to trade in services, including some previously
considered 'non-tradeable". Remittances alone constitute about 8.5 percent of
the total value of world trade in services and reflect only a fraction of the
total financial flows associated with internationalm igration. While there is
general consensus that flows of capital and goods should be free, there is no
such agreement on the movement of people.
Over generations,r apid economic developmentc an be expected to moderate
the pressures that produce out-migration. Over the short term, however,
developmentc an increase the propensitiesf or movement, both because
developmenti tself alters previous social and economic patterns, and because
trade, aid, and developmentp olicies often unwittinglyw ork at cross purposes.
There are a number of research issues relevant to migration and trade.
Measurementso f financial flows can be improved by better understandingt he
reporting, recording, and directions of official remittances,a nd by
documentinga nd estimating the volume of trade generated by international
migration. Case studies of the role of migration in expansion of banking
services and of "intermediaryt ransactions"i n migration processes are but two
examples. Little is known about the extent to which national policies toward
in-migrationi mpede trade in services; a survey of firms across selected
industriesm ight shed light on this issue. The indirect effects of migrant-
importing strategies on the subsequent economic trends and trade positions of
receiving countries in selected industries remain to be assessed. There is
little documentationo f the economic and trade consequencesi n countries with
policies to train workers for internationale xport, and a need to assess the
trade potential of developing new labor intensives ervices in sending areas.
The adoption of measures to address the potential for migration from Central
and Eastern Europe offer new opportunitiest o understand interactionsa mongst
migration, trade, aid, investment,a nd development,a s do the "turnaround
cases" (e.g., Italy, Spain, Portugal) of countries that have shifted or are
shifting from being areas of emigration to ones of immigration.