Despite the fact that physical migration is easier than ever because of improved lower cost transportation and communications, the fraction of people who migrate worldwide hasn’t increased much in recent decades and currently stands at 3.3 percent of world population, or 281 million of which 32 million are refugees and the rest are economic migrants and overseas workers. Economic migrants predominantly move to, or work in, high income countries: the US has the most migrants of any country in the world with 46 million residents who were born elsewhere. Other high-income countries with large migrant populations include the countries of Western Europe and the oil rich Arab states. In the Arab states, up to 90% of workers are temporary migrants working under direct employment contracts. In Europe and the US by contrast, most migrants are permanent residents or citizens.

Given that birth rates are below the replacement rate of 2.1 children per woman in most high-income countries, immigrants are often the difference between a shrinking population and one that is stable or slow growing.  Japan, a high-income country with a low birth rate, has failed to attract immigrants, has a declining population, a declining GDP, and declining GDP per person. The baby boom and extended life expectancy are aggravating the problem of low birth rates by increasing the number of retirees that must be supported by each worker. Immigrants, who arrive early in their work lives help keep this ratio from increasing in wealthy countries.

Economic studies show that immigrants in high income countries contribute directly to GDP growth, probably do not have much impact on overall productivity and wages, but continuing in-migration can negatively impact the wages of natives and prior migrants in occupations that extensively employ migrant workers. Immigrants can increase economic inequality, but this effect is small, perhaps explaining 5% of the increase in inequality in the US over the last 3 decades.

Looking at the flip side of migration, there is a large flow of money from economic migrants and overseas workers back to their families in their native countries, $657 billion in 2019, which is about four times official development aid from rich countries to poorer ones, and about one third as large as world foreign direct investment. This flow doubles the income of families with overseas workers in many countries, which in turn increases local demand and grows the sending countries’ GDP. On the other hand, the emigration of skilled workers and highly educated professionals and scientists from poorer countries to richer ones, “brain drain”, can significantly reduce poorer countries human capital. The effects of wages sent home, and the countervailing brain drain on a country, depend on the conditions and policies in place in that country. Absent a stable government, a suitable legal and regulatory environment, and lower levels of corruption, wages sent back from overseas are not sufficient in themselves to further development.