Legrain on immigrants

Tonight I attended a lecture (in the Sydney Ideas Series) from Philippe Legrain on his latest book: Immigrants: your country needs them. It was also the occasion of his Sydney book launch but luckily – in this open world – I ordered the book a month ago from the UK (and thereby avoided the high Australian book prices).


Legrain’s lecture will be available on the University of Sydney podcasts site, but here’s a short impression of both book and lecture. In short, Legrain’s message is: Let them in! Because it’s better for ‘Us’ and it’s better for ‘Them’ and for the countries where ‘They’ come from. Being trained as an economist at LSE in London, it’s not surprising that this message is very much based on economic rationales.

Many countries already have accepted the belief that allowing highly skilled migrants to enter the country is a necessity in order to survive in the current global knowledge economy. Legrain first of all argues that rigid and bureacratic assessment systems – like used in Australia – don’t make any sense since governments simply don’t know what the labour market needs will be in the future. Furthermore, innovation can not be attributed to specific types of people, but requires diversity and creativity.

What is more provacative is Legrain’s compelling case for immigration of low skilled workers. Because ‘we’ not just need managers, but also cleaners and taxi drivers and since ‘We’ don’t want to do these jobs anymore, and ‘They’ do, we should let ‘Them’ in. And of course there are plenty of humanitarian reasons to do so as well.

Obviously, the immigrants themselves will benefit if western countries open their borders to legal immigration. But so do the countries where they come from, both through the skills that the immigrants return if they go back and through the remittances they send home. These remittances make up between 200 and 600 billion US$ and end up right in the pockets of the people that need it most. Compare this with the 80 billion US$ in development assistance, which might end up in the wrong pockets (or Swiss bank accounts).

While reading the book I frequently agreed with Legrain’s economic arguments, but I kept asking myself: what about the friction between the ‘Us’ and the ‘Them’ after ‘They’ immigrate, so apparent especially after 9/11. In the last few chapters Legrain does address the issue, especially for the cases of the Latinos in the US and the Muslims in Europe (he especially addresses the problems in France, Germany and the Netherlands).

I often had the feeling that I was not the one that needed convincing; the people in inner city London, Amsterdam, New York or Sydney are not the ones that needed convincing. And I am afraid that the ones he has to convince are not very receptive to these arguments. I think I agree with Roy Williams’ conclusion in The Australian:

“These are lofty ideals, yet most people in the West remain old-fashioned nationalists. They love their country viscerally and as it is, or as it was when they were younger. Rightly or wrongly, they view immigration with caution, even regret.”

I hope that Legrain’s book will at least make people think twice about all the myths (and political rhetoric?) surrounding the issue of immigration. The book is definitely worth a read!

Economic Benefits of Higher Education

Universities UK – the umbrella organisation of the Vice-Chancellors in the UK – issued a report (by Pricewaterhouse Coopers) last week on the private economic benefits of getting a degree. The report shows that higher education is still a very good investment: university graduates earn on average about a quarter more than young people who leave school after their A-levels. In total, a degree will bring average additional earnings of £160,000 over a working life. Some more findings:
  • Financial benefit is greatest for men from lower socio-economic groups or from families from lower levels of income
  • The rate of return to the individual would be expected to rise from 12.1% to 13.2% following changes to the student finance package arising from the introduction of variable tuition fees
  • The benefits associated with HE qualifications increase as graduates get older
  • Graduates are more likely to be employed compared to those with the next highest qualification and are more likely to return to employment following periods in unemployment or economic inactivity
  • Significant costs associated with higher education are borne by the state
Diana Warwick, Chief Executive, Universities UK:

“We already know that graduates in the UK enjoy one of the highest financial returns of any OECD country. This report provides evidence that despite the expansion of higher education, the graduate premium has been maintained. Higher education is still clearly a worthwhile investment for the individual.

Also last week, they issued their third report on the impact of the higher education sector on the national economy (previous version were from 1997 and 2002). The report confirms the growing economic importance of the sector which had an income of almost 17 billion pounds a year in 2003/04 (compared with almost 12.8 billion in 1999/2000) and showed gross export earnings of 3.6 billion pounds. In the words of Drummond Bone, President of Universities UK:

All the evidence suggests that the direct economic importance of higher education will continue to grow in the future. The future expansion of student numbers, domestic and international, the development of knowledge transfer activities as well as a substantial volume of research all point in the same direction. Such activity depends on a continuing mix of public and private investment in the sector.

Income from private sources now amounts to 27% of all higher education income and this figure will increase significantly with the introduction of variable tuition fees. It is equally clear that public investment will continue to play a vital role in the development of the sector. It is evident from the findings of this report that such investment has a direct economic impact on the UK economy as well as maintaining the health of the sector.

I’m sure that these two reports – making a case for both more private as well as public investment in higher education – have been welcomed by the members of Universities UK…