The impact of international labor migration on the financing of the economies of developing countries

The dissertation investigates international labor migration, which represents a multifaceted phenomenon influenced by numerous exogenous and endogenous factors. Its multidimensional nature is determined by a combination of socio-economic, socio-political, socio-cultural, and other determinants that shape development trends, structure, and mechanisms for stimulating labor migration in the context of national goals and priorities, including the financial support of the national economy. Accordingly, the application of various theories of international labor migration generates diverse scientific and practical implications for the development of migration policy at both micro and macro levels. Specifically, the formation of a comprehensive financial complex of the national economy through transfers from international labor migrants is complicated by globalization and integration into economic mechanisms at both global and national levels.
The examination of migratory phenomena is paramount in the contemporary global landscape, as these dynamics exert profound influences on national economic frameworks, state developmental trajectories, quality of life and educational standards, welfare indices, geopolitical stability, and a multitude of other socio-economic dimensions. The escalating interest of global populations in diverse geopolitical regions is intrinsically tied to the complexities and nuances of labor potential formation and deployment. This, in turn, substantially intensifies the impact of transnational labor mobility on the evolution of the global economic system. Cross-border labor migration flows undergo significant structural and directional transformations driven by globalization, asymmetric regional development, demographic shifts, political volatility, and the macroeconomic conditions of the involved nations.
Foremost global development leaders, through the implementation of a discerning approach and the articulation of strategic priorities, endeavor to capitalize on migration as a pivotal instrument for augmenting national human capital, economic vitality, and the comprehensive social infrastructure. The multifactorial influence of migratory movements on a nation's socio-economic landscape necessitates the perpetual refinement of the regulatory mechanisms governing international labor migration. This ensures the optimization of socio-economic advantages derived from a nation's active engagement in migratory processes.
The scientific novelty of the conducted research lies in the development of a forecast for the national economy (using Ukraine as a case study of a developing country) under conditions of escalating armed aggression, considering the impact of short-term and long-term trends in international labor migration. As a result, optimistic, baseline, and pessimistic scenarios for the national economy's post-war development were proposed, taking into account the number of returnees and their employment.
Theoretical and methodological approaches to financing the economic development of developing countries in the realm of international labor migration were studied. This deepened the main theoretical concepts of interstate labor movement in the context of current realities and obstacles, examining the primary provisions regarding labor market segmentation from the perspectives of the state, labor migrants, and host society. The alignment of contemporary trends in migration policy with the Sustainable Development Goals was analyzed, revealing countries' tendencies to increase, decrease, or maintain migrant flows at the same level regionally. Approaches to migration policy were proposed to facilitate more effective labor market integration of migrants in host countries and integration policies that promote better assimilation of labor migrants in receiving countries.
Current trends and dynamics of international labor movement flows and remittance volumes from international labor migrants were analyzed, including modern money transfer channels. The main factors influencing current flows of remittances from international labor migrants were identified, including the diminishing impact of the COVID-19 pandemic and the gradual reopening of national economies, rising global inflation rates, including in labor-receiving countries, euro depreciation, and foreign currency shortages and imbalances in labor-sending countries. These factors, in turn, affect the dynamics, structure, and trends of remittances, as well as the consumption and financial behavior of households with members working abroad. Identifying these trends and factors allowed for recommendations to improve the financial and digital infrastructure for remittances, reduce remittance costs, increase the share of remittances through official channels, and enhance transparency in currency transactions.
A study on the impact of remittances on the economies of developing countries has revealed that remittances can positively influence the economic resilience of households with international labor migrants. Notably, remittances play a crucial role for these households during times of crisis and adverse events. However, remittances do not have a significant positive impact on resolving macroeconomic issues in the labor-sending countries, as a heavy reliance on remittances can lead to an increased dependency on this source of financing, resulting in a "remittance trap" phenomenon, as seen in the economy of Mexico. This type of transfer has outweighed more traditional sources, such as foreign direct investment, in the financing structure of Mexico's national economy.
The primary vectors of the impact of remittances from international labor migrants on the macroeconomic state of labor-sending countries in the global labor market can be characterized as follows: firstly, remittances contribute to the macroeconomic stability of the national economies of migrant-origin countries by stabilizing the current account balance; secondly, they exhibit a counter-cyclical nature and serve as a stable source of exogenous income, helping to mitigate the effects of economic downturns; thirdly, remittances from international labor migrants can enhance the creditworthiness of the national economy by increasing financial liquidity and reducing borrowing costs on international capital markets; finally, significant volumes of remittances can lead to an appreciation of the national currency, which, in turn, reduces the export competitiveness of the migrant-origin country. Therefore, the promotion of this source of funds into the national economy should align with the capabilities and adaptability of the country's financial system, ensuring resilience to potential macroeconomic risks.
The primary areas of use of funds from international labor migrants have been identified, encompassing current consumption, which includes covering the basic needs of migrants and their families in donor countries, as well as long-term investment activities, which may manifest in the purchase of durable goods, real estate construction, or the establishment of small and medium-sized enterprises. The areas of fund utilization depend on the behavioral aspects of household activities. An analysis of Vietnamese households that received and did not receive remittances from labor migrants employed abroad demonstrated that the expenditure shares for major items were approximately at the same level in both household groups, with minor differences observed only in healthcare expenditures. Regarding savings tendencies, households receiving remittances from international labor migrants had a higher propensity to save, whereas households that did not receive funds from abroad spent a portion of their savings, as their expenses exceeded their income levels.
The practical results of the conducted research on the financing of developing countries' economies through remittances from international labor migrants have been concretized into a series of recommendations that should be widely utilized by key stakeholders in the labor markets of host countries. A special focus was given to a set of migration policy measures that should be applied to migrants to stimulate economic growth and improve household welfare. These measures include support programs for entrepreneurial activities and investment incentives, reforms in the education and social protection systems aimed at enhancing population welfare and national economic development.

Шепель О.С. Вплив міжнародної трудової міграції на фінансування економік країн, що розвиваються : дис. ... доктора філософії : 292 Міжнародні економічні відносини / наук. кер. Р. О. Заблоцька. Київ, 2024. 236 с.