Net Benefits

How to Understand the Economic Impact of Migration

Tesfagebriel Abraha, an Eritrean asylum-seeker, works during an apprenticeship in Dortmund, Germany, August 2015.   INA FASSBENDER / REUTERS

To understand the economic stakes in Europe's refugee crisis, start in an unlikely place: the South Pacific island of Tonga. In 2006, the World Bank brokered a deal between this impoverished microstate and nearby New Zealand. Tonga would satisfy New Zealand’s unmet need for fruit pickers by sending some of its citizens to its wealthy neighbor; New Zealand would provide those citizens with employment. The experiment increased the income of participating Tongan workers by a factor of ten, an effect that dwarfed the potential benefit of any imaginable aid program. With this extraordinary leap in income came improvements in everything from the quality of workers’ homes to the school performance of their children. The program cost New Zealand nothing.

As in Tonga, so in Europe and across the world: the cross-border movement of people can boost prosperity more powerfully than other forms of globalization. Trade liberalization can expand countries’ output

Loading, please wait...

Related Articles

This site uses cookies to improve your user experience. Click here to learn more.