Latin American and Caribbean countries have the potential to boost their economies by better integrating migrants, according to a new report by the Inter-American Development Bank (IDB).
The report, titled, “Rethinking Urban Migration: Policy Options for Cities in Latin America and the Caribbean” is part of the IDB’s Microeconomic Reports series.
It argues that by successfully integrating well-trained and highly productive migrants into urban economies, local policymakers can set the course for economic growth in their cities.
“By better integrating migrants, cities can tap into a dynamic labour force with a wealth of skills and perspectives that can drive innovation and productivity, leading to increased community competitiveness and prosperity,” said Eric Parrado, IDB’s chief economist and general manager of the Research Department.
The report outlines two key areas for policy making, namely promoting migrants’ contributions to local productivity and alleviating housing constraints. It suggests a range of interventions, from transportation investments and zoning policies to public employment services and childcare assistance.
The new report offers a different perspective on urban migration by focusing on its role in the economic development of cities across the region, shifting the traditional debate that has often centred on potential challenges.
It acknowledges these challenges, such as housing and employment, but emphasises that they should not overshadow the long-term economic benefits of integrating migrants. Policymakers are encouraged to implement strategies that not only address immediate concerns, but also focus on maximising the economic contributions of migrants.
Urban migration presents several opportunities for economic growth. The report finds that migrants tend to be younger and have fewer dependents so that, if adequately employed, they can have more resources available for spending on goods and services, saving, or investing.
According to the report, cities offer larger markets and foster the exchange of ideas, which can make businesses more productive. However, the region has historically experienced slow productivity growth, indicating that its urban centres could do more to change this trend.
As policymakers evaluate options, they should consider short-term versus long-term scenarios, tailor policies to specific contexts, engage the private sector, strengthen local institutions, and prioritise measures that benefit both migrants and residents.
