Zuzana Cepla | April 28, 2021
An economy is a complex system, under which each worker’s skills and specialization has its own value that complements the capabilities of others—a process that ultimately leads to increased overall economic growth. As Hausmann found, complexity is in fact at the center of countries’ economic growth and development. The argument may be easier to understand using the following metaphor. A simple economy makes bread, which only requires a few ingredients, including a great deal of flour, but no eggs. A more sophisticated economy produces both bread and cake, the latter of which requires flour and eggs. And an even more sophisticated economy might produce a variety of breads, pastries, and cakes, which requires the specialized skills of a chef, who can create new recipes using existing and new ingredients. Note that each of the economies still need flour to produce their goods. In terms of migration, high-income countries strive to attract more entrepreneurs, information technology (IT), and other experts with advanced degrees to continue expanding the range and depth of sophistication of their economies. However, the “recipes” for modern economies still require “flour”—in other words, there is still a need for caregivers for the young and the old—as well as cleaners, roofers, painters, and retail workers; and many employers in high-income countries struggle to fill these and other jobs due to increasing labor scarcities.
Zuzana Cepla | October 26, 2020
Many people around the world are trapped in poverty as a result of their country of birth. More than half of variability in income globally is explained by their country of birth; meaning that individual effort or luck can explain only a small portion of the global distribution in income.[i] This implies that, mostly, “there are not poor people but only people in poor places.”[ii] Labor mobility allows people to leave their homes to work abroad, and thus secure better life for themselves as well their loved ones. However, when addressing labor mobility, politicians, researchers as well as general public often focus primarily on the impacts on sending and receiving countries. While it is certainly important to consider and assess impacts of labor mobility on the involved nations, their economies and citizens, it is necessary to also analyze the impact on those who are affected by labor mobility the most directly – foreign workers and their families themselves. Despite a number of risks and challenges, labor mobility has proved to be, at the margin, the most effective tool to reduce poverty among people in low-income countries.
Why Labor Mobility? Growing Youth Populations in Low-Income Countries Require Creative Jobs Solutions
Rebekah Smith | October 9, 2020
While high-income countries face rapidly shrinking working-age populations, these same populations in low-income countries are sharply increasing. Traditional paths to job creation through manufacturing are closed off to these countries because of labor-saving technologies and the established position of Asian manufacturing exporters. Labor mobility offers transformative benefits for low-income countries; beyond offering quality employment opportunities for their workers, associated remittances and skill accumulation can effect powerful positive change on their development outcomes. However, several factors limit sending countries’ ability to unlock the potential of labor mobility for their people. Ironically, labor mobility has often been viewed as a failure of development, leading to a negative narrative making it difficult to promote labor mobility. Beyond this, there are a number of challenges relating to labor mismatch, legal frameworks, and implementation that limit their ability to expand employment opportunities through mobility. Solving these challenges will require a multi-faceted effort with receiving country governments, employers, and a quality mobility industry.
Why Labor Mobility? Labor Mobility Can Assist Employing Sectors with Addressing Growing Labor Scarcity
Zuzana Cepla | August 20, 2020
High-income countries’ employing sectors face unprecedented scarcity of native-born workers, especially with low and medium skills. As the nations’ populations get older as a consequence of declining fertility rates, their overall workforce shrinks, preventing employers across industries to find enough workers to fill the gaps. Although many call this trend “labor shortage,” this note refers to it as “labor scarcity” since the employing sectors in high-income countries are unable to address the issue simply by increasing wages as discussed below. While the COVID-19 pandemic has caused some temporary swings with closures of businesses and thousands of furloughed workers worldwide, this underlining long-term trend is unlikely to change. Without sufficient number of mobile workers with necessary skills, employing sectors will continue to struggle to produce and deliver often vital goods and services, or even stay open for business. This labor scarcity has been negatively affecting communities and weigh on the high-income countries’ economies. Labor mobility can serve as an effective policy tool to help employing sectors in those countries to at least partially close their deepening labor gaps.
Rebekah Smith | July 28, 2020
COVID-19 has not changed long-term demographic trends, and there is good reason to want a more globally mobile workforce even in the immediate future following COVID-19. However, factors constraining labor mobility are heightened in the COVID-19 era. In the near term, this creates two possible worlds: one in which the constraints win out, and one in which we build off innovations implemented during COVID-19 to move towards a well-managed mobile workforce, setting us up well for the much larger demographic need in coming decades. We propose that the second world can be achieved through a broad coalition to validate the risky innovations undertaken during COVID-19 and to document the positive impacts of the actions they undertook. We further propose that a good ‘mobility industry’ is core to resuming labor mobility, and will require collective action from a broad coalition to establish and develop a quality industry.
Zuzana Cepla | July 2, 2020
The world is about to face unprecedented challenges. With increasing life expectancy and declining fertility rates in many high-income countries, older populations will grow while labor forces will shrink. The resulting demographic transition, the inversion of the demographic pyramid with more old than young, will be gradual but increasingly dramatic. Inevitably, these changes will adversely impact lives of families and individuals in those nations, as their governments will not be able to fund social security and health care programs that are heavily dependent on contributions from the working populations. Labor mobility can serve as an effective policy tool to at least partially address the looming demographic crisis in the high-income countries.