Rotational migration – Conversable Economist

The problem of migrating across international borders in search of better economic opportunities is linked to the idea of ​​becoming a permanent resident and then a citizen of the host country. Can these elements be separated? The idea behind rotational migration is that people migrate for a period of time, and perhaps only to a specific location, and then return to their original starting point. Lant Pritchett offers some thoughts on this idea in an interview with Shruti Rajagopalan. (DiscourseIdeas India: Reforming Development Economics, June 9, 2022).

I will add that this is actually the second part of the interview, and part 1 looks like “India Ideas: Where Development Economics Went Wrong?(March 17, 2022). Pritchett has strong opinions on many topics, including his dislike of the use of the $1.90 poverty line for consumption per day in developing countries and his opposition to randomized control trials. Agree or disagree, it is worth listening to him.

Pritchett discusses the situation in India, where there appear to be great potential benefits from moving from some poor rural areas to more densely populated areas. Some people do it. But many others only migrate for short periods or certain seasons, in part because they are concerned about losing what they see as the primary security of their rural property. He says:

I think a lot of people in India in the countryside have a lot to lose. Hence, it freezes them in place, because they cannot make a good profit from it, take a lump sum and move to the city. They cannot, as a family unit, as a census unit, move to the city without only risking losing their property. Someone has to stay at home.

I think you are getting a lot of partial migration, meaning parts of the household are moving. My guess is that the census radically understates this. I heard when I was living in India in 2005 or so, there was a famous Indian sociologist who basically said, “Look, if you go to the villages in India, there’s nobody there.” The census can underestimate migration by half.

If you had 200 million people in India who moved, out of a population of 1.3 billion, that seems to be consistent with a true mobility gain. They will move on a rotational basis, because in some sense they will not give up their claims to a family farm, a family plot.

This means that it leads to a completely different set of assumptions about India’s response to change after, say, liberalization in 1991. I think the people who bet on staying in the countryside made a big mistake. Much of the disparity in inequality in India is the result of slightly taller people who owned a small piece of land and thought, “Well, I can’t give that up to move to the city.” It turned out then that owning a small piece of land in rural India is not a good long-term bet.

In the context of the US economy, this idea of ​​rotational mobility raises two interesting questions: one about mobility within the US, the other about immigration to the US.

With regard to mobility in the United States, historically, some people from low-income areas have migrated to higher-income areas. However, as housing prices have soared in some urban areas, the economic incentives for such migration have diminished. Right, there is evidence that if a low-skilled person moves to an expensive area in the US, the higher cost of living in the new area can easily more than offset any higher wages they receive. therefore, this step does not provide an economic benefit. What if labor market institutions existed to allow people to migrate from low-wage areas to high-wage areas in the United States for a limited period of time so that they could enjoy the benefits of higher wages without facing the worst effects of high wages ? the cost of living?

With regard to immigration to the United States, what if there was a practical way to force workers to come for a limited time or only to a certain region? Pritchett says:

I never talk about open borders; I’m talking about greater labor mobility. And the reason I’m talking about more labor mobility is because I think there’s a lot of tension in the world. Wealthy societies simply age under truly extraordinary conditions. So people are talking about low population growth, but low population growth is not the problem. The problem is the inversion of the demographic pyramid. And the inversion of the population pyramid creates societies that simply have too few workers compared to the number of retirees. And it inevitably gets worse and worse over the next 30 years. Now the difficulty is that in most cases the mode of mobility of people around the world has worked since the 1920s in that people who are allowed to work in a country are either citizens or are on their way to citizenship in the country.

In fact I am a big believer in separating the two and claiming that the labor needs of the US, Germany or France are not being met. Because if the only way a person can come and work in France – to care for the elderly or perform relatively low-skilled services – is to allow that person to become a French citizen, the political consensus is not. We prefer not to have a service.

I don’t know if you remember that scene from “Matrix“Where Neo meets the architect and says, ‘Look, we will destroy the people.’ And Neo says, “Well, if you destroy the people, then you won’t have all the services that you get from these people.” And the architect says: “There are levels that we are ready to go.” And it seems to me that the rich world is increasingly saying, “There are sacrifices we are willing to make if our only choice for people to work in our country is to put them on the path to citizenship,” which, given the scale flows will inevitably change everything about society, politics and everything else.

people like Paul Collier writes a saying“Look, people just want that sense of national identity. And therefore, if you force them to choose between maintaining their national identity and satisfying their existing labor needs, they will make the hard choice in favor of national identity,” which I think we have. I think if we really had rotational mobility, where people could come and do labor services, but not necessarily be immediately on the path to citizenship, that could be a big win-win thing. This would be a win for countries that need labor. This would be a win for the workers who are moving. This would be a win for the sending countries.

Open borders mean that these concerns about national identity will disappear or ease. I don’t look at any rich country and I don’t see these fears waning. … It doesn’t look like the world is getting friendlier to open borders. However, the need for this workforce, in my opinion, will become so huge that there must be some intermediate solution. I think a well-regulated industry that allows rotational mobility is a huge, huge opportunity. …

For a very long time there has been mass emigration from the rural areas of large parts of America. I don’t see Cleveland, or Toledo, or Mississippi, or many other places under the superpowered pressure of NIMBYism. If you could calm people down [current US residents] that these people [immigrants] are going to come and work, they will become part of the local economy, but we make no prior commitment from the minute they arrive that they are on their way to citizenship. Again, I’m not saying that every rotational mobility doesn’t have a path to citizenship, but it doesn’t happen immediately and automatically. …

In particular, by the way, if you could make shift migration a regional specificity, I think this would greatly change the political dynamics. If you could give a person a visa to work in the United States, but they could only work in certain areas of YIMBY, then of course the whole national dynamic that everyone cares about is that all migrants want to go to Silicon Valley or all migrants who want to to go to New York, can be addressed.

The difficulty is that these discussions are not even discussed. No one even talks about all the different ways that very smart rotational labor mobility could be designed and used, and all the benefits that could be gained if we had this legally enforceable mobility associated with industry. I think if we started thinking seriously about it, we could develop and design things that would overcome some of these political considerations. We have to be open to — not all labor mobility is citizenship.

The classic argument against rotational migration is that, whatever its theoretical merits, in practice it becomes a loophole for more immigration. One classic example is the experience of Germany, which a few decades ago received guest workers with the clear understanding that they could be sent home. However, Germany then discovered that, as a practical matter, once people arrived, became neighbors, fell in love, had children, and entered society, sending them home became something almost practically impossible. As the Swiss writer Max Frisch once said, “We imported workers and got men instead.”

But the pressures of low birth rates and population aging in the US and other high-income countries will exert their own pressure. Perhaps you should rethink rotational migration.