Low-skilled labor migration: Measuring Migration Costs KNOMAD The World Bank

Low-skilled labor migration: Measuring Migration Costs

KNOMAD The World Bank

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Outline Objective of KNOMAD work on measuring

migration costs

Measuring migration cost through migrant surveys

Stylizes facts on migration costs

Migration cost questionnaire ready for public use

KNOMAD Work on Measuring Migration Cost

No comprehensive data on migration cost available

To build a database on migration cost (bilateral matrix), comparable across migration corridors

To help better understand the structure of migration cost and the extent of fees paid to private recruiters and agencies.

To contribute to setting a global target to reduce recruitment costs, part of SDG – e.g., to reduce to one-month wage.

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Measuring migration costs through migrant surveys Phase I (2013/4, completed):

Pre-pilot survey in Spain, Pilot survey in Kuwait and Korea.

Phase II (2014/5, on-going): Returnee surveys in Ethiopia, India, Nepal, Pakistan

(ILO) and the Philippines. Migrant surveys in Malaysia (ILO) and Mexico Using CAPI, building capacity of local researchers

Phase III (2015/6, planed): Survey part of national labor force survey in selected countries.

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Which migration costs are we measuring in the migration cycle?

Employers request

permission

Employers issue job orders to recruiters

Job orders arrive in

labor sending

countries

Deployment process

Employment

Return/ reintegratio

n/ redeploym

ent

What constitutes migration cost in the deployment process? Compliance cost

National documents: Passport, visa Security-related: Medical check-up, security clearance Skills/competency-related: Language test Welfare fund membership

Transportation cost Internal transportation cost to obtain required

documents. International transportation cost to cross borders.

Recruitment service fees paid to recruiters/ other service providers (e.g., learn about job) Incur possibly owing to information asymmetry. A possible intervention area to correct market failure.

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Destination

Origin Recruitment costs

Earnings in destination

Recruitment costs in months of earnings

Prior earnings in origin country (month)

Korea Indonesia

1,506 1,394 1.1 219

Kuwait India 1,248 494 2.5 192

Spain Ecuador 1,046 1,300 0.8 132

UAE Pakistan

2,148 387 5.6 140

Wage in destination - a mechanism to reduce recruitment costs

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Well-managed migration policies can result in low variation across origins

Thailand Indonesia Vietnam

1466

1506

1582

Average migration cost (US$)

Workers migrated to Korea through the Employment Permit System

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To Korea, key cost components are transportation and language test (average, US$)

17 29 37 43 56 71 85

247298

364

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Spain – Below one-month wage ($1,300), largely for international transportation

Bulgaria Morocco Ecuador

201

400

1032

Average migration cost (US$)

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Implementation of BLAs – a tool to lower recruitment costs

Male Female

2309

640

(Averages, in constant 2014 US$)

Earn some $300 per month

Earn about $513 per month

Female domestic helpers – paying less than males,

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Kuwait – Seven times as much as average monthly earnings ($462)

Sri Lanka Egypt India Bangladesh

319616

1248

3136

Average migration cost (US$)

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Qatar – between 1~ 2.5 month-earnings ($588/month)

Philippines India

503

1159

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Saudi Arabia

Ethiopia Pakistan

750

4376

Equivalent to 3 month-earnings

Equivalent to some 15 month-earn-ings

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Bangladesh/ Pakistan – high visa fees (visa trading)

Bangladesh Pakistan0

500

1000

1500

2000

2500

3000

International transportPassport/ other documentsVisaRecruitment agent

(Average cost in constant 2014 US$)

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India/ Philippines – relatively high recruitment agency fees

India Philippines 0

100

200

300

400

500

600

(Average costs in constant 2014 US$)

Document/compliance costs Domestic transportation

International transportation Visa

Informal payment Recruitment agency

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Ensure workers migrate through regular channels

Regular migrants Irregular migrants0

100

200

300

400

500

600

(Average costs in constant 2014 US$)

Document/compliance costs Domestic transportationInternational transportation VisaInformal payment Recruitment agency

Ethiopia – higher fees paid by irregular migrants

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Migration cost questionnaires – Available on-line

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Migration cost questionnaires – Available on-line

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Interviews managed on-line and in-time

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Thank you

For further information, please contact manolo.abella@gmail.commartin@primal.ucdavis.edu

syi@worldbank.org