June , 2022
00:36 am

Dr.Namrata Anand Ritik Aggarwal


Vasudhaiva Kutumbakam, the Sanskrit phrase meaning the world is one family, is one of the original ancient philosophies of India. However, India's current situation in the case of migrants seems to be deviating. Not so long ago debates over illegal immigrants were common, without thinking about what caused the immigrants to leave their homes. The arguments ranged from national security to religion and cultural heritage to the availability of limited resources. But, the question remains, does immigration really negatively affect the economic and social parameters of a nation?

The anti-immigrants often argued that the better quality of life in India is one of the prime reasons for the rising quantum of immigration, but the fact is it’s not the quality of life which compels one to leave their home behind but in fact the crisis. One of the great examples of immigration because of the crisis is the Myanmar Rohingyas crisis. In Myanmar, approximately seven hundred thousand Rohingyas (Muslim ethic minority group of Myanmar’s of Rakhine state) left their home when the Myanmar government launched a military campaign in 2017 and started a brutal assault against them. The inflow surged during the violent outbreak of 2012 and 2017.

India ranks the lowest among 52 countries assessed for key indices of migrant inclusivity in 2020 as per the Migrant Integration Policy Index (MIPEX). India scored 24 on the 100-point MIPEX scale, while the average score was 49/100. According to the MIPEX findings, the obstacles faced by migrants in India are greater than in the other Asian MIPEX countries. MIPEX defined India’s approach to integration as ‘immigration without integration’ because Indian policies refuse to recognise India as a country of immigration because of numerous inimical aspects of immigration.

In India, the anti-immigrants often argue that when the supply of labour goes up, the wages would be reduced for the native population and this sparks a fear of self-preservation in native people. Though it may sound logical for the short run, but going deep, the influx of immigrants also drives up the demand as they create demand in the same system. In the long run, the increased demand automatically equates with the increased supply (increased because of excess demand created by inflow of immigrants). This equilibrium helps the economy to equate the deficient demand and excess supply of labour in the labour market that gradually uplift wages.

Moreover, immigration creates the problem of job loss in the short-run only but in the long-haul, immigration is better for everyone as excess supply of labour pushes demands up for other commodities as well in an economy which in turn creates more jobs to fill the gap between demand and supply. Furthermore, this pulls down the cost of production that ultimately reflects in reduction in prices of goods and services.  Abhijit V. Banerjee and Esther Duflo also showed the positive side of immigration in their famous book 'Good Economics for Hard Time'.

Author P.M. Orrenius & M. Zavodny (2005) examined in the research entitled “Do Immigrants Work in Riskier Jobs?”, whether immigrants work in riskier jobs, as measured by injury and fatality rates, than natives. The research investigates whether immigrants work in more dangerous industries and occupations in comparison to the native people. Since they are willing to work for less, the overall cost of production is reduced and this brings down the prices of goods and services, increasing the purchasing power of the native population and helps the economy to control over inflation and other evils.

Furthermore, because of immigration the availability of cheap labour prevents firms from investing in expensive automation machinery, which saves jobs for both natives and immigrants. Rodgers W.M., & Freeman, R (2019), states in the research paper entitled “How Robots are Beginning to Affect Workers and their Wages” that the American states namely Ohio, Michigan, Indiana and Wisconsin had the sharpest growth in mechanisation from 2009 to 2017 that impacted workers and their wages negatively. A similar report from the Economic Consulting Team of The Oxford Economics (2019) titled “How Robots Change the World” states that the states namely Oregon and Louisiana are most likely to replace manufacturing jobs with robots by 2030.

It is also interesting to note that the states mentioned above have less than 11% foreign born of the total population. According to the report “Immigrant Employment by State and Industry” (2015) by PEW Trust, immigrants are 1.5 times more likely to work in more labour-intensive fields like agriculture and construction and 1.7 times more likely to hold administrative jobs. When the data is taken for a high immigrant populated state like California (26.9% foreign born population) the chances flipped by 3.6, 1.3 and 1.7 times in agriculture, construction and administrative work respectively. Hence, the natives have greater opportunities to explore high paying job areas.


This article is an attempt to show a different side of a coin, the positive side of an immigration. Yes, there can be short-term negative effects on the microeconomic and macroeconomic growth indicators of an economy but in the long run, market forces start working to equalize it as Say's Law in economics asserts that supply creates its own demand. Thereafter, if there is an imbalance in an economy for any reason, the market mechanism starts working to equalise it and fill the gap. Therefore, debates on immigrants may stir the sentiments of the general public, but they miss out on evidence that may force the general public to think differently on this serious and important political issue.

Dr Anand is an assistant professor in the NorthCap University, Gurgaon, Haryana. The article has been co-authored by Ritik Aggarwal, a student of the same institute.

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