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  • Luca Balsamo (Italy)

Migration flows could help reduce inflation, but better social protection systems are needed



Migration and immigration are phenomena that have a long history and are present in all societies at any given time. In the last years the magnitude of migration flows has risen mostly due to the high interdependence of economies and societies, and thanks to the process of globalization which notably made the world “a smaller place”. Aside from political consideration and abuse of the issue as an emotional trigger to the electorate, the phenomenon of migration poses some serious questions on the adoption of social policies and their effectiveness, but it could also present some economic and social advantages too often overlooked. Moreover, the research agenda is mainly focused on North-South migration and flows directed to developed countries, but migratory flows in developing countries also represent a big slice of the pie. In 2019, 90.3 million migrant workers moved from their country of origin in Asia, and the Arab States have the highest share of migrant workers among all workers, namely 40.8%.


Migratory flows have some real economic effects on receiving countries and sending countries as well. In the long run, immigration reduces the equilibrium unemployment rate and makes the labor market more flexible, and wages less sensible to demand fluctuations. In the short run, two macroeconomic effects are evident: on the demand side, there is an increase in expenditures and savings, and on the supply side there is an increase in potential aggregate supply. When the latter effect is predominant, the increase in output and in labor supply can help reduce inflationary pressure. The effects of migration on the inflation rate are extensively noticed, and migration could represent one of the many solutions to recent rising levels of prices. However, many migrant workers are often caged in vulnerable situations of exploitation or even refusal from the receiving society.


Social policies can play a pivotal role in this sense. Nowadays, much of social services and advocacies are provided to migrant workers by institutions of civil society, despite in the Asia-Pacific region much of the movement of people is due to job research. Social policy is essential to integrate the rights of migrants and raise the inclusiveness of the social protection systems, it also lays the foundation for basic levels of socioeconomic well-being of migrant workers. Implementing social policies that guarantee basic rights to migrants, create more inclusive societies, and help manage the flows of migration in a win-win approach are essential.


The UNHCR, the UN agency for refugees, actively supports the so-called employment pathways. These are avenues that allow refugees to enter and stay in a country to work in a legal fashion. In order to be effective, proper travel documents and stay arrangements are needed. Employment pathways support economic growth, innovation, and help in reducing discrimination. Such programs should be extended not only to refugees, but to all those people who move from their countries looking for jobs, and better living conditions. This would entail an increase in legal migration, and consequently a decrease in all those illicit activities related to smuggling. Most importantly, migrants and receiving countries would benefit from such programs at the same time. As stated above, the inflow of workers, and sometimes highly skilled workers, would put less pressure on production, ensure a supply of workers that would absorb supply shocks, and eventually reduce inflationary pressure on the receiving economy. Such programs need to be established not only in developing countries but also in a system of South-South cooperation and mutual assistance in order to reach the global achievement of the SDGs related to decent working conditions and development programs in general.


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