Understanding Migration Costs in Low-skilled Labor Migration

This content delves into the work of KNOMAD and The World Bank in measuring migration costs for low-skilled labor migration. It outlines the objectives, phases, and methodologies used to assess various costs incurred throughout the migration cycle, such as compliance costs, transportation expenses, and recruitment service fees. The ultimate goal is to contribute to the reduction of recruitment costs on a global scale. The content highlights the importance of understanding and addressing the structure of migration costs to support better policy-making and reduce exploitation in labor migration.

• Migration Costs
• Low-skilled Labor
• KNOMAD
• World Bank
• Study

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

2. 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 2

3. 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.

4. 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. 4

5. Which migration costs are we measuring in the migration cycle? Job orders arrive in labor sending countries Employers request permission Employers issue job orders to recruiters Return/ reintegration/ redeployment Deployment process Employment 5

6. 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.

7. Wage in destination - a mechanism to reduce recruitment costs Destinat ion Origin Recruit ment costs Earnings in destinati on Recruit ment costs in months of earnings 1.1 Prior earnings in origin country (month) Korea Indonesia 1,506 1,394 219 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 7

8. Well-managed migration policies can result in low variation across origins 1582 Workers migrated to Korea through the Employment Permit System 1506 1466 Thailand Indonesia Vietnam Average migration cost (US$) 8

9. To Korea, key cost components are transportation and language test (average, US$) 364 298 247 85 71 56 43 37 29 17 9

10. Spain Below one-month wage ($1,300), largely for international transportation 1032 400 201 Bulgaria Morocco Ecuador Average migration cost (US$) 10

11. Implementation of BLAs a tool to lower recruitment costs (Averages, in constant 2014 US$) Female domestic helpers paying less than males, 2309 Earn some $300 per month Earn about $513 per month 640 Male Female 11

12. Kuwait Seven times as much as average monthly earnings ($462) 3136 1248 616 319 Sri Lanka Egypt India Bangladesh Sri Lanka Egypt India Bangladesh 12

13. Qatar between 1~ 2.5 month-earnings ($588/month) 1159 503 Philippines India 13

14. Saudi Arabia 4376 Equivalent to some 15 month-earnings Equivalent to 3 month-earnings 750 Ethiopia Pakistan 14

15. Bangladesh/ Pakistan high visa fees (visa trading) 3000 (Average cost in constant 2014 US$) 2500 2000 1500 1000 500 0 Bangladesh Pakistan International transport Visa Passport/ other documents Recruitment agent 15

16. India/ Philippines relatively high recruitment agency fees (Average costs in constant 2014 US$) 600 500 400 300 200 100 0 India Philippines Document/compliance costs International transportation Informal payment Domestic transportation Visa Recruitment agency 16

17. Ensure workers migrate through regular channels Ethiopia higher fees paid by irregular migrants 600 500 (Average costs in constant 2014 US$) 400 300 200 100 0 Regular migrants Irregular migrants Document/compliance costs International transportation Informal payment Domestic transportation Visa Recruitment agency 17

18. Migration cost questionnaires Available on-line 18

19. Migration cost questionnaires Available on-line 19

20. Interviews managed on-line and in-time 20

21. Thank you For further information, please contact manolo.abella@gmail.com martin@primal.ucdavis.edu syi@worldbank.org 21