Go West, Young Man!

Moses and his weary Chosen tromping through the desert toward Canaan, Puritans in moldy ships sailing to the New American Israel, Conestoga-wagoning Homesteaders heading to Oklahoma, Dust Bowl "Oakies" headed further to California--now supplanted alongside the Napa vines by Mexicans and Ecuadorians. To pack up your life onto the back of your donkey or Datsun in search of greener pastures is a story as old as humanity itself. It is how restless and hungry little Homo Sapiens wandered out of Kenya and Ethiopia to colonize every corner of the earth in the first place.


"Darling, the banana harvest has not been kind this year. Time to pack up and head north..."

But yet, economists seem to ignore the phenomenon of migration when computing Gross Domestic Product. Yes, unconstrained labor, like capital, will tend to flow across national boundaries in Ricardian economics. What wages do return to the motherland are considered in the macroeconomic financial account as transfers. However, why does the Cuban cease to be a Cuban once he leaves Cuba? When a large portion of his wages return to Cuba in the form of remittances to family members, when he retains a dominant Cuban identity and culture in exile and when he is connected to home via overlapping layers of telecommunication?

Under the conventional macroeconomic model, a country becomes less developed when its citizens find a better life elsewhere. Why not instead think of migration as development? Why not measure the Gross Domestic Product per natural? Count the children of a nation no matter where they tread. The Internal Revenue Service of the United States does implicitly, at least, by charging expatriate American citizens income tax.

Measuring GDP and GNI per natural instead of per resident is the idea proposed by Michael Clemens and Lant Pritchett at the Center for Global Development in their recently-published paper Income Per Natural: Measuring Development as if People Mattered More Than Places. According to the two economists, "almost 43 million people live in a group of countries whose income per natural collectively is 50 percent higher than GDP per resident."

Over a decade between the mid-1980s and mid-1990s, China pulled 130 million people out of poverty, the largest single leap in human welfare in history. This was achieved almost entirely by allowing migration from the impoverished western interior to the bustling coastline cities. The Chinese diaspora continues to form the backbone of the South East Asian economies (and have for centuries), inextricably linked in a tight, informal network with the Middle Kingdom. Singapore, for example, is majority Chinese, with a Sino-Singaporean population of 3.5 million.



There are currently four times as many Lebanese people outside Lebanon than inside (there are two-and-a-half times as many Lebanese in Brazil, in fact, than in Beirut). Young Arab men from all over the Middle East flock to Saudi Arabia to earn the nest egg required for an apartment, satellite television and marriage. Only 20 percent of the population of the "United Arab Emirate" of Dubai, meanwhile, is Arab (the most common colloquial languages are English, Hindi and Urdu).

It goes without saying that migrant labor in the United States is an essential source of welfare for Hispanics across the Americas. In 2006, Latin America hosted a flow of remittances totaling $63 billion (exceeding the combined total of all Foreign Direct Investment and Overseas Development Assistance to the region). For the communities who depend upon these wire transfers, the industry of their countrymen is certainly a palpable factor in their gross national welfare.

Clemins and Pritchett conclude their paper with an intriguing meditation:

The bottom line: migration is one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.