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Outline the economic factors that in theory might determine international labour migration. Using empirical studies examine the effect of welfare benefits on such migration in the US and Europe. Illustrate your essay with specific examples.

What factors determine international labour migration are numerous and difficult to rank in order of primacy. The individual's decision to leave his native country and migrate to seek work is, however, often associated with economic considerations. These considerations can be observed within a demand and supply framework. For instance, workers may emigrate from their native labour market because of a lack of job opportunities. On the other hand, particularly for highly skilled workers, a lack of expertise in the receiving country may act as a 'pull' factor to labour migration. The search for higher wages and a higher standard of living for workers and their families is also clearly an important economic incentive for migration. In neo-classical terms then, international labour migration will tend to be from areas of low equilibrium wages to areas of high equilibrium wages. As Hicks surmises '…differences in net economic advantages chiefly in wages are the main causes of migration.' The historiography concerning determining factors in migration has expanded greatly since the neo-classical epoch to include adaptations of the Hicks ideal and human capital theory (where migration is seen as an investment). Despite economic factors clearly being important in the decision to migrate, the literature on international migration makes clear that other factors such as family ties, social networks, colonial history, political structures and trade linkages all influence a worker's decision to emigrate. Whilst consideration of these factors is clearly important in the context of international labour migration, they lie beyond the scope of this essay. It has been postulated by some economists that another 'pull' factor in international labour migration is a generous system of welfare benefits in the receiving country. Whilst some authors consider this 'welfare magnet' an important determining factor, it is my assertion that proving its existence is difficult and it seems likely its contribution to migrant 'pull' is at best minimal.

Clearly, although many other factors are taken into consideration when making the decision to migrate, economic factors are of relevance to the émigré worker. Many migrant workers leave their native land partly because of 'pull' factors such as better wages, improved working conditions and the contribution such improvements will make to the general standard of living of both worker and his family. In the neo-classical framework then, workers will tend to move from a country of low wages to one of higher wages. Again, on the supply side, workers may be compelled to leave their native labour market because of a lack of opportunities for work in their particular area of expertise. For instance, highly specialised workers may leave a country where their speciality is not so much in demand and move to one where there is a dearth of that particular expertise. This 'brain drain' phenomenon was conceptualized in the 1960's and is particularly apparent in the migration of computer workers from the sub-continent to the UK. On the unskilled side, the migration of workers from the Caribbean to the UK in the 1950's was partly due to the promise of a better life in Britain and the government's desire to fill the lowliest jobs for which indigenous labour was lacking.

In the European case, again empirical studies have given mixed results as to the existence of a 'welfare magnet'. Firstly, a problem arises because of the paucity of research into the effects of relative welfare levels on international migration in Europe. A large proportion of research has been concentrated on Germany and Scandinavia and authors of such research concede that isolating welfare benefits as a pull factor is difficult given the multiplicity of factors determining migration patterns. Research by Fertig and Schmidt (2001) suggest that migrants are not only proportionately less dependent on benefits than the indigenous people, but also that migrants who are on benefits tend to assimilate into non-benefits existence fairly quickly. In contrast, in an empirical study into welfare and migration in Sweden, Hansen and Lofstrom (2001) found that migrants, constituting 11% of the population, consumed 50% of social assistance in 1996. Given the relatively generous benefits system in Sweden this does give some indication that a 'welfare trap' may be operating. Breuker et al use the European Community Household Panel (ECHP) survey to study the effect of welfare benefits Europe wide. They find that countries with generous welfare systems, such as the UK may act as 'welfare magnets' to migrants. However, it seems that to single out the 'welfare magnet' as an important 'pull' of migration is almost impossible given the paucity of comparative data and the multiplicity of interrelating factors that determine the movement of labour. However, what does seem clear is that it cannot be considered a major factor in whether people migrate or where they migrate to.

In conclusion, it is clear that certain economic factors are likely to determine a migrant's decision to leave his country and seek work elsewhere. These factors may include poverty in the native's country, differentials in wages or incomes, job opportunities in receiving countries or job availability in specific sectors or industries. Whilst conceding that these economic factors do play a part in determining international migration it has attempted to be shown here that purely economic factors are far from the single determining aspect of international migration. Political structures, social and ethnic networks as well as historical linkages of colonialism and trade are also germane to the direction and level of labour migration. With regard to the impact of welfare benefits on international migration in the US and Europe it seems the empirical studies are often contradictory in their conclusions. This is largely due to the difficulty in empirically testing such a broad based topic as international migration, particularly given the numerous factors that determine a worker's decision to migrate. At best it seems the 'welfare magnet' acts as only a weak 'pull' factor to migration. In short, there is no single causal factor in determining international migration, or as Borjas surmised 'there is no universal law that must characterize all immigration flow.'

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