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As always on this boulevard, the faces were young, coming annually in an endless migration from every country, every

continent, to alight here once in the long journey of their lives

Brian Moore

Free flows of people?

Group 12: Kornowski Jan Pallastrelli Chiara Peresson Nicol Salvucci Ilaria Smolina Anastasia


The free flow of capitals, goods, services and people across national borders is a commonly established dogma of the modern Era. It has been a basic principle of many Treaties and Agreements and several theories have been formulated: one of the most important is the Flow idealism, whose vision is based on the principles of economic freedom, voluntary exchange and individual initiative, combined with social and environmental consciousness. The goals are several: Peace (meaning the ongoing expansion of non-violent, mutually consenting relationships among human beings), potentially established thanks to limited constitutional Governments (founded on the rule of law) free and open democratic elections and the free flow of goods, services, people, capital, and information across borders; Prosperitiy, since entrepreneurial activities (natural consequence of the free flows) would help billions of poor people thanks to the elimination of professional licensure and other constraints on occupational freedom that nowadays increase their cost of living and reduce their choice of education, health care and housing, and Happiness. When people are engaged in productive and challenging activity in the context of a meaningful and positive community, they are more likely to be happy; as people move up Maslows hierarchy (see picture on the right), and as individuals develop their personal commitments based on love rather than fear, global happiness could be a reality rather than a dream. So, opening borders would allow billions of individuals to sell their services on an open market more easily. By participation in a global market these people would begin creating significantly more value than they create at present, which would provide immediate benefits to their locales. They could also create a market in human capital development as people around the world discover which capacities lead to a significant increases income, and finally, they would create a bottom-up initiative (rather than the actual top-down process) that supports stable government, a fundamental success factor for global peace. But what has emerged, especially in the last decades, is the fact that while free flows of goods, capitals and services seem to be whished and well accepted all over the word, it appears not be the same with people.

The question follows: are, in fact, individuals completely free to move all over the World? And if not, why?

2.MIGRATION 2.1 Definition and types

Migration is considered one of the defining global issues of the modern times, a very complex phenomenon that has an incredible socio-economical potential but that nowadays, being very badly managed, seems to bring more troubles than actual benefits. In fact, there is not a worldly recognized definition of Migration, at least accordingly to the IOM (International Organization for Migration), the principal intergovernmental organization in this field in the whole World. The UN provides us a definition, referring to migrant as an individual who has resided in a foreign country for more than one year irrespective of the causes, voluntary or involuntary, and the means, regular or irregular, used to migrate, while the common usage would include in the definition certain kinds of shorter-term migrants, such as seasonal farm-workers who travel for short periods to work planting or harvesting farm products. Migration is an ambiguous concept as well, since we can count different types: the first distinction is between internal and external. The first one is domestic, meant as within the National borders, while the second is the international migration; about that, we are going to focus our attention on the SouthNorth parts of the World movement, since its the most significant nowadays and its still increasing exponentially, as we can see from the graph below:

Figure 1: Migration shares Worldwide Source: United Nations (2006), Trends in Total Migrant Stock 1960-2000, Department of Economic & Social Affairs

The second distinction is between permanent and temporary migration; in the first case the individual moves to the destination Country for the rest of his/her life, while in the second just for a defined period of time. The final distinction involves law and

regulations, since its the legal and illegal migration trade-off. We all know the definition of illegal migrant (an alien or non-citizen who has entered a Country without government permission or stayed beyond the termination date of a visa), but we should probably spend few words on refugees. According to the definition, a refugee is any person who owing to a well founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his/her nationality and is unable, or owing to such fear, is unwilling to avail himself/herself of the protection of that country: as a matter of fact, the refugee isnt considered as an illegal migrant.

2.2 History
The history of migration began with the human history. At the beginning very few restrictions limited the phenomenon; in fact, migrant just needed to be able to afford a ticket and survive a very basic health check on the arrival to the destination Country. The very first population that had to face restrictions were Asians, since in the 1850s in the Australian colonies laws began to be passed to keep out Asians (the so called White Australia policy) and in the 1880s, Canada and the United States followed suit, effectively closing the door on Asian migrants. But its especially in the 1920s and 1930s that sharp restrictions were set on voluntary migration across much of the world; the reasons were several, such as xenophobia, economic recession and the labor shortage, all consequences of World War I. The situation changed after the Second World conflict: the emergence of guest worker (Gastarbeiter) in Western Europe started a period of de-regulamentation, thanks to which Countries (especially Germany) thought they could hire mainly young men to work for short periods with no expectation of winning rights as citizens or being allowed to bring in families, but things didnt go that way since, as Max Frisch stated, We wanted workers, we got people. Permanent migration had just re-begun. As workers ties with their home countries loosened, their economic roots in Germany deepened, although with consistent problems of social integration and acceptance. At the same time, many of the former European colonial powers saw arrivals from their former Empires Indians, Pakistanis and West Indians to Britain; Moroccans, Tunisians and Senegalese to France; Surinamese and Indonesians to the Netherlands. Things changed again in the early 70s, with the global economic turndown triggered by the 1973 oil crisis: it was the end of the mass recruitment of guest workers in Europe. In the 1980s and 1990s the drivers of immigration changed: the economic factors became less important, while others such as family reunification and political persecution increased in relevance.

Thanks to the European Union, the expansion of migration became easier (one of the basic principle of the EU was the free mobility of people within the borders), but still not exponential; we had to wait the collapse of Iron Curtain in 1989 and the incorporation of the former Soviet-bloc Countries (like Lithuania, Poland and Hungary) to have a new important wave of migration (east => west). Finally, in the 1990s the meaning of the phenomenon changed: the migrant was not perceived as a low-skilled worker/person anymore; countries start understanding the possibility of leveraging on foreign professionals in order to boost their own economies: thats why US, Australia and Canada introduced point-systems policies in order let people enter in their territories.

2.3 Nowadays situation

Migration is now considered one of the most important and characterizing issue of the early twenty-first century. Three percent of the worlds population is living outside their country of origin, corresponding to about 192 million people. Between 1965 and 1990, migration registered an annual growth rate of about 2.1%, while the current annual growth rate has increased, reaching the 2.9 %, in fact especially migration towards more developed regions has increased sharply in the past 20 years. This graph shows us the amount of international migrants as a percentage of world population. ("more developed regions" comprise all regions of Europe plus Northern America, Australia, New Zealand and Japan).

Figure 2: Trends in total migrant stock Source: U.N. (2008), International migrant stock

Migration includes several and complex dimensions; for example, labor migration, family reunification, decreasing irregular migration, and is becoming more and more an essential component of the economic and social life of every State. The belief is that

a well-managed migration could be actually positive both for the individuals and for the society in general. To be properly managed, policy makers and practitioners need to understand the phenomenon of migration in all its dimensions, to develop a comprehensive and cooperative approach needed in a century where the migration pressure is heavy. Lets see how two of the most important destination Countries, United States of America and European Union, currently deal with this issue, with special attention to immigration phenomenon.

2.4 Current policies

2.4.1 European Union
The free movement of persons is a fundamental right guaranteed to European Union (EU) citizens by the Treaties; in fact, it has been a basic principle of the EU since the sign of Treaty of Rome in 1957. It is implemented through the area of freedom, security and justice without internal borders. The concept of free movement of persons strongly came about with the signing of the Schengen Agreement in 1985 and the subsequent Schengen Convention in 1990, which initiated the abolition of border controls between participating countries. Being part of the EU legal and institutional framework, Schengen cooperation has gradually been extended to include most EU Member States as well as some non-EU countries. In 2004 new directives were set by the European Parliament: these new measures were designed, among other things, to encourage Union citizens to exercise even more effectively their right to move and reside freely within Member States, to cut back administrative formalities to the bare essentials, to provide a better definition of the status of family members, to limit the scope for refusing entry or terminating the right of residence and to introduce a new right of permanent residence. For the non-EU residents a new tool was been introduced in 2009: the Blue Card (Blue European Labor Card). Its an approved EUwide work permit (Council Directive 2009/50/EC) allowing high-skilled non-EU citizens to work and live in any country within the European Union (excluding Denmark, Ireland and the United Kingdom). Thanks to this tool it is possible for non-EU citizens to apply for a two-years valid work permit (renewable thereafter) with a one-track procedure. The requisites are several: the candidate has to possess a college diploma or have completed five years occupational training, enjoy a job contract or a job offer, and the gross income has to be at least 50 percent above the national average, but the card gives a non-underestimated series of rights, such as favourable family unification rules. Once again, the legal basis for this proposal is Article 63(3)(a) and (4) of the Treaty of Rome, which states that the Council shall adapt measures on immigration policy

concerning conditions of entry and residence and standards on procedures for the issue by Member States.

2.4.2 United States of America

The situation is completely different for the United States of America. Immigration has been a major source of population growth and cultural change throughout much of the history of the US. The economic, social, and political aspects of immigration have caused controversy regarding ethnicity, economic benefits, jobs for non-immigrants, settlement patterns, impact on upward social mobility, crime, and voting behavior. As of 2006, the United States accepts more legal immigrants as permanent residents than all other countries in the world combined. The cheap airline travel post-1960 facilitated travel to the United States, but migration remains difficult, expensive, and dangerous for those who cross the United StatesMexico border illegally (even though non-legal immigration wont be considered in this paper). Of course, within the borders of the federal territory, US citizens are free to live, move, reside and work, but for foreigners a formal authorization from the Central Government is needed. Its the case of the Green Card (10 years validity): it serves as proof that its holder, a Lawful Permanent Resident (LPR), has been officially granted immigration benefits, which include permission to reside and take employment in the USA. The application process is very complex; we will just say that, in order to have an employment-based VISA a sponsor is needed: the employer must legally prove that it has a need to hire an alien for a specific position and that there is no minimally qualified U.S. citizen or LPR available to fill that position, hence the reason for hiring the alien. Some of the requirements to prove this situation include: proof of advertising for the specific position, skill requirements particular to the job and verification of the prevailing wage for a position and the employer's ability to pay. Still, benefits are substantial, such as the ability to leave/enter the US at will without the risk of being denied entry by the Immigration Office, the right to apply for government-sponsored financial aid for education, the permission to start own business and create own corporation, the possibility to sponsor spouse and unmarried children under 21 to obtain permanent status and, finally, the eligibility to apply for U.S citizenship later. Thats the main difference with temporary admission: of course its possible for foreigners to work on the US ground for short periods (once again with the permission of the Government of the United States), but theyre not eligible for citizenship through naturalization.

3. The 4 players of migration

But to get back on our initial question: why migration is not free and which are the possible effects of a liberalization of flows of people? In order to give a consistent answer to such a complex question well start analyzing the four players involved in migration: World in general, the Migrants, the Source countries and the respective Arrival countries.

3.1 World
"If international policy makers were really interested in maximizing worldwide efficiency, they would all be busy at liberalizing immigration restrictions This quote from Dani Rodrik perfectly summarizes our point: in fact, liberalization in the labor market can bring huge benefits to the world, starting from an increase in the world GDP. Early estimates came to an astonishing conclusion that eliminating all barriers to migration could as much as double world GDP; however, more recent studies produced more realistic and modest estimates (10% increase). A better allocation of resources and productivity is the reason why we have this kind of increase: in fact we have a reduction of scarcity in labor markets (making up for holes in the country labor demand), a substantial resolution of the demographic deficit, (simply allowing young immigrants to enter in more ageing countries) and finally a significant spread of knowledge, since trained migrants can actually export skills and capacities in every Country they serve.

3.2 Migrants
The second player were going to analyze are migrants, but in order to do so we are going to categorize the effects of labor liberalization in social and economic reasons. As far as social reasons are concerned, most of times there are integration problems driven by very low social acceptance; furthermore, by virtue of their migrant status, they are even systematically underrepresented in the host country political environment. But if we analyze the phenomenon from an economic point of view well see that the benefits are numerous; first of all, wage increases (the pay in arrival Country X is generally much superior than the pay for the same job in source Country Y), then a theoretical improvement of living standards such as health, education and welfare institutions due to the fact that destination Countries often belong to the Developed World (even if this seems not to empirically happen) and finally the gain of

specialization in labor; in fact, most of times migrants are trained by hiring companies, thanks to whom they acquire specific skills and capabilities. So, as Von Weiszacker said "Most of gains accrues to immigrants themselves" and that appears to be true, even thought social implication shouldnt be forgotten.

3.3 Source Countries

A third player affected by labor movements is the source country. Here, an important factor is remittances, transfers of money by a foreign worker to his home country. There are about 440 billion $ of remittances worldwide, and they definitely contribute in a large part to economic growth and GDP of source Countries. A peculiar example is Tajikistan (red dot in the picture below); the money Tajikistan people earn in Russia and send back home equals to 40% of domestic GDP, (3 bil $ of inflows)

Still, there are negatives aspects not to underestimate: first of all, GDP in source Countries tends to go down in any case, since income of those who emigrate is no longer be counted towards the GDP of the source country. Moreover, there is the big brain drain problem. The term indicates the emigration of a large group of individuals with high-level technical skills or knowledge, and the reasons can include both social aspects (such as lack of opportunities, political instability or economic depression in source Countries) and individual reasons (like overseas relatives and personal motivations to continue with the career in a different State).

Source: OECD, Migration Migration and the Phenomenon Source: and the Brain Drain Brain Drain

Brain drain, as we can see from the picture above, is very common amongst developing countries such as the ones in Africa, the Caribbean and East Asia, but Europe is also largely affected: there is, in fact, a large outflow of graduated from Western Europe mostly to the US and also an internal migration of skilled workers from Eastern to Western Europe. To conclude, the sort of static growth in which source Countries are left by brain drain makes us state that we have mainly drawbacks for this player; however, remittances allow relatives of the emigrant to live a much higher standard of living.

3.4 Arrival Countries

Also for the receiving countries there are different benefits and drawbacks. Regarding the benefits, the main economic one is represented by the fact that migration actually leads to an increase in the amount of labour force in the labour market. The first consequence of this increase is the raise of the GDP in the host country, simply because there are additional workers also earning an income. However, form the hostcountry perspective is important to understand if the influx of immigrants harm or help the native population. To evaluate these labour market effects of immigration is crucial to analyse the relative skill composition of foreign and native labour. In general, when the migrants are substitutes to the native population, the native workers will see their wages decrease. Indeed, given a fixed labour demand, an increase in the supply in the labour market of workers with the same market profile, actually leads to a reduction in the earnings. On the other hand, if the migrants are complements to the native population, it can be easily seen an increase in the natives productivity and as a consequences in their wages. Even considering the negative impact of the substitutes migrants, the impact of immigration on average incomes in the native population tends to be somehow positive (J. Von Weiszacker, 2008), since this negative effect is

really small; Borjas (2003) estimated a decrease for the natives wages with the same profile of the migrants of just 0,3% as a consequence of a 1% migrants influx . Further considering other pessimistic assumption (i.e. assuming to ignore all the income gain for the native population that do not compete with migrants), an increase in the workforce of 1%, thanks to migrants, still leads to a positive GDP growth. To notice is that the GDP considered during the analysis is the sum of all the income. The reason why the GDP per capita is not used is that this indicator could be misleading. In the host country, indeed, the migrant is a below-average earner and so the host county GDP per capita will decrease even if the income of native remain unchanged. The second consequence of the increase in the labour force is an increase in efficiency. This will happen only if migrants are complementing the native and increasing the skill pool thanks to a better allocation of the resources. However in general the receiving country can have an increase of the labour market efficiency also thanks to migrants able to compensate the low mobility of natives. They are, actually, very responsive to regional differences in economic opportunities; the fixed cost to move, for them, does not change much depending on the exact country of the EU where they settle. In particular in Europe, where the internal mobility is quite low, external migration will bring benefits to the currency area allowing a better absorption of the asymmetric shocks between different regions. To sum up, there is a net gain from immigration for the host country, but the benefits are not distributed evenly across the native population (N. Diez Guardia and K. Pichelmann, 2006), due to the complements/substitutes argument presented before. Migration has other main benefits for the receiving country. First of all, immigrants allow a demographic development. Foreign workers, in fact, contribute in the payment of natives pensions; this is almost a need in country where the age distribution is more and more shifting to an older population. Europe, with the problem of a rapidly ageing population, should in fact try to address its demographic crisis to attract more migrants; on the other side, however, there is an increase in the expenses for the welfare, the education and other social spending, for the host country. Moreover, the establishment of dynamic sectorial cluster is often easier in an environment open to migration. To give an example, Silicon Valley would not be the same without the important contribution of the immigrants. Last but not least, migration helps the receiving countries in solving the labour shortage problem. In the host- country there are some jobs that are low paid, too difficult or with seasonal fluctuations, not even considered by the native workforce;


migrants can in this case easily fill these positions. To give an example, in the 1960s and 1970s in Germany, migrants from Southern Europe worked as guest-workers in German factories to solve the problem of labour shortage and contributed their part to the economic miracle. On the other hand, migration of high skilled worker that bring in the country scientific, technical and innovative skills, enables the creation of new industry and provides the solution to the talent shortage; a very important issue in many host countries. Moving on the drawbacks of the migration for the receiving countries, the first things to mention is that the biggest slice of gains accrues to migrants, with the capital owners as other winners from migration, as can be seen from the graph below. The line GKD is the initial supply of labour and the line HE is the supply of labour with immigration. While lowering the wages in the country, immigration increases the overall welfare (DEGH) and also natives gain (DKE), but due to the loss of income for factors that substitute for immigrants, this gain rather accrues to factors complementary to immigrants, like capital.

Figure 3: Net effects of migration Source: J. von Weizscker (2008)

On the other hand, the net effect on the native population, as argued before, is ambiguous, but in general positive. This is because: The native winners of immigration might be able to compensate the native losers. However, in practice, this distribution might not take place (J. von Weizscker). This distributional problem could be one of the principal economic reasons why the population is critical about migration. This leads us to the other drawback, meaning the decrease in wages for natives; true only if migrants are substitutes. However, also in this case, the negative impact is really small, as shown before. When evaluating the impact in the natives wage considering the division of the migrants in high skill and low skill workers, the basic assumption is that low-skilled immigration increases income inequality among


the native workers, because the low-skilled natives, with an already below-average wage, experience additional pressure. However, a study by Ottaviano and Peri (2006), (under the assumption that foreign and native workers are not considered perfect substitute even within the same age and skill bracket), found out that only a small part of low-skilled natives experience a negative impact; the majority of native benefits substantially. Speaking in more general terms, studies found out the existence of a modest relation between migration and natives wages or employment in the labor market, whit different and various explanations. Another explanation for the criticism in migration behaves in the host country is the fact that migrants are seen as a burden for the welfare state. Indeed, they actually cause additional expenses regarding the social assistance system, education and health care system, but also more cost for unemployment. It is believed then that all these cost are not matched by additional tax payment. However, there are no empirical evidences for the is more a public opinion and a media concern than a fact. Finally, the native population sees migrants as a threat because they can probably cause a negative effect on the social cohesion as well as in the political and social foundations, resulting in a decrease of the institutions quality. To sum up, is not easy to say if the host country benefits or not from the migration, but is also true that all the aspects should be deeply analyzed in their pros and cons. As we have seen many of the aspects considered as drawbacks, are actually not empirically demonstrated or with outcomes different from the ones forecasted (i.e. the impact on the native wages is positive, even if there is a decrease in the low-skilled native workforce wages).

4. Tensions among the players

All the different interests of all the 4 players lead us to identify some tensions, that need to be addressed in order to achieve the desired level of free flow of people. First of all, there is a tension between the WORLD in general and the single COUNTRIES. On one side, the world GDP increases and the efficiency raises thanks to the migration flow. On the other side, however, some countries could loose from migration with all the drawbacks shown for both receiving and source countries. The second important tension is between RECEIVING and SOURCE countries. On one hand, receiving countries want to attract the best people to work in their


economies (mostly high-skilled workers). On the other hand, in source countries this leads to a brain drain that damages heavily the economies. The next issue caused by migration is the diverse interests of the different RECEIVING countries. Every country wants to attract high-skilled workers, competing for them on the global labor market. In order to do that they have to offer more favorable conditions to migrants. The factors affecting the immigrants choice of the place where to live and work are several, such as labor conditions (not just compensation and insurance policies, but also length of vacation and other factors directly dependent from national Governments), institutional infrastructure (welfare and health-care system, education) and finally language. In general, all other things equal, immigrants find more attractive English-speaking countries than the others, because usually English is the second language they know after their mother-tongue. Therefore its more comfortable for them to use it in the everyday life than any other language, so English-speaking countries have an advantage in attracting the desired immigrants. The last, but not the least tension is between RECEIVING countries and IMMIGRANTS themselves.

This graph shows that the bigger the share of high-skilled workers in the population of immigrants is, the better it is for the natives. But in general, for most countries, this effect becomes positive only when around 60-70% of the immigrants are high-skilled (with the only exception of Luxemburg where, as we can see from the graph, even lowskilled workers can be a useful source for the Country). Therefore, high-skilled workers are usually more preferable for receiving countries than low-skilled ones, but empirical data shows that a lot of immigrants are low-skilled and they still want to migrate in the receiving countries. The character of the migrants skills can possibly explain these differences among countries; the key issue again is whether the migrant substitute or


complement the native workforce. As previously said, if the immigrant and his/her skills complement the natives workforce pool than both sides win. However, when the immigrant substitutes the local workers this effect will be negative. Besides this important economic aspect, the tension here discussed presents also a relevant social side. Issues arise both when considering the needed acceptance of the immigrant by the native population and the integration of the migrants into local society. On one hand, sometimes are the migrant him/herself that doesnt want to integrate, keeping on living in their own communities; on the other hand, even if they try to integrate, they still could feel rejected by the society and not well accepted. All in all, as seen in the previous parts, migration brings benefits for the main players, but at the same time it still causes drawbacks and tensions, reasons that explain in part why the flow of people is so tightly restricted nowadays. After having defined the all picture regarding the people flow situation, its time to provide several recommendations that could help to leverage on the benefits from migration while reducing the drawbacks and balancing the tensions.

5. Recommendations
#1: Receiving Countries should help source Countries to develop.
The term develop stands for the concept that receiving Countries should really help the source Countries to grow in a constructive way, not just offering them financial aid like charity; the natural consequence would be a decrease in the outflow of people from the source countries, especially illegal. There are different ways and tools that could be used to reach this target. A first solution could be to provide source Country with financial support addressed exclusively to education in order to increase the amount of educated people, a necessary condition to support their own country development. Another possible implementation is to link migration policies to some other policy issues making concessions. For example, developed countries could decrease trade barriers, allowing goods produced in the developing country to become more competitive both in their own and in developed Countries markets (even if just in this second case we have a direct impact of lowering trade barriers). In this way, immigrants would not have to leave their Country to benefit from higher income, but could actually produce goods in their own homeland. However, there are some drawbacks that need to be taken into consideration. For example, the policy concessions issue could result in very complicated negotiations among the different countries and the helping to develop policy could not adduce


benefits in the short-middle term, since it has a very long-term effect. While the country of origin is developing, incomes level overseas is still significantly superior, holding the likelihood of emigration steady. Only when the two levels will be similar or equal (but that can happen only in a long period of time) the likelihood of migration will decrease, shrinking the nowadays difference among source and host country.

#2: Focus receiving Countries policies on the attraction of the best workers.
This attraction can be done with the help of the point-based immigration system. Australia, for instance, already uses it, and so will the UK by 2012. All the potential applicants are evaluated and subsequently given points: theyre brought into a range (generally called tier) and finally the Government will choose how many people can get into the Country from each tier (of course from each range higher-level of points candidates are selected). A further example of such a policy implementation is the European Blue card: it is also targeting the best workers, but not among all the types of jobs, just high-skilled ones. Another way to attract desired workforce is through the improvement of institutional infrastructure: receiving countries, for instance, could work on developing the Universities that could offer better education services and, thus, attract immigrants. However, also here there are drawbacks. First of all, the presence of brain drains in source countries. To solve or at list limit this phenomenon, receiving countries could undertake different actions. For example, the Blue-card program has opt out solution to this problem. It offers source countries an option to decide whether to become a participant of this program, and thus taking the risk of brains drain, or not to participate, avoiding sharing their pool of talents with the rest of the world. Another issue is the illegal migration. All the actions implemented to attract the best workers lead to a first step of succeeding to have the needed temporary workers; the downside, however, is that these temporary migrants might not want to leave the host country, becoming illegal permanent residents. In order to solve this problem, countries could offer financial compensation to the temporary worker for leaving the country. For example, employers could request some money from a worker at the beginning of the contract and return them back when the worker leaves the country or, second option, to defer some part of the compensation until he/she returns back home.

#3: Link migration and trade

The last recommendation is linked with the first one and is represented by the link among migration and trade policies. Ideally, countries could build migration agreements on the basis of the existing regional trade ones: good example of this point


could be EU or NAFTA. But the problem here is that neighborhood countries, eligible to build such agreements, sometimes have huge differences in the real income level. So if they open the boundaries, there will be mass migration from poor regions to rich ones. To give an example, expansion of EU-15 to EU-27 caused mass migration from the East to the West of Europe, causing once again brain drain and depopulation of the poor Countries (with all the drawbacks weve seen for the source Countries). The other point here is that all the countries are different in the cultural, political and traditions aspects, harming them to find an agreement on such issues. An example for this point is the European Union again. All the members of EU are different and they are reluctant to delegate decisions about migration policy to the European level, since such decisions are seen as an important element regarding the national sovereignty.

6. Conclusions
As shown in the paper migration is a very complicated phenomenon. The free labor market seems to be an utopia, more than something actually of real implementation; however, there is still space to gain more benefits from migration, taking in mind all the drawbacks and tension that the free flow of people could cause.


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