Migration from the Global South: A Critical Discussion on Theory – New Economic Labour Migration(NELM)

Migration from the Global South: A Critical Discussion on Theory – New Economic Labour Migration(NELM)

There has been a notable shift in perspective regarding the interplay between migration and development since the late 1980s, characterized by a growing recognition of the diverse and non-linear nature of this phenomenon. Additionally, a paradigm shift has occurred in social theory, marked by an increased emphasis on interdisciplinary approaches that integrate analyses of individual agency and social structure. This broader paradigm shift in social theory has exerted a significant influence on the academic discourse surrounding migration and development. In the 1980s and 1990s, a pivotal contribution to this debate emerged from the New Economics of Labour Migration (NELM).

This new economic labour migration puts emphasis on a risk sharing behaviour among families or households. It believes that the household is more able than the individual when it comes to diversifying resources, in order to reduce the risks associated with their income. It is assumed that individuals, households, and families will take steps not only to maximise their income but also to lessen and disperse the risks that they are exposed to in their daily lives. Since migrant remittances serve as a source of better?income assurance?for families of origin, therefore international migration is?perceived as a response to financial uncertainty within a household. Migrating thus is viewed not only?as a way for families to reduce their exposure to risk but also as a means to escape from restrictive market constraints. Therefore, households are placed in the new economics labour migration as imperfect credit (capital) and risk (insurance) markets in the most developing countries. Earning through international remittances, migration can be a strategy for households to overcome such market constraints because it enables households to invest in productive activities and improves their welfare. While remittances are ignored in neo-classical migration theory, within NELM they are perceived as one of the most essential motives for migration.

The New Economics of Labour Migration (NELM) approach criticized the methodology employed in the majority of previous empirical studies that examined the impact of migration. These studies typically focused on non-comparative analyses of remittance utilization, neglecting the concept of income fungibility and failing to consider the indirect effects of migration on communities as a whole. In simpler terms, NELM argued that previous research on the effects of migration was limited because it did not compare different scenarios or contexts, and it primarily focused on how remittances were used by individuals or households. This approach overlooked the fact that income can be interchangeable or used in various ways, and it ignored the broader effects of migration on entire communities, beyond just the recipients of remittances. NELM emphasized the need for a more comprehensive and nuanced understanding of the impact of migration, taking into account these overlooked factors.

In Asia, migration patterns are increasingly characterised by temporary and more episodic flows. In light of the NELM, numerous scholars began to interpret migration and remittance provision as household strategy employed to offset capital and production constraints. However, in the context of South-South migration, where shorter durations or less secure employment are common in destination areas, the migration process leading to indebtedness may erode the capital and production capabilities of the households left behind. The accumulation of excessive debt by households, beyond their repayment capacity, can result in increased vulnerability instead of easing constraints on their production and investment endeavours.

The migration process that induces debt can impede the transfer of household capital and production resources.?Households are put in a more precarious position when they amass an excessive amount of debt that exceeds their capacity for repayment. While a growing body of evidence emphasises migration's potential for development, it also highlights the complexity, heterogeneity, and social differentiation of migration's effects on development. This provides a warning against recent optimistic views on migration and development. It highlights the fact that individual migrants have limited power to overcome structural obstacles. Therefore, it emphasizes the crucial role of the broader development context in determining how much the potential benefits of migration can actually be realized. In the present world, migration is becoming more complex and diverse and different regional outflows provide different dimension and shape of migration. Consequently, while thinking about the connection between migration and development, there should be a denial of a generalist view, rather conceptual premises should emphasise more on?the regional context and dimension – factors that largely shape migration processes and migrants.

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