This is a very important paper on the effects of migration: Poverty Reduction in a Refugee-Hosting Economy by Jean-Francois Maystadt. Usually the effects of migration on poverty in the host country are explored in the context of migration from developing to developed countries. This paper, in contrast, is the first one I see that looks at the effects of migration from developing to developing countries, in the context of refugee inflows. It delivers some very good news. From the abstract:
This paper exploits the time and spatial variations in the way households in the region of Kagera (Tanzania) traced between 1991 and 2004 have been affected by massive refugee inflows to assess how migration may affect poverty in the hosting communities. Large population inflows from Burundi and Rwanda have improved the welfare of the hosting population, particularly for the poor. Despite the process of structural transformation observed in the refugee-hosting economy, such pro-poor development is mainly explained by improved agricultural labor productivity and income diversification among the poor.
As far as we know, this is one of the first papers investigating the consequences of migration in a developing country and in a rural setting. Not only does migration improve the standards of living of the migrants themselves and their relatives in their village of origin, but also, at least in the region of Kagera, forced migrants (refugees) have had a strong and positive impact on the standards of living of the hosting communities. Furthermore, the refugee inflows have led to a sharp decrease in poverty in an economy experiencing a process of structural transformation. Although doubling the refugee inflows on average increases real consumption by 8 percent, the probability of getting out of poverty also increases by about 11 percent. The pro-poor nature of this development is also found to be driven by improved agricultural labor productivity and possibly income diversification among the poor. The combined conditions that seem to have favored such a pro-poor outcome are the imperfect substitution between refugees and their local hosts, an increase in market size, and land availability. The role of health and transport infrastructure were certainly complementary to these market-based channels, but the relative importance of public policies would need to be further investigated.