Why migration is the best solution for Haiti's recovery.
Long before the calamity in Haiti, many Haitians and their families benefited from working abroad, and many, including me, have suggested allowing more Haitian immigrants into the United States as a way to help the country's economy recover.
It might seem strange that the best solution to Haiti's woes lies outside its borders, but migration and remittances have been responsible for almost all of the poverty reduction that has happened in the island country over the past few decades. They have done enormously more good than any policy intended to reduce poverty inside Haiti during that time. Any poverty-reduction strategy for Haiti going forward that does not include what has been Haitians' most successful poverty-reduction strategy to date is not a serious one.
This idea is a no-brainer if we take a minute to look at the numbers.
First, Haitians have already emigrated in droves. There are around 535,000 Haitian-born U.S. residents at the Census Bureau's last count, out of roughly 1 million in total living abroad.
The vast majority of Haitians who have escaped poverty have done so by leaving the country. Pick any reasonable poverty line for Haiti; the vast majority of Haitians above it no longer live there. In a study I did with Harvard's Lant Pritchett, we chose a bare-bones poverty line of $10 per day (measured as a living standard at U.S. prices). That's total destitution -- just a third of the $30 per day that the United States considers "poverty" for a single adult. Eight out of 10 Haitians above that line currently live in the United States.
Most of this represents the effect of emigration on poverty. Only 1 percent of people in Haiti live on more than $10 per day, and there is no evidence that most Haitian emigrants come from the extreme tip-top of the income distribution, so very few people who emigrated would have an income that high if they had been forced to stay home. A typical low-skill male Haitian in the United States earns at least six times what he could earn in Haiti. And all of this just accounts for Haitians in the United States. Include the roughly 100,000 more who are in Canada and Western Europe, almost all of whom live on over $10 per day, and it's even starker: The vast majority of Haitians who escaped poverty did so by leaving Haiti, not as a result of anything that happened in the country.
What about Haitians who did not emigrate? A limited number of these have emerged from poverty, but many were lifted out of poverty by remittances from abroad. They, too, should be included in any accounting of the effect of migration on poverty. Dilip Ratha, a top expert on remittances, estimates that a full accounting would show that Haitians abroad send home $1.5 billion to 1.8 billion per year or higher. That is much more than all the foreign aid that Haiti receives. The middle of Ratha's range suggests that remittances account for more than one quarter of Haiti's GDP. This is conservatively low because remittances have a multiplier effect on local GDP.
Living standards in Haiti have not improved in the last 30 years. They've gotten much worse. According to the World Bank, the annual income of the average person in Haiti, measured as a living standard at U.S. prices, steadily declined from $2,400 in 1980 to roughly $1,200 just before the earthquake. It is certainly even lower now.
The poverty inside Haiti would almost certainly be much greater without remittances. Economist Manuel Orozco has shown that remittances to Haiti are primarily spent on the most basic necessities of food, clothing, shelter, and medicine. Because remittances are impossible by definition without emigration, and cover at least a quarter of people's income in Haiti, emigration must have substantially reduced poverty for those back home.
What all of these numbers mean is that the large majority of all poverty reduction that has occurred for Haitians -- whether outside Haiti or inside Haiti -- has been caused by international migration and remittances. Foreign aid has had little or nothing to do with it. The numbers do not allow any other reasonable interpretation.
Why, then, is migration seen as a sideshow as donor countries discuss how best to help Haiti rebuild? Their first step should be to leverage the force that has most helped Haitians in the past. The United States has agreed not to deport any Haitians for a limited period, but it has only been deporting about 1,000 Haitians per year for the past decade. The suspension of deportations will make very little difference in how Haitians are living abroad and sending money home.
The United States has another option for helping Haitians. I propose a new kind of U.S. visa for Haitians and poor people around the world, a Golden Door Visa. This would formally recognize that one of the unwritten goals of immigration policy is global poverty reduction. The Golden Door Visa would not necessarily mean more immigrants. Instead, the United States could reallocate visas within the current levels to include people from the world's poorest countries who are most in need of opportunities. This small adjustment to U.S. immigration policy would have a big impact by improving the lives of poor immigrants and those who remain in their home countries through remittances.
We can do a back-of-the-envelope calculation of what additional migration could do. Suppose the United States lets in 100,000 Haitian immigrants, which is the number that currently arrives over a span of five years. First, this would dramatically raise their incomes and raise essentially all of them out of extreme poverty. Second, this would increase the size of the worldwide Haitian diaspora by 10 percent. If the new migrants remit like earlier migrants did, this would mean roughly $150 million to 180 million every year in additional remittances for Haiti (and because things are so much tougher in Haiti now, we could expect new migrants to remit more than migrants have before). The Guardian reports that as of today the United States has committed a one-time total of $167 million in aid. Remittances recur year after year, and unlike aid, almost the whole amount of remittances goes directly into needy families' pockets.
Of course, migration alone is not "the answer" for all Haitians. Unfortunately, one big answer for all Haitians does not exist. As donors discuss what to do for Haitians going forward, it should be with extreme humility. Billions of dollars of aid have yielded very little poverty reduction there to date. Aid and other measures, such as improved access to U.S. markets, are worth continuing, of course, but they are unlikely to have dramatically different effects in the near future than they have had for the past two generations.
Migration, on the other hand, has clearly and demonstrably lifted many Haitians out of poverty. It should be an important component of the portfolio of assistance for Haiti. Many people react with fear to statements of this kind, thinking that "more" Haitians is synonymous with "every" Haitian, and that a flood of Haitians would sink the countries they would move to. But the numbers of Haitians moving to the United States has been so small -- just 2 percent of all immigrants to the United States -- that even a substantial increase would hardly constitute a flood.
I discussed these very issues further in a blog post, published the day before Haiti's tragedy, and it is certainly tragic that it took such an event to put the problem on world leaders' agenda.