Social protection and risk: the ultimate root cause of migration?

By Jason Gagnon, Development economist / PGD coordinator, OECD Development Centre and Jessica Hagen-Zanker, Senior Research Fellow, Overseas Development Institute

Receiving cash transfers in Freetown, Sierra Leone (photo: Dominic Chavez/World Bank)

According to recent estimates, 258 million people in the world were living outside of their country of birth in 2017, up from a total of 161 million in 1990. That represents an increase of 60%. Under different circumstances, most migrants would never migrate in the first place; they would choose to stay close to their family and friends, and the food, music and culture they cherish. Migration – in these cases – is the consequence of something gone wrong.

So why do they leave? Poverty and lack of opportunities for a better future are the typical culprits. But it’s more complicated than that.

Risk is another factor that pushes many people to migrate. The mere risk of falling (back) into poverty can motivate migration. Indeed, migration theory has long described migration as a coping strategy to deal with risk. Empirical evidence confirms this. A 2016 qualitative study on Bolivia found that (internal) migration was a typical response by rural households in response to risks related to land access, insufficient work opportunities and low agricultural productivity. More evidence (on China) suggests that attitude towards risk can even determine who migrates from within the household.

Migration becomes a way not only to escape risk, but also to generate an informal insurance mechanism, as the World Bank’s 2014 World Development Report highlights. Migrants tend to be financially supported by their families, especially in the early stages of migration, while remittances act as a sort of cash transfer in times of need. While remittances have been remarkably stable over time compared to other types of financial flows, they have tended to increase during crises. A study on remittances sent to Tuvalu, for example, suggests that remittances are indeed more prone to act as an ex-post rather than ex-ante (i.e. disaster preparedness) insurance mechanism.

But shouldn’t more formal state-led mechanisms be in place to promote the kind of social protection that migration — through remittances, for example — supports?

A 2017 OECD Development Centre report, which collected data from Armenia, Costa Rica, Côte d’Ivoire, the Dominican Republic, Georgia and Morocco on social protection and health measures, found that the modalities behind such programmes largely determine the link with migration. In some cases, it showed that social protection could curb migration. But in other cases, social protection can lift binding financial constraints and spur more migration, as was the case in Comoros. Furthermore, under the right circumstances, the reduction of risk in the household can divert remittances into more productive use. In other words, even though households might continue to migrate and remit in the presence of social protection systems, they might do so for other reasons.

The OECD study also showed that it’s effective coverage, not legal entitlements, that drive the link between migration and social protection. A study focused on Albania, Iraq, Nigeria and Pakistan affirms this: institutional reform of social protection systems, enhancement in the accountability and reliability of social services, expansion of effective social protection coverage, and improvement in social protection targeting mechanisms could curb emigration. This extends to return migration. Migrants who consider returning to their home countries have a much greater likelihood to go back if a functional social protection system is in place and the portability of social security benefits is secured.

Despite unprecedented economic growth over the last two decades, the number of people that continue living with inadequate access to social protection and health services remains staggeringly high. More than half the world’s population lacks access to health care or social protection. Coverage is particularly low in Africa and Asia. The current policy agenda reflects the potential of social protection in developing economies. This is most striking in the 2030 Agenda, where no less than four of the 17 goals (SDGs 1, 3, 8 and 10) explicitly consider the role of social protection coverage in tackling poverty and inequality.

Rolling out social protection coverage in developing countries is by no means easy. In many countries, governments struggle to provide adequate social protection, and households must instead depend on non-state actors and informal arrangements. Much of the difficulty in provision is due to high rates of informal employment, making reaching certain segments of the population harder. Social protection can both reduce and increase migration (providing a means to finance migration). More recent empirical papers are increasingly building a strong case for such an argument

But the links remain underexplored. We do not have enough evidence on different types of social protection instruments, for instance, between social insurance, social assistance and labour market interventions. We also need more research on the underlying contexts that may influence the link between social protection and migration, including how social protection (and other public policy) programmes may even interact with each other. While we know that the number of regional migrants is larger than the number of interregional migrants in many parts of the world (e.g. in Africa), we don’t understand the dynamics that risk and social protection play out on such flows. A study on Indonesia suggests that migration after negative income shocks are more prone to producing shorter, temporary movements than longer, permanent ones. Yet, what is not clear is how such a finding translates into regional versus interregional migration.

Such findings are evidently useful for domestic policy makers and their partner donor countries on targeting programmes while respecting policy coherence. What’s needed for next steps?

First, a better understanding of risk, migration and its interrelationship with public policies, including social protection, is key. If aid and domestic policies were to direct their attention to social protection in home countries, it could potentially contribute to reducing migration pressures. But risk also affects other migration outcomes, such as integration, remittances, returning home and diaspora engagement.

Second, both national development and national migration strategies need to each account for social protection mechanisms. This implies a better coordination mechanism across relevant actors, including local level governments, ministries rolling out social protection systems as well those coordinating migration efforts, the private sector and civil society organisations. Spaces are necessary for such dialogue to occur.

Third, the strong links between social protection and migration need to be mainstreamed throughout multilateral and regional governance on migration. In December 2018, 164 countries adopted the Global Compact on Migration (GCM). If implementing the GCM and reaching the SDGs are to succeed, then we need to move away from a bilateral migration system to one of greater shared, mutual responsibility that includes social protection.