What are the most effective strategies for managing the economic impact of international immigration?

1 Migration policies

One of the key factors that determines the economic impact of immigration is the design and implementation of migration policies. Migration policies can affect the quantity, quality, and composition of immigrants, as well as their integration and contribution to the host economy. Some of the most effective migration policies are those that are flexible, transparent, and responsive to the changing needs and preferences of both immigrants and natives. For example, policies that facilitate the recognition of foreign qualifications, the mobility of workers across sectors and regions, and the access to public services and social protection can enhance the productivity and welfare of immigrants and natives alike.

2 Labor market institutions

Another important factor that influences the economic impact of immigration is the structure and functioning of the labor market in the host country. Labor market institutions can affect the wages, employment, and working conditions of both immigrants and natives, as well as their incentives and opportunities to invest in human capital and entrepreneurship. Some of the most effective labor market institutions are those that promote the complementarity, rather than the substitutability, of immigrant and native workers. For example, institutions that support the education and training of workers, the bargaining power of unions, and the enforcement of labor standards can reduce the potential for wage depression, unemployment, and exploitation of immigrants and natives alike.

3 Fiscal policies

A third crucial factor that shapes the economic impact of immigration is the design and implementation of fiscal policies. Fiscal policies can affect the public revenues and expenditures associated with immigration, as well as the distribution of income and wealth among immigrants and natives. Some of the most effective fiscal policies are those that balance the fiscal costs and benefits of immigration, while ensuring the fairness and efficiency of the tax and transfer system. For example, policies that broaden the tax base, increase the progressivity of taxes, and target public spending on public goods and social services can increase the fiscal contribution of immigrants and natives alike.

4 Trade policies

A fourth significant factor that affects the economic impact of immigration is the design and implementation of trade policies. Trade policies can affect the trade flows and patterns between the host country and the countries of origin of immigrants, as well as the competitiveness and innovation of the host economy. Some of the most effective trade policies are those that foster the trade creation, rather than the trade diversion, effects of immigration. For example, policies that reduce trade barriers, promote trade diversification, and enhance trade facilitation can exploit the comparative advantages, market access, and knowledge spillovers of immigrants and natives alike.

5 Cultural policies

A fifth relevant factor that influences the economic impact of immigration is the design and implementation of cultural policies. Cultural policies can affect the social cohesion and diversity of the host society, as well as the attitudes and behaviors of both immigrants and natives. Some of the most effective cultural policies are those that encourage the cultural integration, rather than the cultural assimilation or segregation, of immigrants. For example, policies that support the language acquisition, civic participation, and mutual respect of immigrants and natives alike can foster the social capital, trust, and tolerance of the host society.

6 Global governance

A sixth and final factor that determines the economic impact of immigration is the design and implementation of global governance mechanisms. Global governance mechanisms can affect the coordination and cooperation of countries on migration issues, as well as the protection and empowerment of migrants and refugees. Some of the most effective global governance mechanisms are those that promote the global public good, rather than the national interest, aspects of immigration. For example, mechanisms that facilitate the safe, orderly, and regular migration, the respect for human rights and international law, and the shared responsibility and solidarity of countries can enhance the global benefits and reduce the global risks of immigration.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?