By Milena Nikolova (University of Groningen)
Starting with the first dispersals of humans out of East Africa into other parts of the globe some 70000 years ago, migration has been shaping the course of humanity. Some scholars have even linked current inequality between countries to the consequences of these past migration patterns and the genetic diversity they generated.
Fast-forwarding several thousand years to the present day, most human beings now live in material prosperity that seems unprecedented from a historical viewpoint. The powerful forces of globalization and technological change have improved living standards worldwide. Yet, economic progress has not lifted all boats, which has caused rising inequalities within countries. Individuals with the “right” skills, technology, and capital typically gain from globalization and technology. At the same time, those performing routine tasks or working in jobs negatively affected by trade and offshoring have had a less fortunate fate.
Trade and technology have mostly negatively affected people working in middle-skilled jobs, thus leading to the hollowing of the middle class in many countries around the globe. Facing unemployment, job insecurity, and worsened working conditions, these left-behind individuals have been more susceptible to nationalist and populist ideologies providing consolation and the promise of redress.
Yet, inequality is not necessarily a damaging force for humanity. Societies often tolerate inequality if they view it as a symbol of the possibility of moving ahead in life through hard work. Inequality can signal to individuals that their extra effort or special skills and talents will be rewarded. Some levels of within-country inequality can thus be stimulating and incentivizing for individuals.
However, inequality can also create a sense of injustice, especially among those who feel that the rules of the game are rigged and that life chances are unequal and unfair. Rising inequality may trigger dissatisfaction among the losers of globalization and technological change in such contexts. These feelings of discontent prompt individuals to seek change through the political system, civil disobedience, or through “voting with their feet” and emigrating.
In a new report, which is part of the GI-NI project, we explored whether and how inequality between individuals living within the borders of the same country shapes their emigration intentions. We relied on individual data for 150 countries from the Gallup World Poll and combined it with information on country-level income and wealth inequality from the World Inequality Database. Of course, emigration intentions are tentative, and some migrants may say they want to move but never do. Reassuringly, however, many previous studies find that emigration intentions correlate with subsequent moving behaviour.
Statistical analyses of our data revealed that within-country income inequality levels are negatively correlated with emigration intentions and plans. In other words, individuals living in high-inequality countries were less likely to want to emigrate compared to similar individuals living in countries with less inequality. This finding was remarkably consistent regardless of the data analysis techniques and definitions of inequality we employ. Similar patterns arose when we zoomed in on the relationships between inequality and emigration intentions to the EU and mobility intentions within the EU. We also made sure that we compared individuals with similar socio-demographic characteristics and living in countries with similar levels of economic development, well-being, corruption, and social capital. Therefore, our results imply that inequality reduces potential emigration above and beyond any influence it may have on personal characteristics, social and economic development, well-being, and institutions.
But why does within-country inequality discourage potential emigration? We explored two plausible explanations for our findings. First, we checked whether high inequality signals to individuals that they can get ahead in life and succeed in their own country. In other words, individuals may prefer living in their own country rather than emigrating if they believe that their own country offers enough rewards for those who work hard and want to succeed in life and that inequality is just a symbol of the prospect of future prosperity.
Second, we investigated whether inequality imposes a barrier for individuals who want to move. This barrier may arise, for example, because inequality increases the number of poor people in the country who cannot finance the move. Migration requires having financial resources to pay for things like visa fees, plane or train tickets, or language courses, and only those with sufficient incomes can afford to emigrate. The particular individual or their household who respond to the survey may have sufficient resources to cover the move. Yet, the fact that fewer compatriots migrate means that information- or cost-sharing related to the move becomes more difficult, which may limit that individual’s emigration aspirations and actual migration behaviour.
Our results suggest that the second explanation – about inequality acting as a migration barrier – may be at play. For example, we discovered that skills and income could partly cushion some of the discouraging effects of inequality on potential emigration. This suggests that other things being equal, inequality acts as a bigger barrier for those with less financial and human capital. Another set of results supporting the inequality-as-a-barrier-explanation comes from looking at the role of migrant networks, i.e., having family and friends abroad. Migrant networks often help reduce migration costs, especially among the low-skilled. How so? Networks of compatriots abroad can provide potential emigrants with information before the move, help them find cheap travel options and finding a job, and offer a familiar and welcoming environment after the move. When we looked at the role of migrant networks, we discovered that networks of family and friends abroad partially mitigated the negative consequences of inequality for potential emigration. This finding again points to the fact that inequality acts as a barrier to migration, and that migration networks help lower (but cannot not fully remove) this barrier.
All in all, our results suggest that inequality discourages emigration across many contexts and countries at different levels of development, though there are some differences across geographic regions. Furthermore, the discouraging effect of inequality is especially strong among the low-skilled, those without networks abroad, and financial resources.
What do these results mean for policy and practice? We argue that by discouraging emigration, inequality limits the gains from migration for both origin and destination countries.
For origin countries, less emigration means fewer remittances (i.e., the money that migrants send back home). Both remittances and the diffusion of knowledge, social norms, and technology from abroad that come with migration benefit the economic development of origin countries. In other words, by acting as a migration barrier, high inequality limits the ability of migration to act as an economic and social development mechanism.
Furthermore, less potential emigration may hurt destination countries too. Many host countries rely on migrants to deal with skill shortages and aging populations. Newly-arrived migrants often take low-skilled jobs that natives eschew, and high-skilled migrants bring talents and knowledge. Many migrants want to move abroad only temporarily, and at least some potential emigration is in response to skills shortages in the destination countries. In both OECD and non-OECD destinations, migrants add to the labour force and the relative labour supply and reduce dependency ratios.
Of course, these “missed opportunities” for both sending and receiving countries have to be weighed against the challenges related to potential brain drain for the sending countries and factors, such as the grievances of the native populations against migrants in the host countries.
Understanding the factors underpinning potential emigration is crucial for creating pro-active migration policies. Designing such policies in a way that benefits migrants, their families and compatriots in the origin countries, and the host societies is a multi-faceted task involving policymakers in both origin and destination countries and relevant international organizations, migrant diasporas, and NGOs.