Hunger, Migration, Poverty, Poverty reduction, Remittances,

de Brauw, Alan

English

Research Papers in Economics

1 
2020 FOCUS BRIEF on the 
World’s Poor and Hungry People 
 
 
INTERNATIONAL MIGRATION 
Can It Improve Living Standards among Poor and Vulnerable Populations? 
 
Alan de Brauw 
 
The migration of labor across international 
boundaries has increased rapidly since 1990. Over 
190 million individuals now live outside their 
country of birth, and the majority of migrants 
leave developing countries for countries with 
higher living standards than their home countries.’ 
Remittance flows have risen quickly over the  
same time frame, and aggregate official 
remittance flows now double official development 
assistance. Participating in growing international 
migration is therefore a potential way for poor  
or vulnerable households to increase their living 
standards. Nevertheless, constraints against 
migration can prevent members of poor or 
vulnerable households from reaping its potential 
benefits. Costs are the most obvious constraint, 
but policies in both the home and destination 
countries can also hinder migration. For example, 
in some countries passports cost more than 10 
percent of per capita gross domestic product, 
making them prohibitively expensive for the poor. 
Similarly, migrant destinations often have policy 
preferences for highly skilled migrants, which can 
preclude migrants from poor or vulnerable 
households, who tend to be low-skilled. 
Developed countries also use visa quotas to avoid 
absorbing too many low-skilled migrants, in part 
because of perceptions that such migrants will 
strain social welfare systems. Costs and 
constraints combine to drive some migration 
underground; for example, it is estimated that 12 
million immigrants in the United States are there 
illegally, and concerns exist elsewhere about 
migrants being forced into bonded labor or 
prostitution. 
This brief explores how policy can help 
facilitate the use of migration to improve the 
living standards of poor or vulnerable households 
in developing countries. Since migration in general 
can be defined in several ways, the discussion is 
limited to international migration of individual 
household members specifically for the purpose of 
employment. The brief also highlights the formal 
costs of migration because they can be mitigated 
most effectively by pro-migration policy. Given the 
focus on international rather than rural–urban 
migration, it is important to note that some of the 
policy prescriptions may not be appropriate for 
fostering rural–urban migration.  
Migration, Its Benefits, and  
Poverty Reduction 
A rich theoretical and empirical literature covers 
the motivations of individuals in developing 
countries to migrate for work. Perhaps the most 
obvious motivation is the difference in wage levels 
between countries sending and receiving 
migrants. For example, when Tongan residents 
win a lottery giving them the right to move to 
New Zealand, their expected wages triple. But 
migrants also move for other reasons. Migration is 
often part of a household income-generation or 
development strategy. From a rural perspective, 
when household income depends on agriculture, 
with its inherent risks, sending a migrant to a 
place where their income will not be affected by 
those risks can increase the household’s income 
security. Migration can also help raise funds for 
investment in better housing or in productive 
activities at home. Nevertheless, migration is also 
conditional on household characteristics given that 
migrants tend to be younger family members. As 
a result, migration is not likely to help the elderly 
rural poor unless they have children that have 
migrated. 
Migration may have both direct and indirect 
effects on poverty. It can directly reduce poverty 
by reducing the number of people that a poor 
household must support. If the potential migrant 
was not working before leaving, this effect is 
particularly beneficial. Migrant remittances are 
also immediately beneficial when they are used to 
supplement consumption. More indirectly, 
migrants can and often do remit cash or goods to 
their families when negative income shocks occur. 
Remittances help stabilize household income and 
prevent the household from plunging further into 
poverty. Migration and migrant remittances can 
also have indirect effects on poverty in the 
migrant’s home community. Migrants leave the 
local labor force, making local labor more scarce 
and pressuring wages upward, while remittances 
add liquidity to local markets, potentially 
stimulating economic activity. Furthermore, 
returning migrants bring new skills and 
experiences with them, sometimes even starting 
microenterprises that create local employment. 
Finally, migration can help households make long-
term investments, such as educating their 
October 2007 2 
children. As a result, there are several potential 
ways that migration can help increase the living 
standards of poor or vulnerable households. 
Lack of Evidence of a Causal Relationship 
between International Migration and  
Poverty Reduction 
Primarily due to severe data limitations, 
researchers have not proven empirically that a 
causal relationship between international 
migration and poverty reduction exists. Most 
current sources of information on migration, such 
as population registers and censuses, do not 
include reliable information on living standards. 
While cross-country data indicate that migration is 
associated with lower poverty rates and smaller 
poverty gaps, little or no research claims that 
migration or migrant remittances directly cause 
reductions in poverty rates or gaps. In most 
countries, data on both emigration and poverty do 
not exist in a large enough sample to convincingly 
demonstrate a causal relationship. Even when 
such data are available, it is challenging to 
confirm that migration was the cause of poverty 
reduction rather than some other, unobserved 
factor. 
One reason that few data sets including 
information on both migration and poverty exist is 
that, on average, relatively few individuals from 
any given country emigrate. A study of migration, 
poverty, and the effects of related policy would 
ideally be based on a multi-topic, nationally 
representative survey, but even in a large 
nationally representative survey, on average 
migration occurs infrequently. For example, 
consider a hypothetical 5,000-household survey 
completed in a country with an emigration rate of 
3 percent of the adult population (the world 
average). If not specifically designed to collect 
information about migration, the sample would 
likely only include 200–300 households with an 
international emigrant—insufficient to support 
useful generalizations from statistical analyses. 
Migrants also use family or community networks 
to find employment, so emigrants tend to come 
from specific communities. If communities with 
strong emigrant networks were not included in the 
sample framework (by chance or otherwise), the 
number of migrant households would likely be 
lower still.  
Due to the scarcity of appropriate data, 
migration studies are typically limited to countries 
with significant levels of migration. For example, a 
nationally representative data set collected in 
2001 in Nicaragua indicates that 5 percent of 
households had a family member who had 
emigrated for work in the previous five years. The 
majority of emigrants went to Costa Rica or 
another Central American country, and about 20 
percent went to the United States. Overall, 
households below the poverty line were less likely 
to have a member emigrate (Figure 1), and, if  
Figure 1—The relationship between the probability 
of migration and per capita expenditures in 
Nicaragua, 2001 
Probability of Migration 
Extreme
Poverty Line >
< Poverty Line
0
.
0
5
.
1
.
1
5
.
2
7 8 9 10 11
Logarithm, per Capita Expenditures, 1998
Overall Migration
Central American Migration
United States Migration
 
Source: Nicaragua National Household Living Standards Survey 
(EMNV), 1998 and 2001. 
they did so, it was almost certainly within Central 
America. Only members of richer households were 
able to emigrate to the United States, and 
members of such households were less likely to 
emigrate within Central America. 
Nicaragua’s experience may be atypical; in 
other countries, migration may be more or less 
accessible to the poor. For example, in Mexico 
poor households in villages with small migrant 
networks have few emigrants, while those in 
villages with stronger networks have more. Other 
research suggests that, in both Ghana and 
Guatemala, remittances to households from family 
members abroad have a positive effect on the 
severity, if not the absolute level, of poverty. 
Migrants may typically leave Ghana and 
Guatemala for nearby countries, making the cost 
of migrating low. Similarly, much migration from 
Nepal is to India, and research shows that poorer 
households are more likely to receive remittances 
as a result. Regardless—with the exception of 
Mexico—these findings only indicate correlations 
and do not suggest that remittances cause a 
decrease in poverty. 
In summary, evidence of the relationship 
between migration and poverty exists for a few 
countries only, and conclusions about this 
relationship are highly country- and context-
specific. Policies related to migration should, 
therefore, also be context-specific, taking into 
account the associated costs and barriers facing 
poor households. 
Costs of and Barriers to Migration 
Two types of specific costs are associated with 
migration: opportunity costs and direct out-of-
pocket costs. A primary opportunity cost affecting 
rural households is the loss of the migrant’s labor 
from household agricultural production. As 3 
international migrants tend to be young and able-
bodied, the agricultural labor input and its 
resulting income can decline when family 
members migrate. In this manner, migration is 
different from local work because individuals with 
local off-farm jobs can easily help during busy 
periods on the farm, whereas migrants cannot. In 
all cases, when migrants leave, other household 
tasks—such as rearing children or looking after 
the elderly or infirm—are shifted to those left 
behind. 
Many of the direct costs associated with 
migration are up-front costs, although they can be 
partially mitigated by family and community 
networks. International migration requires costly 
travel from the source community to the 
destination—sometimes over long distances. Once 
a migrant arrives at a destination, further costs 
are incurred in finding work. Migration is therefore 
inherently risky, and the risk is mitigated if a 
potential migrant can secure a job prior to 
migrating. The process is made much easier when 
extended family or others from the home village 
are located at the migrant’s destination and can 
offer assistance with the job search, a place to 
stay on arrival, and help in adjusting to the 
culture and language of the new country. 
For poor or vulnerable households, the costs 
of migration can act as barriers in two important 
ways. First, even if jobs were available at the 
potential destination, poorer households may be 
unable to finance migration because they have 
few assets and lack access to credit. Second, 
community migration networks might not extend 
as readily to the poor, so the poor may face 
higher costs finding employment at the 
destination. Between travel costs and a lack of 
information about opportunities abroad, migration 
may not even be an option for poor or vulnerable 
households. 
Potential migrants face further barriers to 
migration. First, passports and visas are necessary 
for legal emigration, and while networks can 
facilitate their acquisition, the poor may lack the 
information and connections necessary to do so. 
And, as previously mentioned, the cost of 
obtaining a passport can be prohibitively high. 
Perhaps more importantly, destination countries 
often implement policies that make legal migration 
for employment difficult. For example, most 
developed countries implement migrant visa 
quotas to restrict migrants to those with specific 
skills or education levels. This only leaves low-
skilled migrants with the option of illegal 
migration with its many risks, dangers, and costs, 
such as exorbitant fees paid to intermediaries to 
facilitate migration, the risk of bonded labor 
resulting from debts incurred in migrating, and 
the lack of labor rights and bargaining power, to 
name a few. 
Further institutional arrangements can temper 
the benefits of migration to communities of origin 
by limiting the amount of money available as 
remittances. Although remittance fees have 
declined in recent years, they remain both high 
and regressive, making it extremely expensive to 
send small amounts of money home. For example, 
Western Union charges a flat fee of US$10.99 for 
transfers of US$300 or less from the United 
States, and fees are often much higher in other 
parts of the world. 
Policy Ideas to Foster the Benefits of  
Migration for the Poor 
Increased migration by the poor or vulnerable can 
potentially reduce poverty and create further 
economic benefits in both countries of origin and 
of destination, and pro-migration policies in 
both—as well as bilateral agreements between the 
two—can facilitate the attainment of these 
benefits. However, it is worth noting that many 
pro-migration policy options are currently only 
ideas at this point, and they may not be 
appropriate in all circumstances. 
From the perspective of the country of origin, 
three types of policies can promote emigration by 
the poor:  
1.  Governments can limit the direct costs of 
finding employment overseas. First, they 
can ensure that the cost of obtaining a 
passport represents a low income share. 
To limit migration costs, several Asian 
countries have licensed companies to 
recruit immigrants for low-skilled jobs, 
which can lower the cost of migration 
because recruiters can provide information 
on, or even negotiate, lower 
transportation costs, passports, and work 
visas. However, such companies should 
always be monitored by governments to 
ensure that emigrants are not exploited. 
2.  Governments can potentially encourage 
financial institutions to establish rural 
branches in order to lower the transaction 
costs of receiving remittances. Some 
companies have begun to allow individuals 
to send remittances via short message 
service (SMS) in exchange for cell-phone 
credit. Policies that encourage the 
development of these markets and foster 
creative programs like the exchange of 
cell-phone credits for cash—as is occurring 
in the Philippines—can further the positive 
effects of migration on poor households.  
3.  Countries of origin can enter bilateral 
agreements with countries of destination 
to design incentives for migrants to return, 
both to bring savings and new ideas back 
to source communities and to minimize 
the disruption of families for migration. 
Destination countries can also adjust policies 
to ensure gains from accepting low-skilled 
immigrants. The countries of the Organisation for 4 
Economic Co-operation and Development (OECD) 
are all facing a shift in their demographics that 
will ensure labor shortages in specific markets 
that could be filled by low-skilled immigrants. 
However, portions of OECD populations perceive 
labor migration as threatening. Consequently, 
policies that encourage either seasonal or circular 
migration for low-skilled employment in developed 
countries are likely to be most viable. Hence, 
policy could be designed to allow migrants to 
move between their home and destination 
countries under a fixed work contract. 
Suggestions include the following: 
1.  Bilateral agreements between countries of 
origin and destination could be established 
to enable migrants on fixed-length 
contracts to move between the two 
countries on multiple-entry visas. Many 
agreements exist for seasonal workers 
with European Union countries, but few go 
as far as to allow multiple entry. If 
governments in countries of destination 
were to make it easier for migrants to 
come and go, migrants could return home 
during slower work periods.  
2.  Governments could establish portable 
pensions for migrants to access in their 
country of origin. If migrants benefited in 
their countries of origin from social 
welfare contributions made while in their 
destination countries, they may be more 
likely to return home.  
Emigration has become a more frequent 
phenomenon in developing countries in recent 
years. It offers significant potential for poor and 
vulnerable households, and pro-migration policies 
could help poor and vulnerable individuals to reap 
these benefits. Further studies are needed to 
quantify the potential contribution of migration to 
reducing poverty, but such studies depend on the 
availability of relevant data. If data on migration, 
its impacts, and the influence of various policy 
options were available, progress could be made in 
tapping the pro-poor potential of international 
migration. A final policy prescription, therefore, is 
that governments include migration as a specific 
issue in their data-collection efforts. 
 
For Further Reading: D. McKenzie and H. Rapoport, “Network 
Effects and the Dynamics of Migration and Inequality: Theory and 
Evidence from Mexico,” Journal of Development Economics (Vol. 
84, No. 1, 2007); A. de Haan, “Livelihoods and Poverty: The Role 
of Migration: A Critical Review of the Migration Literature,” Journal 
of Development Studies (Vol. 36, No. 2, 1999); L. Katseli, R. E. B. 
Lucas, and T. Xenogiani, Policies for Migration and Development: 
A European Perspective, OECD Development Centre Policy Brief 
No. 30 (Paris: OECD, 2006). 
 
 
 
Alan de Brauw (a.debrauw@cgiar.org) is a research fellow in the Food Consumption and Nutrition Division of the International Food 
Policy Research Institute. 
 
Suggested citation: Alan de Brauw. 2007. International Migration: Can It Improve Living Standards among Poor and Vulnerable 
Populations? 2020 Focus Brief on the World’s Poor and Hungry People. Washington, DC: IFPRI. 
 
The views expressed in this brief are those of the author(s) and are not necessarily endorsed by or representative of IFPRI, or of the 
cosponsoring or supporting organizations. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
This brief was prepared for a policy consultation process coordinated by IFPRI and focused on the World’s Poor and Hungry People. IFPRI 
gratefully acknowledges the contributions of: Asian Development Bank (ADB), Bill and Melinda Gates Foundation, Canadian International 
Development Agency (CIDA), Deutsche Welthungerhilfe (German Agro Action), European Commission, German Federal Ministry for 
Economic Co-operation and Development, with Deutsche Gesellschaft für Technische Zusammenarbeit (BMZ/GTZ), International 
Development Research Centre (IDRC) Canada, and Irish Aid. 
 
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 
2033 K Street, NW, Washington, DC 20006-1002 USA 
T: +1 202 862 5600  •  F: +1 202 467 4439   
ifpri@cgiar.org  •  www.ifpri.org 
 
 
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Copyright © 2007 International Food Policy Research Institute. All rights reserved. Sections of this material may be reproduced for 
nonprofit use without written permission but with acknowledgment to IFPRI. For further information: ifpri-copyright@cgiar.org. 

International migration: Can it improve living standards among poor and vulnerable populations?

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International migration: Can it improve living standards among poor and vulnerable populations?

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