AnaRevenga

Labor Migration and Regional Economic Integration : Labor Migration and Regional Economic Integration Ana Revenga (World Bank) May 23-24, 2007 Findings from the Greater Mekong Subregion Labor Migration Program


Objectives : Objectives Use WB-sponsored analysis of migration flows in the Greater Mekong Sub-region to illustrate: Importance of intra-regional migration flows among developing countries Characteristics of these migration flows Incipient policy responses and challenges


Migration flows between developing countries: large & rising : Migration flows between developing countries: large & rising Developing countries are home to some 75 million cross-border migrants (up from 47 million in 1985) Can identify several regional labor markets characterized by intense migratory flows Central America Southern Cone West Africa/Ecowas Europe & Central Asia SADC Greater Mekong Subregion


ECOWAS : ECOWAS


ECA REGION : ECA REGION


SADC : SADC Total Migrant Stock (about 5 million) in SADC by Region of Origin (thousands) Source: University of Sussex and UN.


Greater Mekong Sub-region : Greater Mekong Sub-region


What is behind the surge in these migration flows: the case of the GMS : What is behind the surge in these migration flows: the case of the GMS Demographics: aging of Thai population Upgrading of skills of Thai workers – universal primary and very high rates of completion of secondary education. - which combine to create shortage of unskilled labor Widening income differentials between Thailand and its neighbors Thai GDP per cap six to nine fold that of neighbors. Political instability and conflict in the sending areas


The role of demographics: : The role of demographics: Diverging demographic trends and incomes mean migrant flows will continue


The GMS: Characteristics of migrants : The GMS: Characteristics of migrants Bulk of migration happens through informal channels (and most of it is ‘irregular’) 80% of migrants from Myanmar, rest from Lao, Cambodia. Migrants heavily concentrated in border areas Disproportionately young, of working age and male. Migrants from Myanmar and Lao less educated and less literate than average in their countries of origin – ‘reverse’ brain drain Not a ‘temporary’ phenomenon –majority of migrants live in Thailand for 3 or more years


Employment and Working Conditions : Employment and Working Conditions Migrants are 3-4% of Thai working age population But in some sectors as much as 25% of employment Most migrant-intensive sectors are fishing/fish processing, construction and domestic service. But agriculture employs largest number of migrants (rubber, fruit, flowers) Migrants work longer hours and are paid less than comparable Thai workers; registered migrants better off than unregistered


Labor Market Impact of GMS migrants on wages of Local Thai workers : Labor Market Impact of GMS migrants on wages of Local Thai workers


Effects of GMS migrants on wages of local Thai workers : Effects of GMS migrants on wages of local Thai workers Study by WB and Institute of Population Studies at Mahidol University Use geographical variation across districts to test whether natives in cities/areas with lots of migrants have lower wages, all else equal Find small impact of registered migrants on the wages of ‘low skill’ Thai workers. Find a slightly larger effect on the wages of unskilled male workers than on females.


Effects of migrants on wages of Thais : Effects of migrants on wages of Thais


Policy challenges: no different than in OECD : Policy challenges: no different than in OECD How to address employers’ need for unskilled labor while ensuring basic protection and rights for migrants and without inducing even larger illegal flows How to ensure & finance access to basic services (esp. health and education) for migrants & families How to dampen possible impact on Thai workers How to maintain incentives for migration to remain ‘temporary’ How to facilitate remittances and maximize their development impact


Thailand’s Response: Brief Sketch of Thai Migration Policies : Thailand’s Response: Brief Sketch of Thai Migration Policies Policies and legal agreements are gradually being put in place to regulate migration Main legal instruments to regulate migration are the MOUs between Thailand and Lao PDR, Cambodia and Myanmar Two-phase approach to regulating labor migration: Regulation of migrants in Thailand through registration and IDs. Matching labor demand and supply through private recruitment companies.


Lessons & Operational Implications 1 : Lessons & Operational Implications 1 Progress in defining policy framework for migration but implementation challenges large Large data and knowledge gaps (e.g. size of migrant population, how to lower remittance costs etc) Weak regional capacity to implement these policies –esp. in Lao, Cambodia, Myanmar Weak governance along borders (poor enforcement and compliance) Agreement among GMS govts. that facilitating migration will produce better results than trying to restrict it – labor flows will accompany growing regional integration Too early to extract lessons but M&E of policies key to understanding impact


Lessons & Operational Implications 2 : Lessons & Operational Implications 2 In this context, see 3 main priorities for WB involvement in GMS migration: Working with statistical agencies to improve collection of migration statistics and with research groups to support analysis Working with Government agencies to help monitor & evaluate policies Helping build capacity in lower income countries of the region


Extra Slides (not for presentation) : Extra Slides (not for presentation)


Wages of GMS migrants in Thailand : Wages of GMS migrants in Thailand


Employment of GMS migrants in Thailand : Employment of GMS migrants in Thailand


CONO SUR : CONO SUR Source: INEC


Nicaragua to Costa Rica : Nicaragua to Costa Rica Source: LSMS 2005