Migrant remittances increase domestic savings as well as improve financial intermediation (Aggrawal et

al. 2006, Toxopeus and Lensink 2007),5 which can improve growth prospects (Giuliano and Ruiz-
Arranz 2005). Evidence from Philippines, Mexico and other countries suggests that remittances increase
the accumulation of assets in farm equipment, promote self-employment and increase small business
investments in migrant-sending areas

factoring the remittance inflows correctly into macroeconomic analysis is also likely to improve the
credit rating and external debt-sustainability of the remittance-receiving country (Abdih et al. 2009,
Avendano et al. 2009, IMF 2010, Ratha et al. 2010). Because they are a large and stable source of
foreign currency, remittances are likely to curtail investor panic and prevent sudden current account
reversals during a crisis (Bugamelli & Paterno 2006, Gupta et al. 2007). Furthermore, future flows
of remittances can be used as collateral by governments and private sector entities in developing
countries to raise financing in international capital market (Ketkar and Ratha 2005, 2009). These
innovative financing mechanisms can be used to raise funds for development projects such as low-
income housing, or water supply

https://www.researchgate.net/publication/228278360_Impact_of_Migration_on_Economic_and_Social
_Development_A_Review_of_Evidence_and_Emerging_Issues

Stark and Fan (2007) and Docquier and Rapoport (2007) cite the losses and gains from brain drain.
Losses from brain drain include: (a) fiscal loss from the departure of the skilled migrant, (b) negative
impact on the productivity, wages and inequality of its complement, unskilled labour, (c) slowdown
of current and future economic growth from the decrease of skilled human capital, and (d) decline in the
home country‘s competitive edge in attracting foreign direct investment (FDI) and fostering R&D
activities.4

Lopez and Schiff (1998), he concludes that migration costs and financing constraints onunskilled workers
lead to complementarities between trade liberalisation and migration.Complementarity occurs because
there are economies of scale and sector specific techno-logical differences. A lowering of tariffs
increases the wage in the host country and easesthe financial constraints for unskilled workers. This
leads to more migration of this groupof workersHe concludes that to counteract this, foreign investment
or aid is desirable

According to the World Bank, in 2013 247 million people migrated while in 2015 this number is estimated
to rise to 250 million. Anti-immigration sentiment is on the rise, and while the impact on destination
countries in North America and Western Europe is constantly debated in the media, the economic impact
also weighs heavily upon sender nations.
One element of immigration that is seen to benefit the sending country is the payment of remittances, the
sending of money back home. These large transfers of money, from the prosperous developed world to
the poorer developing world, are often viewed as key to the latter’s economic development.
IZA World of Labor author Professor Klaus F. Zimmermann writes in his article about the negative impact
of restricting labor mobility that migrants establishing themselves in another country can create a “brain-
drain” in the sending country.
However, he continues to write that “in reality, migration is typically temporary.” Research has shown that
workers migrate, find employment, and then move on or return home which discredits the myth that
immigrants are flooding into western nations to settle permanently. This temporary migration has
a positive effect on the sending nations as the returning workers are more highly-skilled and experienced,
able to boost their home economy due to the skills learned abroad.
Further evidence has proven that migrants rarely take native workers’ jobs, and they boost employment
effects in the long term. In her paper on the impact of immigrant labor on native workers, Amelie F.
Constant says that migrants often “accept jobs that natives don’t want or can’t do [and] they create new
jobs by increasing production, engaging in self-employment, and easing upward job mobility for native
workers.”