We live in a world where uniqueness and authenticity are appreciated. Many companies and organisations are on the lookout for new talent to fit their job requirements. For job openings where they cannot find the right professional locally, governments invite qualified individuals from other countries who are seeking better prospects to migrate. The migrants arrive with skills that are new to the receiving country. This makes it all the more impressive in today’s modern economy. Understanding the beneficial side of migration is necessary if our societies are to usefully debate the same.
Both high-skilled and low-skilled workers who migrate increase the income per person and living standards of their new home countries in the longer run. While high-skilled migrants bring innovation and expertise, low-skilled migrants fill positions for which natives are in short supply while allowing natives to pursue higher-skilled jobs. Furthermore, the gains are widely distributed among the population. In this case, shouldering the short-term costs to help integrate these new workers may be well worth it.
As of 2019, there were 270 million migrants in the world. A migrant is a person who does not live in their country of birth. Since 1990, there have been 120 million more migrants. Over the last 60 years, the share of migrants in the world's population has remained around 3 percent. Furthermore, immigrants in advanced economies now make up 12 percent of the population, while immigrants in emerging markets and developing economies have remained around 2 percent.
How is the economy benefiting from skilled migration?
The economic impact of migration is felt in every facet of the economy. Population growth is also positively impacted by a high level of participation in the workforce and employment, wages and incomes, and the overall quality of our skills base and net productivity. Within the three dimensions of participation, productivity, and population, migration contributes significantly.
Many developed, as well as developing countries, are competing for high-skilled immigrants, who are most likely to perform better in their labour markets and help in boosting the economies. Immigrants are selected according to their skills in response to their economic needs. Immigrants with high levels of education have better prospects in the labour market than immigrants admitted in response to humanitarian needs or based on kinship ties. Their presence stimulates innovation and leads to economic growth in the long term. In the labour market, high-skilled immigrants can raise wages for lower-skilled native workers struggling with declining job prospects.
Even though high-skilled migration benefits more than the average income of the top 10 percent of earners, an increase in the migrant share benefits both the bottom 90 percent and the top 10 percent of earners. Additionally, migrants do not appear to increase inequality among the bottom 90 percent of earners.
Impact channels for skilled migration
Entrepreneurship: Entrepreneurs may benefit from migrant enclaves' externalities, such as better access to information and finance. Immigration-entrepreneurship channels will have the most impact on levels of business creation. There may also be broader impacts. Firstly, new firm entry increases market competition, which can in turn lead incumbent firms to innovate in response. Secondly, net firm entry accounts for a large portion of productivity growth, so entrepreneurship may enhance short-term productivity.
Innovation: Skilled migrants may play a variety of roles in terms of investment, both at the level of individual firms and on a broader scale of trade and foreign direct investment. Migration may, over time, alter levels and patterns of trade and foreign direct investment (FDI) flows between the host and home countries. Migration improves market knowledge of international markets, leading to better matching of buyers and sellers: incomplete information creates trade frictions.
In particular, skilled immigration impacts the consumption and production sides of the receiving economy, migrants can act as entrepreneurs and investors as well as workers, migrants have financial, social, and network capital, as well as human capital, and migrants and natives are imperfect substitutes. Diversity in the workforce may produce externalities that contribute to knowledge creation. The ability to leverage a wider pool of perspectives and skills of diverse teams may enable them to solve problems more effectively or generate new ideas than homogenous teams.
This might seem like a complex and tedious process, but there are organizations like Xiphias Immigration to guide you through everything. Consultants like Xiphias are helping in bridging the gap between skilled people and migration. With a step-to-step procedure, they assist you in every possible way. In the most dynamic sectors of the economy, immigrants play an important role. Skills-based workers have a prominent place in today's knowledge economy. Through their breakthrough innovations, they make exceptional contributions. Therefore, having a permanent skilled visa can be of great benefit to not only the economy but also the workforce and citizens of the receiving country.