Immigration Paper Series 09

GUEST WORKER PROGRAMS

AND CIRCULAR MIGRATION: WHAT WORKS?
FRIEDRICH HECKMANN
European Forum for Migration Studies

ELMAR HÖNEKOPP
Institut für Arbeitsmarkt- und Berufsforschung

EDDA CURRLE
European Forum for Migration Studies
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Guest Worker Programs and Circular Migration: What Works?

Immigration Paper Series

May 2009

Friedrich Heckmann,
European Forum for Migration Studies (efms)
Elmar Hönekopp, Institut für Arbeitsmarkt- und Berufsforschung
Edda Currle, European Forum for Migration Studies

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Lessons from the guest worker program in Germany, 1955–1973 . . . . . . . . . . . . . . 4
Lessons from the Bracero Program in the United States, 1942–1964 . . . . . . . . . . . . . 7
New programs for a changed situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The present discussion on labor migration programs in the European Union . . . . . . . 9
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

*This first edition of the European Forum on Migration Studies policy brief presents the results of the expert meeting “Can Guest
Worker Programs Work?” supported by the German Marshall Fund of the United States (GMF). We would like to thank the
Washington and Berlin staff of GMF for their kind assistance in organizing the joint expert meeting in Washington, DC.
1 Introduction
Somewhat surprisingly, the new millennium
has seen the reappearance of temporary labor
migration programs in political discourse within
both Europe and the United States. Germany had
already introduced temporary programs in the
1990s for seasonal and project-tied workers. “Guest
worker program,” “circular migration,” “Green
Card” (in Germany), and “Blue Card” are among
the terms currently being used in the somewhat
confusing political debate as well as in lawmaking.
For example, in 2000 Germany introduced a
temporary Green Card status for guest workers;
the Bush-Kennedy compromise for the proposed
Comprehensive Immigration Reform Act of 2007
Guest Worker Programs and Circular Migration:
spoke of a guest worker program; and the EU
Commission has presented concepts for circular
migration and a Blue Card (European Commission
2007 and 2007a).
This policy brief aims at evaluating these concepts
for temporary labor migration programs. It first
looks at two historical cases of such programs and
asks what kind of lessons could be learned from
the German guest worker program and the Bracero
Program of the United States. A second part
examines circular migration as recommended by
the EU Commission, a concept that is scientifically
discussed in regard to the United States as well.
3
What Works?
 2 Lessons from the guest worker
program in Germany, 1955–1973
The German guest worker program was a response
to a labor supply problem. A demand for foreign
labor developed quite early in Germany at a
time when the overall unemployment rate was
still quite high. In 1955 Germany signed its first
recruitment contract with Italy. Until 1961 the
influx of immigrants from the German Democratic
The guest worker Republic to the Federal Republic of Germany was
program was high. Therefore, it was only after 1961—when
immigration from East Germany abruptly
conceived as a
stopped—that strategic recruitment in Germany
strictly temporary
gained momentum as a series of recruitment
program in which
treaties with different Mediterranean countries
new workers
were signed.
would rotate
between their The institutionalization and expansion of the
country of origin program in the 1960s had a number of major
and Germany. causes, among them:
• Das deutsche Wirtschaftswunder: High
economic growth increased the demand
for labor.
• The founding of the Bundeswehr: Initially it
required 500,000 soldiers plus 200,000 civilian
employees, causing a sharp reduction in the
labor supply.
• The building of the Berlin Wall: Until
construction of the wall began on August 13,
1961, some 150,000 to 300,000 people annually
had escaped the East German regime and come
to the Federal Republic of Germany; most
were in their early working years and quite
well qualified. Cessation of this labor supply
severely increased pressure on the labor market
from 1961 onward.
• Expansion of secondary and higher
education: More people remained in schools
and universities, and this decreased the supply
of available labor.
• Demography: The number of people ages
15–65 decreased during the 1960s.
• Decreased numbers of women in the labor
market during the 1960s: Instead of increasing
4 The German Marshall Fund of the United States
and making up for the smaller supply resulting
from other factors, this segment of the
workforce became a little smaller.
• The reduced number of hours worked per
week: Germans worked an average of 40 hours
per week in the 1960s instead of the 48 hours
they had worked in the 1950s.
The guest worker program was conceived as a
strictly temporary program in which new workers
would rotate between their country of origin
and Germany. All participants in the program
were convinced that this indeed was a temporary
program. However, these parties have had different,
sometimes opposed interests and perceptions of
the program:
The employers: Employers wanted cheap and
motivated workers who could easily be laid off in
times of a recession; guest workers were desirable
for positions (mostly in industry) for which native
workers either could not be recruited in sufficient
numbers or would pose much higher costs. In
many cases employers opted for cheap labor over
investment in new and technologically advanced
machinery. On the whole, employers took a rather
short-term perspective.
The receiving country: Enormous migration
processes had occurred in Germany since the
end of World War II. Between 1945 and the early
1950s, about 12 million German refugees and
expellees came to the allied zones from former
German territories or from German ethnic
minority settlements in Southeastern and Eastern
Europe and the Soviet Union. Before the building
of the Berlin Wall in 1961, 3.8 million people
migrated from East Germany to the Federal
Republic. The settlement and integration of these
large populations—despite an overall successful
development—were still ongoing processes that
needed resources. Against the backdrop of this
situation, new sources of settlement migration were
not wanted. Additionally, temporary labor contracts
for guest workers could serve as a buffer to protect
native workers in times of a recession and keep the
unemployment rate low. This happened, in fact,
during the recession of 1966–1967.
Another factor in the preference for temporary
migration on the side of the state was the German
“ethnic nation” concept. This concept helped
the integration of ethnic German refugees
and expellees, but hindered the integration of
foreigners, who did not belong to the German
Volk. These considerations were summarized in the
formula: Deutschland ist kein Einwanderungsland,
“Germany is not an immigration country.”
The sending countries: Sending countries have
played a decisive role in initiating contracts with
receiving countries in Europe. Turkey, for example,
saw its emigrant guest workers as agents for the
development and modernization of the country
after their return. Italy, to name another example,
tried to reduce a deficit in its balance of payments
through remittances (Kolb 2002, 101).
The workers: People migrate in order to improve
their lives. Emigrants want to improve their lives
abroad when they think they cannot achieve this by
staying at home. Germany’s guest workers however,
by temporarily working abroad and saving money
there, intended to improve their life at home. They
planned to save enough money to either found
or enlarge a small business or farm in their home
country. Typical goals envisioned were to become
independent farmers or to own a taxi or transport
business, or a store or some other small business.
In other words, the migrants also had a temporary
stay in mind when they came to Germany.
For the majority of guest workers, the program
indeed functioned as it had been intended. They
worked for a limited time and may have renewed
their work permit, often several times, but finally
Guest Worker Programs and Circular Migration:
returned to their home country. In that sense the
program was not a total failure. But millions of
other guest workers did not return. Instead, they
had their families move to them, settled, and in
fact became immigrants. They gave up the idea
of improving their lot in their country of origin
and instead tried to improve their lives in the
new country. The development
of the immigration
The development of this immigration situation can
be better understood by looking at what happened
situation in
to the initial intentions of the main actors in Germany can be
the process: better understood
by looking at what
The employers: Employers realized the advantages happened to the
of keeping workers who had been socialized in their initial intentions of
firm or factory and were known to be productive. the main actors—
A strict rotation principle, with ever repeating
employers,
adaptation and socialization for the new workers,
receiving country,
was costly and full of risks. Employers’ increasing
consciousness of these socialization costs became
and workers—in
apparent in an indirect way: They made the Federal the process.
Labor Office agree to a recruitment procedure by
which they could hire workers who were relatives
and friends of those already working in the firm.
Relatives and friends would then effectively help in
the socialization of the new people at little cost for
the firm (Jamin 1998: 74–82).
The receiving country: Until the end of the 20th
century, Germany stubbornly clung to its idea
of “Deutschland ist kein Einwanderungsland,”
defending the temporariness of the migration
process. The integration policy that was formulated
in the 1970s and 1980s was “Integration auf
Zeit.” Yet, in practice, in response to business
interests the German government had to allow for
prolongations of residence and work permits. It
also had to support measures for integration and
allow for family reunification. What Phil Martin
has called the “rights revolution,” which partly
derived from the international human rights
discourse, continuously improved residence titles
5
What Works?
 and integrated the migrants into the institutions of
the welfare state.
Another paradoxical development further
increased the tendency toward an immigration
process instead of a temporary work regime: the
recruitment stop of 1973. The so-called oil crisis at
The main the beginning of the 1970s—we would, by the way,
lesson to be be happy today to have the crisis-provoking prices
of that time—plus a recession and labor market
learned from
crisis made the government order an end to guest
the German
worker recruitment in 1973. The intention was to
guest worker
decrease the number of foreigners in Germany.
program is that Paradoxically, however, the recruitment ban
it is very difficult further reinforced the settlement process: Those
to restrict such planning to return, but who had been counting on
workers to an an option to come back to Germany, decided to
economic role. stay in order not to lose their residence status, and
they also decided to have their families join them.
The number of foreigners increased instead of
decreasing (Bauer 1998: 176).
The workers: The motives, goals, and orientations
characteristic at the beginning of the labor
migration—that is, the firm intention to return
home—cannot be regarded as static or constant.
They come under the influence of conditions
in the new society and the perceptions of the
country of origin from abroad. In Germany, new
experiences and processes of beginning to bind to
the new country first resulted in the dissolution of
a concrete time perspective and precise intention to
return. Several surveys in the 1970s demonstrated
that few guest workers continued to maintain a
precise plan for return (see, e.g., Mehrländer 1986
and Hönekopp 1987).
6 The German Marshall Fund of the United States
Working and living in new surroundings and under
new conditions led to the creation of new habits
and expectations, new patterns of consumption
included. Reunification of the family in the host
society not only enforces a change in savings and
consumption patterns, thus influencing plans
for investment in the country of origin, but also
removes what is probably the strongest bond
of foreign workers to their native country, i.e.,
their families. Family reunification integrates
the household into the reproductive process of
the new society. A concrete plan for return is
given up, and the return plan is upheld only in a
general and abstract way, in many cases changing
into a motivation to stay or a plan to return only
at retirement age. Wanting to be close to one’s
children and being able to be treated in the high-
quality German health system often dissolves
that intention for return at retirement as well. A
temporary worker has changed into an immigrant.
The main lesson to be learned from the German
guest worker program is that it is very difficult
to restrict such workers to an economic role. On
the one hand, there are the interests of employers
in keeping productive workers who have been
socialized into the job and the firm. On the other
hand, the longer workers stay, the less they can be
denied basic human rights and integration into
society. Western states cannot and do not want to
rotate workers in the brutal way that is practiced by
authoritarian regimes in the Middle East.
3 Lessons from the Bracero Program in
the United States, 1942–1964
In spring 1942, under the pressure of California
growers, the United States Immigration and
Naturalization Service formed an interagency
committee to study the question of agricultural
labor. Mexico stepped in as a supplier of labor, but
for the first time Mexico and the United States
entered into a bilateral government-to-government
accord: The Official Bracero Agreement for the
Temporary Migration of Mexican Agricultural
Workers to the United States (Official Bracero
Agreement 1942) was signed between Mexico and
the United States on August 4, 1942. Although
the original agreement expired in 1947, the
program continued informally and without further
regulation until 1951.
From 1942 to 1947, more than 200,000 “braceros”
entered the United States and worked in 24
states. The majority were employed in California.
From 1948 to 1951, around 400,000 legally
contracted “braceros” worked on U.S. farms
(www.farmworkers.org/migrdata.html), but the
number of illegal aliens apprehended by the INS
was three times as high (Calavita 1992, Appendix
A). Probably the majority of the illegally entered
Mexicans worked illegally on farms.
The money earned by legal (and illegal) Mexican
migrants constituted an important source of foreign
exchange. Although a presidential commission
denied the need for further Mexican braceros in
1950, the Korean War was used to justify approval
of a new program: Public Law 78 was implemented
in July 1951, and the new Bracero agreement was
Guest Worker Programs and Circular Migration:
signed in the following month. Changes in the
nature of the program could be observed and
an important step had been taken toward the
institutionalization of importing Mexican labor. On
the U.S. side, the agreement clearly reflected the
political power of U.S. farm interests.
With the implementation of the “wetback bill” and
The curtailment
the extension of the migrant-labor agreement early
of the Bracero
in 1952, the Bracero Program entered a period of
growth and stabilization. From 1952 to 1959, more
Program in 1960
and its end in
than 2.5 million Mexican nationals were employed
on U.S. farms (Craig 1971: 101–102). In 1954 a 1964 saw the
new Bracero agreement was created, but after two beginning of the
further extensions in 1961 and 1963, Public Law 78 increasing wave of
expired in December 1964. With its expiration, 22 illegal immigration
years of large-scale bracero contracting came to an that we see up to
end. More than 4.5 million Mexican farm workers the present.
had been legally contracted for work on U.S. farms
over the period from 1942 to 1964 (Craig 1971: 1).
Ending the formal program, however, did not
stop its consequences, as thousand of former
braceros continued to enter the United States
and seek jobs, albeit as illegal immigrants. The
curtailment of the Bracero Program in 1960 and
its end in 1964 saw the beginning of the increasing
wave of illegal immigration that we see up to the
present. Therefore, the predicted agricultural labor
shortages didn’t occur. The impact on the labor
market, however, had already begun during the
program as it depressed existing wages and reduced
employment of domestic farm workers (Waller
Meyers 2006: 2).
7
What Works?
 4 New programs for a changed
situation
Guest worker programs in general aim to add
temporary workers to the labor force without
adding permanent residents to the population
(Martin 2003: 1). Workers are expected to return to
their home country after having worked abroad for
several years. Past programs, however, have been
said to have “failed” in the sense that they caused
Against the unintended effects such as permanent and illegal
widespread immigration. Martin relates these problems to two
understanding, phenomena: distortion and dependence. Distortion
circular migration refers to the recipient labor markets drawing on the
is more than only assumption of permanent influx of guest workers,
a special form whereas dependence focuses on migrant workers
and sending economies becoming dependent on
of temporary
foreign jobs (Martin 2003: 3).
migration.
Managing labor migration in a way that does
not lead to distortion, dependence, and more
unauthorized migration is especially daunting.
Guest worker programs may be part of the answer,
but simply relaunching past programs is likely to
produce the same problems (Martin 2007: 37). Both
in Europe and in the United States, the concept
of circular migration is being discussed as an
alternative.
The Global Commission on International
Migration emphasized in its report the relevance
of circular migration: “The Commission concludes
that the old paradigm of permanent migrant
settlement is progressively giving way to temporary
Table: Typology of circular migration according to Agunias and Newland
Permanent migrants
Return of Irish diaspora in the
Permanent return
late 1990s
Taiwanese migrants from Canada Contract workers from the
Temporary return
and Silicon Valley
Source: Agunias/Newland 2007, 4
8 The German Marshall Fund of the United States
and circular migration.” The report suggested that
destination countries should promote adequate
models (Global Commission 2005: 31). The
worldwide discussion on circular migration is
based on considerations of the importance of
remittances and the potential of organized migrant
labor measures for developing countries. The
win-win-win argument of the model is underlined.
Advantages are seen not only for the receiving
countries, but for the sending countries and the
migrants themselves. Circular migration is also
seen as a means of reducing irregular migration.
Giving quotas to sending countries for legal
migration should motivate them to cooperate with
receiving countries in fighting illegal migration
where it originates.
Different stakeholders in the political and scientific
discussion mean different things when talking
about circular migration. Against the widespread
understanding of circular migration as a special
form of only temporary migration, Agunias and
Newland developed a more complex typology of
circular migration (Agunias/Newland 2007).
Their typology includes both permanent and
temporary migrants returning either permanently
or temporarily. It shows that circular migration
is more than temporary migration and includes a
variety of migration forms and types of return.
Temporary migrants
Korean turnkey project managers
in the Middle East
Philippines
5 The present discussion on labor
migration programs in the European
Union1
The present situation in Europe differs from the
situation in the 1960s because of the following
factors:1
• Increasing illegal immigration and illegal
employment, especially of workers from third
countries
• Growing numbers of seasonal workers from
the EU and third countries
• High unemployment rates among low-
qualified workers, very low unemployment
rates among highly qualified workers
• Aging of society and decreasing labor supply
throughout all EU countries, especially in the
new EU member states
• Increasing demand for (highly) qualified
workers because of the demographic, but
especially due to technical developments
• International competition for highly qualified
workers
The European Council requested the European
Commission to examine how legal migration could
be better integrated into the external relations
of the European Union, and how circular and
temporary migration could be facilitated. In its
Communication of May 16, 2007, the European
Commission submitted two proposals (European
Commission 2007).
First proposal: Establishment of mobility
partnerships
In such partnerships, sending and receiving
countries would agree to accept mutual obligations.
Sending countries would readmit migrants without
legal status, combat illegal migration, and provide
for a better control of their borders. In return, the
receiving countries would extend the possibilities
1
Chapter 5 is based on Brücker/Hönekopp 2007.
Guest Worker Programs and Circular Migration:
for legally accessing the labor market, introduce
measures to reduce the brain drain by promoting
circular and return migration, and by easing the
granting of visas.
Second proposal package: Promotion and
development of circular migration
Two forms of circular migration are to be The European
differentiated: a) circular migration of third- Commission
country nationals with a main residence in the EU, will develop a
but additional economic activities in the home number of legal
countries, and b) circular migration of third- instruments to
country nationals who would be granted temporary promote circular
residence permits with privileged mobility between migration. The
home and receiving country, but would not be general purpose
allowed permanent settlement.
of these activities
The main group b) comprises very different is to increase
persons: seasonal workers, students, university the welfare of
graduates, researchers, participants of training both the member
courses, and the like. Circular migration here is states and the
understood as a temporary legal permit to stay sending countries.
within the EU granted to a limited number of
persons and including the obligation to return
to the home country. Returning persons can be
exchanged for new migrants. Returnees, however,
can be given specific and privileged opportunities
to re-enter.
The European Commission will develop a number
of legal instruments to promote circular migration
such as the directives on the admission of highly
qualified migrants, the admission of seasonal
workers, and the admission of trainees with
training contracts. The general purpose of these
activities is to increase the welfare of both the
member states and the sending countries (the latter,
for example, by reducing the brain drain).
9
What Works?
 Assessment of the economic impact
Circular migration has pros and cons for both the
receiving and sending countries:
For the receiving countries,
• Pros: Since foreign labor is more mobile and
Circular flexible, cyclical and structural shocks can be
migration can better absorbed, thus lowering unemployment
among immigrants and among all workers.
contribute to
• Cons: Because of shorter stays, incentives to
a reduction of
invest in human capital are low.
unemployment • Result: Circular migration is obviously more
via flexible relevant for occupations and activities with
adaptation of lower qualification needs (e.g., seasonal
labor supply to workers in agriculture). It should definitely not
labor demand. be used for qualified workers.
However, circular
migration For the sending countries,
workers usually • Pros: Human and professional skills gained
do not gain in the foreign countries can easily be made
human capital available for the economies of the home
in the receiving countries (what is limited, however, by the
aspects referred to above). Higher financial
countries.
remittances can be expected compared to those
for permanent migrants. This contributes to
economic development.
• Cons: Return migration can cause labor market
frictions (search costs, mismatch), thereby
increasing unemployment.
• Result: Circular and temporary migration can
contribute to economic development, but only
to a limited extent.
Empirical results for Germany confirm these
hypotheses. According to findings of the German
Socio-Economic Panel (GSOEP), 60 percent
of all foreign workers have returned to their
home countries at least once. With a share of 41
percent, the proportion of workers from the EU
among all circular migration workers is quite
high. Free movement of labor seems to promote
10 The German Marshall Fund of the United States
return migration and circular migration. In
many cases, however, this has a negative impact
on the employment situation of these workers
in both the receiving and the home countries, at
least if the migrants are not well qualified. Italian
nationals are an example of this (see, e.g., Constant/
Zimmermann 2003: 6–12). On the other hand,
the unemployment rates among highly mobile
and qualified workers are low, the respective
employment rates are very high, and the wage level
is often much higher than that of natives.
In sum, circular migration can contribute to a
reduction of unemployment via flexible adaptation
of labor supply to labor demand. However, circular
migration workers usually do not gain human
capital in the receiving countries, which has a
negative impact on their labor productivity and
hence on their competitiveness on the labor market.
Therefore—in the long run—their contribution to
the economic development in the sending countries
must be considered as very limited.
Assessment of the political measures
regarding the control of circular migration
The proposals of the European Commission
are not very concrete yet. Therefore, only a very
general assessment is possible at the moment. In
terms of their impact, two kinds of proposals can
be distinguished: a) measures intended to increase
incentives for circular migration by providing
more rights for legal permanent residents, and
b) measures intended to promote a “forced”
circular migration through the granting of
temporary residency rights and through privileged
reentry options.
Increasing the incentives for circular migration
has several implications: Against the background
of empirical findings in Germany and the EU
mentioned above, circular migration can be
expected to increase. At the same time, such an
increase would be accompanied by a tendency
toward permanent residence, which would
undermine the original intentions. An increase in
circular migration can be useful in economic terms,
as it contributes to more mobility and flexibility.
The benefits resulting from this migration for both
receiving and sending countries should be better.
Mobility partnerships can help reduce search and
information costs, increase mobility, and decrease
mismatch as well as unemployment rates in the
corresponding countries.
The second type of proposed measures, intended
to force return migration, would not seem to
make sense in economic terms, nor does it seem
possible to turn such measures into practice. On
the one hand, the granting of temporary work and
residence permits contributes to the immigration of
less-qualified workers, who often compete for jobs
with native workers who have similar skills. On the
other hand, temporary work and residence permits
for highly qualified workers make no sense, as
many of them are able to be much more productive
in the receiving countries than in their home
countries. Therefore, they should not be forced to
return to their home countries. At the same time,
past experiences show that a temporary limitation
on work and residence permits often cannot be
enforced. Workers and employers can find various
ways to obtain permanent permits. Moreover,
there are many factors that induce people to
stay in a country illegally. Also, the practical
implementation of mutual obligations as part of
mobility partnerships (e.g., obligations to reaccept
return migrants or to control borders) seems to be
quite difficult. In many cases, income differences
between sending and receiving countries are still
huge. There is clear evidence that the most efficient
way to combat illegal migration is to reduce
economic incentives rather than relying on legal
regulations and fines.
Guest Worker Programs and Circular Migration:
A general assessment of the Commission’s
proposals affirms that a combination of measures
to promote circular migration with mobility
partnerships can contribute to comprehensive and
coherent approaches in labor market and economic
policy. Migration policy should be integrated into
an overall strategy governing development policy.
This would contribute to more convergence of the Migration in
economies in neighboring regions. Examples in general and
the near past (e.g., the economic integration of the circular migration
former COMECON countries into Europe and the can speed up
global economy) confirm that such strategies are
the convergence
feasible and successful. Migration in general and
process.
circular migration can speed up the convergence
process. Convergence of the income per capita does
not reduce incentives to migrate in the short run,
but it very clearly does so in the long run.
Alternative political proposals
The intention of the European Commission to
increase the mobility of labor between the EU
and third countries is basically very meaningful.
Migration contributes to a more efficient use
of labor and thus to an increase of the GDP.
Simulations show that the higher the qualifications
of immigrants, the better the economic impact of
labor migration on entire regions in the receiving
countries. The sending countries, however, do
benefit more from the emigration of people with
lower qualifications. Against the background of
demographic changes, the receiving countries
benefit additionally from considerable gains in the
general welfare, which correlate directly with how
high the immigrants’ qualifications are.
An immigration policy for long-term change that
also takes into consideration the interests of the
sending countries should pay attention to the
following criteria:
11
What Works?
 1. Increased qualification level of immigrants:
In Germany and other European immigration
countries, the immigrant population has
on average a very low qualification level (in
contrast to other countries of immigration
such as the United States, Canada, Australia,
An immigration and New Zealand) that is accompanied by a
policy for long- risk of becoming unemployed. Controlling
immigration on the basis of qualification criteria
term change that
would clearly increase welfare gains.
also takes into
consideration the 2. Increased immigration rates in the long run:
interests of the
sending countries Because of demographic changes, migration
can contribute to additional gains in both the
should pay
sending and the receiving countries. Empirical
attention to six
studies show that migration have very little or
decisive criteria.
no influence on unemployment risks or wages
for the native population in the long run. At
the same time, welfare systems and economic
growth benefit considerably from immigration.
Also, in the sending countries, GDP per capita
increases due to these processes as long as effects
on the labor markets are taken into account.
Remittances additionally stimulate these effects.
3. I ncreased incentives for return and circular
migration:
To better absorb economic shocks, incentives
for return and circular migration should be
improved, especially for qualified migrants
through granting permanent residence and work
permits as well as reentry options.
4. Limiting the granting of temporary work and
residence permits:
Temporary work and residence permits reduce
the incentives to invest in human capital.
Therefore, they should be applied and limited to
specific cases of interest only.
12 The German Marshall Fund of the United States
5. Promotion and support of investments in
education in the sending countries:
Sending countries benefit from migration when
the qualification structure of the emigrants
is improved in the migration process. More
recent research results on the phenomenon
of brain drain show that the possibility for
emigration fosters investments in qualification,
i.e., emigration does not necessarily reduce the
availability and development of human capital
within the sending country. Better cooperation
between receiving and sending countries
in this area could help by further reducing
negative effects.
6. Contribution to economic development and
improvement of the institutional framework
in the sending countries:
Agreements on the promotion of circular
migration in combination with mobility
partnerships could become a nucleus of
cooperation in development policy, e.g., by
promoting corresponding economic and labor
market policies and by improving the legal and
administrative framework conditions. Successful
examples of such an approach are the association
agreements entered into between the former
transition countries of Central and Eastern
Europe and the EU. This would contribute to
improved economic prospects for the respective
sending countries (and their regions) and
in particular, lessen the pressure on highly
qualified workers to emigrate permanently.
Final remarks: Circular migration as
part of the development of a European
migration policy
In December 1999 the European Summit of
Tampere (Finland) decided upon a general
outline of a joint European migration policy to
be developed. General access to the EU, border
control, asylum questions, legal and illegal entry
and stay, labor migration, and cooperation with
migrants’ countries of origin are the main subjects
of this ambitious work program. Circular migration
is part of this broader program. A number of other
steps have been taken since 2007.
At the end of October 2007, the European
Commission released two draft proposals:
a) A directive outlining a “European Blue Card”
for entry and residence of third-country
nationals for highly qualified employment
b) A proposed application procedure for a
single permit for third-country nationals
to reside and work within the territory of a
member state, and a common set of rights for
third-country workers legally residing in a
member state
These two drafts are still being discussed within the
European parliamentarian procedure. Therefore,
on November 4, 2008, the EU Parliament launched
proposals regarding amendments to the Blue Card
directive (e.g., rules on the definition of a “Blue
Card” worker).
With the publication of these proposals, the
European Commission announced further
proposals regarding seasonal workers and paid
trainees, as well as company-internal mobility
between EU member countries. The first proposal
was to have been presented in autumn 2008, and
the second was expected in early 2009. A directive
for “Returning illegally staying third-country
nationals” had already been passed by the European
Council and by the European Parliament in June
2008. A further directive proposal is in the process,
dealing with “Sanctions against employers of
illegally staying third-country nationals.”
All these steps, far from being independent of
one another, share the clear overall concept of
Guest Worker Programs and Circular Migration:
the Commission, which has had to convince
the member states of the necessity of a joint
migration policy. The Hague program of 2004 was
a milestone in this direction. A preliminary but
central keystone has been set with the European
Pact on Immigration and Asylum, as passed by the
European Council during the summit in Brussels
that took place October 15–16, 2008. No new
political measures were presented by the pact,
but it binds the various political fields together
into a coherent European policy concept, with a
clear competence for the EU as such and for the
Commission.
The pact deals with the following five areas:
1. Legal immigration: demand for qualified
workers, “Blue Card,” and integration
2. Illegal immigration: return of illegal immigrants,
better cooperation in sending unwanted
immigrants home, and treaties with immigrants’
homelands
3. Border controls: prevention of both illegal
arrivals as well as tragic deaths, especially
security of the southern borders, and the role
of Frontex (EU agency for external border
security), with more capacity and competence
4. Asylum policies: development of common
guarantees on asylum, joint asylum
support office (2009), and single asylum
procedure (2010)
5. Countries of origin and transit: creation of a
comprehensive partnership for encouraging
synergy between migration and development
The results in these policy fields will be discussed
annually, supported by respective reports and
recommendations for further steps. A new program
will be designed as successor to the Hague program.
13
What Works?
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Guest Worker Programs and Circular Migration: 15

What Works?
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