millions

coVId And mIgRAtIon In soutH AsIA

Intraregional migration may be eco- Figure 3.4. South Asian nationals living nomically beneficial because the abroad within and outside the subregion, costs of migration decrease with spa- 1990-2019 (millions) tial, linguistic, and cultural proximity. Gravity models of bilateral migration show that, conditional on wage differentials between destination and origin country (among other factors), bilateral migration levels are negatively correlated with distance between them 10.95 11.13 12.52 16.13 (World Bank 2018). A 1 percent increase in distance between origin and des- 13.81 11.03 11.09 9.40 9.59 8.92 8.83 tination countries is associated with a 0.29 percent smaller migrant stock from the origin country in the destinaSouth Asian nationals abroad residing outside of the subregion tion country. Contiguity also matters; South Asian nationals abroad residing within the subregion conditional on wage differentials, distance, and other factors, migration is 56 percent higher between neighboring countries. Countries with a shared language and colonial history also have larger bilateral migration. The presence of a larger origin-country migrant network in the destination country is also associated with more migration. These patterns suggest that the pecuniary and non-pecuniary costs of intraregional migration may be lower because it involves shorter distances and contiguous borders and a shared language. Studies also suggest that shorter distances between origin and the destination countries are associated with lower costs of sending remittances (Frankel 2011; Lueth and Ruiz-Arranz 2008; McCracken, Ramlogan-Dobson, and Stack 2017).

23.28 28.98

45.00 40.00 35.00 30.00 25.00 32.39 20.00 15.00 10.00 5.00 0.00 1990 1995 2000 2005 2010 2015 2019 Source: Staff calculations based on UNDESA 2019. Note: The data represent the stock of international migrants as a share of the population for South Asia.

More intraregional migration could boost intraregional investment and economic growth in South Asia. Migrant networks stimulate overseas investment by reducing information friction and transaction costs (Burchardi, Chaney, and Hassan 2018; Javorcik et al. 2011). Especially between countries with low bilateral trust, migrant networks might be important drivers of intraregional investment. In South Asia, regional migration has helped develop intraregional investment and value chains. South Asian firms with chief executive officers or founders with migration networks in destination countries in the region are found to make more foreign direct investments (Kathuria, Yatawara, and Zhu 2021). Given the importance of the service sector for the economies of several countries in South Asia, the region could benefit from greater intraregional

coPIng wItH sHocks: mIgRAtIon And tHe RoAd to ResIlIence

flows of highly skilled professionals, such as information technology professionals, which could complement domestic skills.

Migration policies shape the level and nature of intraregional migration. Changes in migration policies can have major consequences for the type of regional migration flows countries receive. For example, the end of the Bracero Program in 1965, which provided a legal framework for the temporary migration of Mexican agricultural workers to the United States, changed the nature of the migrant flows without affecting their size. Undocumented migrants replaced legal temporary migrants as labor market demand for Mexican workers remained in place (Massey and Pren 2012).

There is a role for research and regional cooperation to measure intraregional migration more accurately and devise policies to better harness the benefits of this type of migration. The determinants, costs, and even economic benefits of intraregional migration in South Asia are not well understood but could be significant. This suggests a role for research to inform policy, as well as regional cooperation and dialogue to identify ways to channel the untapped gains from intraregional migration in the region. For example, the region could benefit from harmonizing data collection by adopting common international standards and definitions of migration indicators (ILO 2018).

Brazil, 4.7 percent in China, and 9.9 percent in the United States (Kone et al. 2018).2 Trends in long-distance internal migration have also been flat. In 1991, 3 percent of India’s population had ever moved across states, and this share had increased to just 4 percent by 2011 (Figure 3.6.A). The percentage of India’s population that had ever moved to a different district in the same state was 7 percent in 1991, increasing to only 10 percent by 2011. Similarly, in Pakistan, approximately 2 percent of the population had moved to a different province, and 6 percent had moved to a different district within the same province in 2001-02 and there was no change in these numbers by 2010-11 (Figure 3.6.B).

Temporary and seasonal internal migration is also significant in parts of South Asia, especially for rural households, for whom permanent migration is less prevalent (Banerjee and Duflo 2007; Munshi and Rosenzweig 2016; Topalova 2010). In the Rangpur region of

2 Figures are based on national population censuses for 2000-01 when India had 35 states, Brazil 27 states, China 37 provinces, and the United States 51 states. Internal migrants are defined as individuals whose place of enumeration in the census is different from their last usual place of residence. Possible explanations for differences between countries include languages, policies, size of states or provinces, and ease of moving abroad.