The Impact of Temporary Migration on Source Countries

Abstract

We quantify the home country effects of different types of temporary and permanent migration patterns using a global integrated model for three developing countries. Our results suggest that migration (whether permanent or temporary) is beneficial for income as well as for poverty reduction in the home countries as it raises remittances, labor productivity, trade, and foreign direct investment and it provides incentives for human capital accumulation. These channels offset the negative impact of “brain drain.” In the simulations, temporary migration programs yield better outcomes than permanent migration due to the productivity gains induced in the home countries by returning migrants.