Labor Mobility Report

8/6/2019 Labor Mobility Report

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B O R M O B I L I TB O R M O B I L I TB O R M O B I L I TB O R M O B I L I T R E P O R T O N R E P O R T O N

,N G D A N T E F R A N C I S,A L U Y O T E M I L Y

,O R R I G E M A R I E M I C H E L L E,U N G O E L E A N O R

,R O S P E D I A N E F R A N C I N E

N I V E R S I T Y O F S A N T O T O M A S R A D U A T E S C H O O L


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T O P I C SO P I C S

. Y P E S O F L A B O R M O B I L I T Y

. .E N E F I T S V S C O S T S O FM I G R AT I O N

. E Y D E T E R M I N A N T S O FM I G R AT I O N

. A C K F L O W S O F M I G R A T I O N

. E R S O N A L G A I N S F R O M L A B OM I G R AT I O N

. L L O C A T I V E E F F I C I E N C Y(A I N S A N D

)Q U A L I Z A T I O N O F W A G E S R O M L A B O R

M O B I L I T Y. X T E R N A L E F F E C T S O F

M I G R AT I O N


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B O R M O B I L I TB O R M O B I L I TB O R M O B I L I TB O R M O B I L I T


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D E F I N I T I O NE F I N I T I O N

A B O R A B O R

M O B I L I T YO B I L I T Y ;ovement of workers ,orkers tend to switch employers, ,ccupations geographical locations

;r some combination of all three , ,mployers on the other hand

espond to changing economic,ircumstances by hiring

,ransferring or discharging;orkers closing or expanding

;resent facilit ies or moving .perations to new location ,ombined these actions of workers

nd employers produce much movement,f labor from employer to employer

,ccupation to occupation and place


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E S O F L A B O R M O B I E S O F L A B O R M O B I E S O F L A B O R M O B I E S O F L A B O R M O B I


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Y P E S O F

A B O R M O B I L I T Y

I III

II IV

L O C A T I O NO C A T I O N

O

C

C

U

P

A

T

I

O

N

O

C

C

U

P

A

T

I

O

N

S A M E D I F F E R EN T

S

A

M

E

D

I

F

F

E

R

E

N

T


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Y P E S O F


: /ox I Job Change No Change in ccupation or Residence

ncludes transfers of employees

rom one of a firms units to nother in the same local area

. -x Branch re assignment for,ank employees workers switch mployers but within the(ocality but with the same

)ob


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Y P E S O F


: /ox III Geographic Change No hange in Occupation

eographic Mobili ty ertains

o movements of workers from a, ,ob in one city state or

.ation to another

,n many cases geographic moves esult in changes in jobs but

.ot changes in occupation

.x Nurses who leave Phil ippine ,ospitals to join one abroad rofessional basketball player

et traded from Los Angeles to.hicago


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Y P E S O F


: /ox IV Geographic Change Change n Occupation

-eographic job related moves are eing accompanied by changes

;n occupation represents both

eographic and occupational.obili ty

.x Nurses from other regions( )n the Philippines might move

o NCR to take other available( . . ),obs e g call center jobs eachers and other

rofessionals transfer to.ther nations to become OFWs


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.E N E F I T S V S C O S T S.E N E F I T S V S C O S T S F M I G R A T I O NF M I G R A T I O N

.E N E F I T S V S C O S T S.E N E F I T S V S C O S T S F M I G R A T I O NF M I G R A T I O N


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.E N E F I T S V S O S T S O F M I G R A T I O

ne way of understanding geographic obili ty is through the development

nd testing of the human capital model.f migration

-uman Capital consists of income, ,roducing skill knowledge and

xperience embodied within.ndividuals This stock of capital cane increase by specific actions

nvestment in human capital btaining more education and

:dditional training hat requires present acrifices but increase the

tream of future earnings

.ver one s lifetime -i g r a t i o n t o a h i g h e r p a y i n g


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i l l migration occur in all i tuat ions where a potential

xists for increased lifetimeearnings? .o B e c a u s e t h e r e a r e

o s t s a s s o c i a t e d w i t h t h e i g r a t i o n i n v e s t m e n t t h a t

u s t b e w e i g h e d a g a i n s t.h e e x p e c t e d g a i n s

he main costs are transportat ion,xpenses forgone income during,he move psychic cost leaving

,amily and friends and the loss

f seniori ty and pension.enefits


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f the present value of the xpected of the expected

ncreased earnings exceeds the resent value of these,nvestments costs the person

.i l l choose to move ,f the opposite is true the

ndividual will conclude that i t,s not worthwhile to migrate

ven though the earnings otential in the destinat ion area ay be higher than in the present

.ocation


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E Q U A T I O N

:here Vp = resent value of net benefits E2 = arnings from new job in

ear n E1 = arnings from existing job n yea r n = ength of time expected on ew job

= (nterest rate discount)ate= ear in which benefits and

osts accrue= irect and indirect monetary

ost resul ting from move in the year n= et psychic costs of move


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f Vp > 0 , mplying that the expected arnings gain exceeds the combined onetary and net psychic investment, .osts the person will migrate

f Vp < 0 , he person will remain in his.r her present job and location

,l l else equal the greater the annual(arnings differential E 2-E1) etween

,he two jobs the higher will be the(resent value of the net benefits V p),

nd the more likely it will be than an.ndividual will migrate


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E Y D E T E R M I N A N T S E Y D E T E R M I N A N T S F M I G R A T I O NF M I G R A T I O N

E Y D E T E R M I N A N T S E Y D E T E R M I N A N T S F M I G R A T I O NF M I G R A T I O N


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E YD E T E R M I N A N T

F M I G R A T I O N

A G EG E

l l e l s e b e i n g

,q u a l t h e o l d e r

,h a t p e r s o n i s t h e e s s l i k e l y h e o r

. h e i s t o m i g r a t e


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F M I G R A T I O N

A G EG E lder migrants have fewer years ;o recoup their investment costs

he shorter the t ime period one as to gain the annual earnings

,dvantage the smaller the Vp term n the equation

lder people tend to have higher evels of human capital that are

pecif ic to their present; mployers the longer a person s

,ob tenure the greater the amount- -f on the job training and

mployer financed investment of


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F M I G R A T I O N

A G EG E lder people often have higher igrat ion costs than younger

;eople psychic cost may rise with;ge The higher these net psychic

,osts the lower the value of Vp nd the less likely one is tomigrate

nverse relationship between age nd migration exists partially

ecause people are most mobile f ter completing lengthy

nvestments in human capital


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F M I G R A T I O N

A M I LY A M I LY

F A C T O R SA C T O R S h e p o t e n t i a l

o s t s o f m i g r a t i n g

u l t i p l y a s f a m i l y. i z e i n c r e a s e s


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F M I G R A T I O N

A M I LY A M I LY

F A C T O R SA C T O R S arried workers have less tendency ,o migrate than single people ther factors such as age and

ducation being constant

arried workers have higher igrat ion rates whose spouses

i ther do not work or work at lowpay

,f both spouses earn a high wagehe family s cost in forgoing

ncome during the move will

e high


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F M I G R A T I O N

A M I LY A M I LY

F A C T O R SA C T O R S -he presence of school age children an reduce the likelihood of;igrat ion psychic costs

ssociated with the move are to reat relative to the expected onetary gain


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F M I G R A T I O N

E D U C AT I O ND U C AT I O N

h e h i g h e r o n e s d u c a t i o n a l

,t t a i n m e n t a l l,l s e b e i n g e q u a l

h e m o r e l i k e l y i t s t h a t o n e w i l l


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F M I G R A T I O N

E D U C AT I O ND U C AT I O N ollege graduates and those with ostgraduate training search for

mployment in regional and ational labor markets in which

mployers seek qualified;mployees

ide disparit ies of pay for rofessional and managerial

mployees provide more pportunity to move to jobs

ntail ing greater responsibil i ty nd pay


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F M I G R A T I O N

D I S T A N C EI S T A N C E

h e p r o b a b i l i t y o f i g r a t i n g v a r i e s n v e r s e l y w i t h t h e

i s t a n c e a p e r s o n. u s t m o v e


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F M I G R A T I O N

D I S T A N C EI S T A N C E ,he greater the distance the less nformation a potential migrant

s likely to possess about the.ob opportunities available

ransportation costs usually.ncrease with distance

he longer the physical distance

,f the move the more probable it s that psychic costs will be.ubstantial


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F M I G R A T I O N

N E M P L O Y M E N T N E M P L O Y M E N T

R AT E SAT E S i g h u n e m p l o y m e n t a t e s i n a n o r i g i n

o c a t i o n s h o u l d n c r e a s e t h e n e t e n e f i t s f r o m

i g r a t i n g a n d p u s h


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F M I G R A T I O N

N E M P L O Y M E N T N E M P L O Y M E N T

R AT E SAT E S amilies headed by unemployed ersons are more likely to igrate than others

he rate of unemployment at the-r igin posit ively affects out

migration


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F M I G R A T I O N

T H E R T H E R

F A C T O R SA C T O R S .ome ownership deters migration ccupational l icensure reduces igrat ion by impeding the flow of

icensed practi t ioners among tates having differing licensing.equirements

tate and local government

olicies may influence labor.igration

ederal defense contracts appear o shift labor regionally in the

.nited States


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F M I G R A T I O N

T H E R T H E R

F A C T O R SA C T O R S ,n international migration the anguage spoken at the estination is a prime factor

.ffect ing mobili ty

nion membership may be a.etermining factor

ome scholars suggest that people

ncreasingly have placed a high r iori ty on environmental quality nd climate in their migration

.ecisions


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K F L O W S O F M I G R A K F L O W S O F M I G R A T K F L O W S O F M I G R A K F L O W S O F M I G R A T


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A C K F L O W S

F M I G R A T I O N


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E R S O N A L G A I N S F R E R S O N A L G A I N S F R A B O R M I G R A T I O NA B O R M I G R A T I O N

E R S O N A L G A I N S F R E R S O N A L G A I N S F R A B O R M I G R A T I O NA B O R M I G R A T I O N


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E R S O N A L A I N S F R O M

A B O R M I G R A T I O


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C A T I V E E F F I C I E N C Y G A C A T I V E E F F I C I E N C Y G A R O M L A B O R M I G R A T I O R O M L A B O R M I G R A T I O

C A T I V E E F F I C I E N C Y G A C A T I V E E F F I C I E N C Y G A R O M L A B O R M I G R A T I O R O M L A B O R M I G R A T I O


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A L L O C A T I V E F F I C I E N C Y G A I N S

R O M L A B O R M O B I L I T

L L O C AT I V E L L O C AT I V E

E F F I C I E N C YF F I C I E N C Y l locat ive Efficiency an be efined as a condition in the arket structure where all of

esources are allocated in the est systematic way so as to aximize the net profi t achieved

.hrough their use It is ynonymous to Pareto efficiency

hich was put forward by Italian.conomist VilfredoPareto Pareto%oticed that 80 of the land and

%ealth in Italy was owned by 20.f the population Pareto analyzed


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L L O C AT I V E L L O C AT I V E

E F F I C I E N C YF F I C I E N C Y ,n short allocative efficiency is l l about having more benefits hile producing relatively few

.iabil i t ies L L O C A T I V E E F F I C I E N C Y I N L A B O L L O C A T I V E E F F I C I E N C Y I N L A B OM O B I L I T YO B I L I T Y conomic Efficiency exists when a

ation achieves greatest possible

eal domestic output or income

, ,rom its available land labor apital and entrepreneurial

.esources LABOR MOBILITY is

.rucial in approaching this goal


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L L O C A T I V E E F F I C I E N C Y I N L A B O L L O C A T I V E E F F I C I E N C Y I N L A B OM O B I L I T YO B I L I T Y

et us look at the numerical l lustration below and assume:he following

. ,here are only 2 labor markets ach perfectly competitive and ach is situated in a different

.eographic location.2

. ach labor market has fixed number f workers and there is no.nemployment

.5

. -on wage job amenities and

ocational attributes are the same

.n both areas


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L L O C A T I V E E F F I C I E N C Y I N L A B O L L O C A T I V E E F F I C I E N C Y I N L A B OM O B I L I T YO B I L I T Y

et us look at the numerical l lustration below and assume:he following

. .apital is immobile.5 . orkers possess perfect information bout wages and working

.onditions in both markets.8

. igration between the two markets.s costless


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olumns 1 nd 2 n the Table display he demand for labor in market A while

olumns 1B nd 2

B.how it for market B,he wages are given in annual terms

nd because of our assumption of erfect competition in the product and

,abor markets these wages equal the( ).alue of the marginal product VMP

olumns 3 nd 3 umulate the VMP data o show the value of the total product

( )TP associated with each level of.mployment

he VMP is greater for each labor arket A than in B and this arises

rom greater capital and technological ndowments of A than B so the


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n the example let us suppose that 2 orkers are employed in market A and

, ( )ach earns US$23 000 boxed figure, ,hile 8 workers earning US$ 7 000 each( ).re working in B boxed figure

,iven our assumptions workers in B i l l migrate to A in pursuit of higher

.arnings


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H A T H A P P E N S T O A N N U A L H A T H A P P E N S T O A N N U A L A R N I N G S I N B O T H M A R K E T S W H E A R N I N G S I N B O T H M A R K E T S W H E

I G R A T I O N O C C U R S ?I G R A T I O N O C C U R S ? he number of workers in A will increase

nd this will cause the market wage to,all while in B the decline in number of

orkers will increase the equilibrium.age IGRATION will continue until the wage

dvantage in A is totally eliminated and.his occurs in the circled box At this

,nnual wage employers in the highly-apital endowed A will hire 6 workers, .hile in B 4 workers will be hired

,s s u m i n g p e r f e c t c o m p e t i t i o n c o s t l e s s, ,n f o r m a t i o n a n d c o s t l e s s m i g r a t i o n

a r k e t w a g e s w i l l e q u a l t h e v a l u e o f t h e( = )a r g i n a l p r o d u c t o f l a b o r W V M P a n d


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O E S M I G R A T I O N O F L A B O R O E S M I G R A T I O N O F L A B O R N H A N C E T H E T O T A L V A L U E O F N H A N C E T H E T O T A L V A L U E O F

U T P U T O F A N A T I O N ? U T P U T O F A N A T I O N ? e f o r e m i g r a t i o n , he value of the total

( ) ,roduct VTP was $48 000 in market A, .nd $112 000 in market B Thus the

-ombined pre migration VTP was ,160 000 ( , + , ).48 000 $112 000

f t e r m i g r a t i o n , he total VTP of 6 orkers in market A was valued at $

,20 000 while the 4 workers in market B, . ,roduced $72 000 Combined this output orresponds to a total of ,192 000

( , + , ).120 000 $ 72 000


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C O N C L U S I O NO N C L U S I O N

he simple model above shows that age differentials create an ncentive for labor to move from

.ne market to another This

,obili ty or migration equalizes ages and results in.l locativeefficiency It

enerates the highest possible alue of total output from.vailable resources


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R A P H I C A L R A P H I C A L

P R E S E N T AT I O NR E S E N T AT I O N age narrowing and efficiency gains rom migration can be shown.raphically For variety let us use an.nternational example The graph A

hows the demand of labor in the US nd graph B portrays the labor demand.n the Philippines


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P R E S E N T AT I O NR E S E N T AT I O N mployment and wage levels in the S and Philippines are represented by oints 0 e , Wu nd 0 l , W . ecause of he assumption of perfect information

,nd costless migration labor will move rom the Philippines to the US until quilibrium wage W s achieved in

.ach nation Positive efficiency gains i l l accrue to the world from this

.igration The US gains domestic utput equal to the area of b c f n raph A and Philippines loses domestic

utput equivalent to the area ofk i j l .n graph B Because the US gain

,XCEEDS the Philippine loss the total


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P R E S E N T AT I O NR E S E N T AT I O N ,tate differently the sum of areas0 a c f n A and 0 h i k n B exceeds the-RE MIGRATION areas 0 a b e lus ,h j l eading us to the conclusion that

- -age induced labor migration whether-nternal or international increases he total income and output in the

.ombined origin and destination

IGRATION therefore enables a larger otal output to be achieved from a .iven available amount of resources


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X T E R N A L E F F E C T S X T E R N A L E F F E C T S F M I G R A T I O NF M I G R A T I O N

X T E R N A L E F F E C T S X T E R N A L E F F E C T S F M I G R A T I O NF M I G R A T I O N


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X T E R N A L F F E C T S O F

M I G R A T I O N

R E N D S B E H I N D M O B I L E R E N D S B E H I N D M O B I L EW O R L DO R L D

. emographic trends.B . conomic isparit ies between eveloping and developed

countries.D

. rade ibe ra li za tion necessi ta ting more mobile abor force.F

. ommunication etworks linking all arts of the world

.H

.I ransnat ional migration


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M I G R A T I O N

O M E D E M O G R A P H I C O M E D E M O G R A P H I CT R E N D SR E N D S opulation of developed . %ountries growing at 0 3

he rest of the world is rowing six times as fast

,apid growth along with ,conomic difficulties pushes eople out of their habitat

eclining and aging opulation of developed ountries pressure them to

ccept migrants

Based N population forecasts ,apan and Europe n countries


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M I G R A T I O N

C O N O M I C F A C T O R SC O N O M I C F A C T O R S

conomic liberalization Rising emand for labor in he developed economies nd availabil i ty of labor

n underdeveloped conomies has set global

abor migrat ion in motion

G obalization has ncreased the mobil i ty of

abor across borders ,einforcing he movement

f skil led workers


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M I G R A T I O N

C O N O M I C F A C T O R SC O N O M I C F A C T O R S

conomic decline declining global economyproduces ownward

ressure on the movement,f labor especially in the nfo rmation technology

( ), ,T construction and anufacturing sectors


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M I G R A T I O N

R A N S N AT I O N A L R A N S N AT I O N A LM I G R AT I O NI G R AT I O N

mergence of the ransnational igration space reated by advances n transportation and communication

echnologies that link places and eople globally

,n this space migrants huttle between more than onehome

he gaps eographic space nd igration space ave shrunk , ausing

-ar reaching consequences on nte rnat iona l migra tion

ome of the outcomes growing cceptance of dual

,i t izenship multiple


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N T E R N AT I O N A L N T E R N AT I O N A L A B O R M I G R A T I O NA B O R M I G R A T I O N

N T E R N AT I O N A L N T E R N AT I O N A L A B O R M I G R A T I O NA B O R M I G R A T I O N


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I N T E R N A T I O N A L


1 4 M I L L I O N M I G R A N T 1 4 M I L L I O N M I G R A N TW O R K E R SO R K E R S ,ver the past decade the number of nternational migrants increased

rom 150 million in 2000

% 1 of the world s population are igrant workers

f they lived in one,ountry it would be the

-i f th most populous in the

orld today

%9 of all the migrant workers arewomen


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1 4 M I L L I O N M I G R A N T 1 4 M I L L I O N M I G R A N TW O R K E R SO R K E R S

. %urrent annual growth rate is 2 9 ,rom 1965 to 1990 the

. %rowth rate was 2 1( ncrease by roughly 45

)i l l ion


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H E R E D O M I G R A N T S H E R E D O M I G R A N T SW O R K ?O R K ? ountries with a i g h p e r c e n t a g e f migrants include Qatar (87 %),

nited Arab Emirates (70 %), ordan( 6 %), Singapore (41 %), nd audi

rabia ( 8 %)

ountries with a o w p e r c e n t a g e f igrants include South Africa

( .7%), Slovakia ( .4%), Turkey ( .9%), apan ( .7%), Nigeria ( .7%), Romania ( .6%), India ( .4%) nd Indonesia ( .1%).


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-4 1 4 B R E M I T T E D I N 4 1 4 B R E M I T T E D I N2 0 0 90 0 9 ncreased exponentially romUS$ 32 bill ion in 2000 to about

US$ 14 bill ion in 2009

,ctual figures may be higher ecause it does not take into ccount unrecorded remittances hrough formal channels and

oney sent through informalchannels

op reciepients i , ,2009 India, ,hina Mexico Philippines , nd

Poland

4 1 4 B R E M I T T E D I N


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-4 1 4 B R E M I T T E D I N 4 1 4 B R E M I T T E D I N2 0 0 90 0 9 ain sources S ( argest with S$46 bill ion recorded outward

)lows in 2008 followed by Russia ,Switzerland , nd Saudi Arabia


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-3 1 7 B O F T O T A L W A S 3 1 7 B O F T O T A L W A S E M I T T E D T O D E V E L O P I N G E M I T T E D T O D E V E L O P I N G

C O U N T R I E SO U N T R I E S %he figure represents 74 of the otal remitted worldwide

ncreasing trend up rom US$ 3 i l l ion and 63 % n 2000

( )he figure $317 bil l ion is ore han twice as large as official

-id and nearly two thirds of( )oreign direct investment FDI lows to developing countries

Documents

Labor Mobility Report