Global Recession Led to Stricter Immigration Rules -

Real Time Economics - WSJ

The effects of the recession have seeped into other aspects of policy around the world — including immigration.

Stemming from increased unemployment rates, many countries made changes to migrant policy that largely encouraged both migrant residents to leave and discouraged new immigration from beyond their borders, according to a study by the Federal Reserve Bank of Dallas.

As immigration rates rose between 2000 and 2007, unemployment rates rose in the two subsequent years in countries around the world, say Mike Nicholson and Pia Orrenius, the report’s authors. The migrant population in Spain, for instance, increased from just under 1 million in 2000 to almost 5 million in 2007. Spain’s unemployment rate jumped to 19% from 8.8% between December 2007 and December 2009. Immigration patterns in the U.S., however, remained unchanged from the 1990s as unemployment rose to 10% from 5%.

As a result, Ireland, Spain, the U.S. and the U.K. — among others — adopted policies that would limit immigrants’ access to the labor force. The Troubled Asset Relief Program in the U.S. discouraged banks receiving stimulus funding from hiring foreign workers, and an executive order this year created stricter regulations for foreign farm workers.

Ireland discontinued work permit issuance to immigrants for low-paid positions in 2009 and created stricter rules for work permit renewals. The U.K. increased salary and education standards for non-EU high-skilled workers and passed stricter citizenship requirements.

Many countries created policies that encouraged migrant residents to return to their home countries. Spain’s program, implemented in 2008, made two payments for unemployment benefits to migrants for leaving the country — one in Spain, the second after the person had returned home. Participation in the program prohibits return to Spain for three years. Japan and the Czech Republic created similar programs.

Overall, illegal migration has declined as authorities tighten enforcement on labor migration, though family and humanitarian migration has remained steady.

Effects of the migration resistance could peak after the recession ends, the authors say. Demand for labor and migration are expected to rebound as the economy recovers, but increased demand could clash with restrictions on foreigners in the labor market.

“These could impede countries’ ability to recruit workers in sectors vital to their recovery and long-run economic growth,” the authors say.

But some countries have already started reversing migration policies enacted during the recession. Switzerland, for example, has upped some of this year’s work permit quotas after cutting them in half at the beginning of the year, and Malaysia is permitting some foreign recruitment in manufacturing.

Posted via email from Jim Nichols