Home / Politics / Policy /  Migrants contributed 9.4% of global GDP: McKinsey report

New Delhi: Cross-border movement of people boosts global productivity and countries which prioritize integration of migrants stand to gain, said a report released by the McKinsey Global Institute on Thursday.

The economic and social impact of migration is a matter of heated political debate in developed nations.

According to the report—‘People on the move: Global Migration’s Impact and Opportunity’—more than 90% of the world’s 247 million cross-border migrants move voluntarily for economic reasons, contributing 40% to 80% of labour force growth in the top destination countries. The remaining 10% are refugees or asylum seekers.

Migrants contributed roughly $6.7 trillion or 9.4% of global GDP in 2015, about $3 trillion more than they would have added in their own countries. Most of these gains are concentrated in regions like North America and Western Europe, which together accounted for $4.8 trillion, the report said.

India tops as the country of origin of migrants, contributing 16 million of the 247 million migrants globally, while the US is the top destination with a migrant population of 47 million, data from the report shows.

From India, 8.2 million migrants have moved to the Gulf countries and Indians received the largest inflow of global remittances—$70 billion of the $580 billion generated in 2014, the report said.

While costs of managing entry are usually less than 0.2% of GDP across major destinations, the report said, migration does not harm native employment and wages, though there can be short-term negative effects. However, a study of the 18 major destination countries in the report revealed that not a single one of these countries has holistically addressed all the three aspects—economic, social and civic—of integrating migrants.

Immigrants, even though they earn higher wages by moving, earn 20-30% less than comparable native workers, the report said. It added that narrowing the wage gap to 5-10% would translate into higher global output.

“Making a clear improvement in the way immigrants integrate into destination countries—not only in terms of employment but also in areas such as education, housing, health, and community engagement—could add $800 billion to $1 trillion to the global economy annually," the report said.

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