Rotational Migration

Rotational Migration

Rotational Migration

The issue of migrating across international borders is to find better economic opportunities is entangled with the notion of becoming a permanent resident and then a citizen of the host country.

Is it possible to separate these elements? The idea of rotational migration is that people would migrate for a time, and perhaps just to specific place, and then go back to their original starting point. Lant Pritchett offers some thoughts on this idea in an interview with Shruti Rajagopalan (Discourse, “Ideas of India: Reforming Development Economics, June 9, 2022).

I’ll add that this is actually part 2 of the interview, with part 1 appearing as “Ideas of India: Where Did Development Economics Go Wrong?“( March 17, 2022). Pritchett has strong opinions on many topics, including his dislike of using a poverty line of $1.90 in consumption per day in developing countries to his opposition to randomized control trials. Agree or disagree, it’s worth hearing him out.

Pritchett is discussing the situation in India where it appears that there are large potential gains from moving away from certain poor rural areas and toward more densely populated areas. Some people do this. But many others migrate only for short periods, or during certain seasons, in part because they are concerned about losing what they perceive as the basic security of their rural property ownership. He says:

I think a lot of people in India in the rural areas have something to lose. Hence it freezes them in place because they can’t get a good return out of it and take the lump sum and move to the city. They can’t, as a family unit, as a census-counted unit, move to the city without just the risk of losing their property. Somebody has to stay at home.

I think you get a lot of fractional migration, meaning parts of the household move. My conjecture is the census radically undercounts that. I had heard when I was living in India in 2005 or so, there was a prominent Indian sociologist who was basically saying, “Look, if you go into villages in India, there’s nobody there.” The census might be undercounting migration by a factor of two.

If you had 200 million people in India that had moved, out of a population of 1.3 billion, that seems consistent with the true gains to mobility. They would be moving on a rotational basis because they wouldn’t give up in some sense their claim to the family household, the family plot.

It does mean then this leads to a whole different set of conjectures about India’s response to the changes since, say, the liberalization in 1991. I think the people who bet on staying in the rural areas made a big mistake. A lot of the divergence in inequality within India is the result of people just above, who owned a little bit of land and thought, “Well, I can’t give that up to move to the city.” Then just owning a little bit of land in rural India did not turn out to be a great long-term bet.

From the context of the US economy, this idea of rotational mobility raises two interesting issues: one about mobility within the US, one about immigration to the US.

For mobility within the United States, it used to be a common historical pattern that a number of people from lower-income areas would migrate to higher-income areas. However, as housing prices have skyrocketed in a number of urban areas, the economic incentives for this kind of migration have diminished. Indeed, there’s evidence that if a low-skilled person moves to an expensive area in the US, the higher cost-of-living in the new area can easily more than offset any higher wages the person earns, so the move provides no economic benefit. What if it was there were labor market institutions for people to migrate from low-wage to high-wage areas within the United States for limited periods of time, so they could take advantage of the higher wages without having to face the worst of the high cost of living?

For immigration into the United States, what if there was a practical way to have workers come for a limited time or only to a particular region? Pritchett says:

I never talk about open borders; I talk about greater labor mobility. And the reason I talk about greater labor mobility is I think there’s a big tension facing the world. The rich societies are just aging in really extraordinary terms. So people talk about low population growth, but low population growth isn’t the issue. The issue is the inversion of the demographic pyramid. And the inversion of the demographic pyramid is creating societies that just have way too few workers relative to the number of retirement-aged. And it gets worse and worse inevitably over the next 30 years. Now, the difficulty is that most of the way the regime for mobility of persons around the world has worked since the 1920s is that people who are allowed to work in a country are either citizens or on a path of citizenship in the country.

I’m actually a big advocate of separating those two things and saying the needs of U.S. or Germany or France for labor are not being met. Because if the only way in which a person can come and work in France—to take care of the elderly or perform relatively low-skilled services—is by allowing that person to become a French citizen, the political consensus is no. We’ll prefer not having the service.

I don’t know if you remember that scene from “The Matrix” where Neo encounters the architect, and he says, “Look, we’ll wipe humans out.” And Neo says, “Well, if you wipe humans out, then you won’t have all the service you get from these humans.” And the architect says, “There’s levels that we’re willing to go.” And I feel like increasingly, the rich world is saying, “There are sacrifices we’re willing to make if our only choice for having people work in our country is putting them on a path to citizenship,” which, given the magnitudes of the flows, is inevitably going to change everything about the society and the politics and everything else.

People like Paul Collier write saying, “Look, people just want this sense of national identity. And hence if you force them to choose between preserving national identity and meeting the labor needs that exist, they’ll make hard choices in favor of national identity,” which I think is where we are. My big thing is if we actually had rotational mobility, in which people could come and perform the labor services but not necessarily instantaneously be on the path to citizenship, this could be a big thing that would be a win-win-win. It would be a win for the countries that need the labor. It would be a win for the workers that move. It would be a win for the sending countries.

Open borders implies that these concerns of national identity are going to go away or be weak. I don’t look at any rich country and see those concerns getting weaker. … Doesn’t sound like the world’s getting friendlier to open borders. That said, the needs for this labor are going to get so huge, in my view, that there needs to be some intermediate solution. I think a well-regulated industry that does rotational mobility is a massive, massive opportunity. …

There has been massive out-migration from rural areas of large swaths of America for a very long time. I don’t see Cleveland or Toledo or Mississippi or a lot of these places having super strong NIMBY-ism pressures. If you could reassure people [current US residents] that these people [immigrants] are going to come and work, they’re going to be part of the local economy, but we’re not pre-committing from the minute they arrive that they’re on the path to citizenship. Again, I’m not saying every rotational mobility doesn’t have some path to citizenship, but it’s not immediate and automatic. …

Particularly, by the way, if you could make rotational migration be region-specific, I think that would change the political dynamics a ton. If you could give a person a visa to come work in the United States, but they could only work in designated YIMBY areas, then, of course, the whole national dynamic that everybody worries, that all the migrants want to go to Silicon Valley or all the migrants want to go to New York, could be addressed.

The difficulty is these discussions aren’t even on the table. Nobody’s even talking about all of the various ways in which very clever rotational labor mobility could be designed and used, and the win-win-win that could be produced if we had this legally enforced, industry-engaged mobility. I think if we started to think hard about it, we could develop and design things that would slice through some of these political considerations. We have to be open to the—not all labor mobility is citizenship.

The classic argument against rotational migration is that, whatever its theoretical merits, in practice it becomes a backdoor mechanism for more immigration. One classic example is Germany’s experience several decades back with admitting guest-workers with the explicit understanding that they could be sent home. However, Germany then found that that in practical terms, when people have arrived, become neighbors, fallen in love, had children, and entered the community, sending them home becomes something close to a practical impossibility. As the Swiss novelist Max Frisch reportedly once said: ”We imported workers and got men instead.” 

But the pressures of low birthrates and aging populations in the US and other high-income countries are going to exert pressures of their own. Perhaps rotational migration needs to be revisited.

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Timothy Taylor

Global Economy Expert

Timothy Taylor is an American economist. He is managing editor of the Journal of Economic Perspectives, a quarterly academic journal produced at Macalester College and published by the American Economic Association. Taylor received his Bachelor of Arts degree from Haverford College and a master's degree in economics from Stanford University. At Stanford, he was winner of the award for excellent teaching in a large class (more than 30 students) given by the Associated Students of Stanford University. At Minnesota, he was named a Distinguished Lecturer by the Department of Economics and voted Teacher of the Year by the master's degree students at the Hubert H. Humphrey Institute of Public Affairs. Taylor has been a guest speaker for groups of teachers of high school economics, visiting diplomats from eastern Europe, talk-radio shows, and community groups. From 1989 to 1997, Professor Taylor wrote an economics opinion column for the San Jose Mercury-News. He has published multiple lectures on economics through The Teaching Company. With Rudolph Penner and Isabel Sawhill, he is co-author of Updating America's Social Contract (2000), whose first chapter provided an early radical centrist perspective, "An Agenda for the Radical Middle". Taylor is also the author of The Instant Economist: Everything You Need to Know About How the Economy Works, published by the Penguin Group in 2012. The fourth edition of Taylor's Principles of Economics textbook was published by Textbook Media in 2017.

   

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