The third scenario considered is focused on the importance of South-South migration. It is a hypothetical extreme scenario of South-South migration where South-South migrant stocks are only 10 percent of the baseline LMI-LMI migrant stocks by 2030. This will imply not just a stagnation of new South-South migrant flows, but also a reversal of some South-South migration that has already taken place.

The total stock of LMI-to-LMI migrant workers reported in the GMig2 database amounts to 15.7 million workers in 2007 and this figure is projected to rise to 23.5 million workers by 2030 under baseline assumptions (Figure 1A). Regarding absolute size, the main origin regions in the benchmark year are low-income Sub-Saharan Africa (LI_SSA), India, Bangladesh, and other Latin America (OLAC). The main LMI destination regions for LI_SSA migrant labor are other LI_SSA and other middle-income Sub-Saharan Africa (OMI_SSA) countries (93 percent); the main LMI destination for Indian migrant labor is Pakistan (53 percent); the main LMI destination for Bangladeshi migrant workers is India (95 percent); and most intra-LMI migrant workers of OLAC origin go to other OLAC countries (90 percent). For some migrant sources like Bangladesh and low-income Sub-Saharan Africa, other developing countries are not just important destinations in terms of aggregate volumes of people, but also for large shares of their migrants (Figure 1B). For migrant-sending countries like Bangladesh and Indonesia that have large migrant populations in other LMI countries, remittances from other LMI countries are also substantial (Figure 2).

While part of the observed South-South labor migration may arguably not be motivated primarily by earning differentials between home and host country, the average wage earnings of a SouthSouth migrant still tend to be significantly higher than the average wage earnings of a native nonmigrant in the origin region.<sup>9</sup> Unskilled migrants from the poorest countries and regions like Bangladesh and Sub-Saharan Africa can gain substantially from migrating within the South. Unskilled migrants from Bangladesh, in particular, gain almost as much from going to other Southern countries as they do from migrating to Northern countries. These patterns are also a reflection of the migrant labor demand of host countries, with many developed countries preferring skilled migrants over unskilled.

# **3. Higher South-North Migration Flows**

The movement of labor towards locations with higher labor productivity raises global real GDP considerably over the simulation period and by 2030 annual aggregate real world income is nearly

> 9 For example, the average annual gross wage of an unskilled intra-LI_SSA migrant is 33.5 percent higher than that of the corresponding average LI_SSA non-migrant. The corresponding wage differentials for unskilled LI_SSA migrants to OMI_SSA are +146.7 percent, +120.0 percent for Bangladeshi migrants in India, and +18.5 for intraOLAC migrants. The average annual gross wage of a skilled intra-LI_SSA migrant is 58.7 percent higher than that of the corresponding average LI_SSA non-migrant. The corresponding wage differentials for skilled LI_SSA migrants to OMI_SSA are 87.9 percent, 6.9 percent for Bangladeshi migrants in India, and 11.3 for intra-OLAC migrants.

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