The Economics of National and Ethnic Diversity

Refugees and Migration
Immigration: Boon or Bane to the US
The Costs of Immigration
and Immigrants (pp 34-39,52-57,69-71)


In terms of economic theory the same argument for the free movement of trade should apply also to labor: the free movement of labor (free market) will allocate labor more efficiently. At the aggregate level moving labor from poor countries to rich should make better use of global resources, and add to global income. At the micro-level, ethnic minorities represent a vast up-tapped resource for organizations both as workers and as consumers of goods and services. Migration, however, is a subject where policy is determined more by prejudice than reason

Migrants differ substantially by the category into which they fall. The basic categories of migrants are
Immigrants - legal and illegal
Non-Immigrants - tourists, guest workers, business visitors, foreign students/exchange visitors

There is also substantial deviation within each category:
1. Settlers- people who enter a country to live there permanently (U.S, Canada and Australia are the three major destinations of settlers). When family and friends send for others to join them, chain migration occurs.
2. Circular migration - people admitted with the understanding they will work for a limited period and then return to their country of origin. The majority are unskilled or semi-skilled. This category also includes seasonal and temporary workers. Temporary or contract workers can be found in the tourist industries (hotels and restaurants). In 1990, for example, there were 6 million contract workers in the Middle East (from other parts of Arabia and Asia). The majority are of circular migrants, however, are employed in agriculture and come from East to West Europe and from Latin America/Caribbean to the U. S. and Canada to harvest crops. There are 11,000 seasonal workers in France, 150,000 in Germany, and 70,000 in Mexico. Gypsies have historically been seasonal workers, traveling from region to region. More recently, the US Hotel Industry is recruiting seasonal workers form Jamaica, W.I.
3. Professional/Career migration - includes those with higher skills that transfer easily from country to country. This category includes managers and technicians from multi-national companies, trainees, academics and students circulating through systems of higher education.
4. Illegal immigrants - those who have:

  • entered the country illegally;
  • overstayed their visas (about 40% of all illegal immigrants in the U.S.) or
  • those entering legally but working without a permit (e.g. Czech's and Poles working in Germany).
The largest numbers are found in the US (3 million), Europe (3 million) and millions more in Africa and South America. Many work in jobs that are "dangerous, dirty and difficult".
5. Refugees/ forced migration- People who have left their country to escape danger. The majority of refugees settle in the developing world

What Exactly Is An Immigrant?

Technically an immigrant is a person who holds foreign citizenship/nationality.
Citizenship/nationality are determined by two methods
Jus Sanguinis - (law of blood). Citizenship is based either on the father's naitonality (or mother's if born out of wedlock). Most of Western and Northern Europe have Jus Sanguinis
Jus Soli - (las of soil). Citizenship is based on whether the person was born in the country. The U.S., Canada, and Australia use Jus Soli.

Problems with nationality: /citizenship

Colonial ties - people who are from former colonial are sometimes entitled to citizenship
Dual/double citizenship - many hold more than one citizenship
Hybrid systems - many countries have a combination of Jus soli and Jus Sanuinis

Is citizenship important?

Yes, for many people it is. In a business context, citizenship allows people to work without fear of being deported. To many foreign workers, the ability to get citizenship and the company's commitment to helping the employee obtain citizenship, are important criteria for job acceptance. Citizenship also allows people to vote and hold public office.


Much of the literature mostly focuses on refugees yet they make up only 20% --- 22.3 million or 1 in every 264 people. Most of the refugees are in Africa.
Criteria for determining if someone is a refugee:
1) fear of harm is well-founded
2) the harm, or persecution, would be inflicted upon the person on account of one of the five grounds; race, religion, nationality, membership of political opinion or social group.
Does NOT typically include:
War criminals
Draft evaders


Positive Negative
1. Remittances from workers working abroad 1. Remittances leave the country of employment
are returned to their homeland
2. Human capital is gained in receiving countries 2.Human capital is lost in providing country
Skills and technology are transferred (brain drain)
3. Cultural enrichment 3. Social, political and economic tensions

Remittances can be substantial. Emigrants transfer more than $65 billion back -- generating some 50% of 'export' earnings for some countries
Pakistan receive 9% of its GNP from remittances
Asian migrants in Middle East sent $7 billion to their respective homelands
Portugal earned 70% as much money as exports
Egypt 93 percent as much money as exports
Turkey 80 percent as much money as exports
Those who plan to return home, send home more remittances. It is estimated that each migrant helps 5 or 6 people at home, between 200-240 million people around the world depend on the support of friends or family members working abroad.