What is the best way to measure economic development? Most economists still focus on gross domestic product (GDP) or gross national income (GNI) per capita. Bhutan has inspired some to focus on "gross national happiness" (see my earlier post on Bhutan and GNH here). Researchers at the Center for Global Development are now proposing a new measure: income per natural.

Michael Clemens and Lant Pritchett use income per natural to measure the average annual income of all individuals who are born in a given country, regardless of where they live at any given time. According to their calculations, almost 43 million people live in countries where income per natural is 50 percent higher than GDP per capita, and for over 1 billion people the difference is greater than 10 percent. Clemens and Pritchett argue that this new measure recognizes that, for many, emigration is an important means towards increased welfare.

The bottom line: migration is one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.

Can migrant workers help to improve an economy? An article in the Economist says they can. According to the National Research Council with a high school education a migrant worker can contribute as much as 105,000 dollars in taxes, along with the contribution of their children once they are employed.

Migrants need health, skills, determination, a willingness to take risks and some entrepreneurial nous to take the plunge, which marks them out as special people. Moreover, migrants increasingly alleviate specific labour shortages in rich economies. Some economies could not function without foreign workers.

While the immigration debate in the United States is largely focused on the U.S.-Mexico border, an article from National Geographic looks a bit farther to the south. An estimated 400,000 migrants from Central America cross the border into Mexico every year, and though some stay to work in Mexico, most are headed for the U.S.

The economic prosperity of the U.S. has a strong pull effect on the Latin American poor, and the money that migrant workers send home to their families is having an increasingly large impact on their national economies. In Honduras, for example, remittances sent home from the U.S. made up one-fifth of the country’s gross national income in 2006.

“There is no solution to this,” a former Chiapas state official said wearily, after ticking off a list of southern border upgrade programs that have fizzled into ineffectiveness over the past decade. “You can put all the control measures down there that you want, but it’s not going to be fixed. The solution is to eliminate poverty.”