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Some new experiments trying to help more people emigrate from the Philippines

David McKenzie's picture

Moving from a developing to a developed country results in immediate large increases in income for the migrants, with gains that far exceed those of any other development policy intervention (e.g. Clemens et al 2008; McKenzie et al. 2010, Gibson and McKenzie, forthcoming). Yet very little of development policy (or research) is devoted to trying to allow more individuals to take advantage of this proven opportunity.  We swoon over interventions that raise a poor person’s income by the equivalent of a few cents a day, yet ignore the possibility that they would be far better off if they could move somewhere else.

One of my favorite papers in recent years is work by Gharad Bryan, Shyamal Chowdhury and Musfiq Mobarak who show that a very simple intervention – essentially buying a $8.50 bus ticket – has very large effects in terms of getting people to seasonally migrate in Bangladesh and do better as a result during the hungry season. The question is whether we can also spur international migration?

Unilateral facilitation in the Philippines
In a new paper co-authored with Emily Beam and Dean Yang, we report on several years of experiments that try to facilitate more international migration from the Philippines. The Philippines is well-known around the world for its efforts in bilateral facilitation of migration. The government has signed a number of bilateral migration arrangements with different countries, which, coupled with a well-regulated private recruiting industry, has resulted in an annual deployment of about 2 million Filipinos to practically every country in the world.

Yet the Philippines population is 97 million, with a labor force of about 42 million – so even in the Philippines, more than 95% of the labor force isn’t working abroad despite the fact that per-capita income is only US$2,600 (US$4,400 in PPP terms). When asked in the Gallup World Poll, 51.1% of surveyed Filipinos aged 15 and older say they would like to work abroad if they had the opportunity. What prevents more people emigrating?
We worked in Sorsogon, a province that sends relatively few migrants overseas, to experimentally test a number of different interventions designed to overcome different potential constraints to migration:
 

  • Information about how to apply: Details of the typical overseas costs; the steps needed to apply for work abroad; an advertisement to enroll in Pilijobs.org, an overseas job-finding website designed as part of this project; and a list of ways to avoid illegal recruitment.
  • Information about how to finance migration: Details of the typical placement fees for work abroad and a list of Manila-based financial companies that provide loans for placement fees
  • Job-matching and website assistance: We worked with several Manila-based recruitment agencies to develop and set up a jobs website on which applicants could match with recruiters and helped people enroll on this website.
  • Passport assistance: We learned partway through that recruiting agencies prioritized applicants with passports, and that it was surprisingly time-consuming to get a passport – so we fully subsidized the costs of obtaining a passport and provided staff assistance to navigate the process for this treatment group.

Our main sample consists of 4,151 individuals selected through door-to-door surveying in randomly selected barangays. These were randomized into different treatment groups above, including combinations of treatments, with the group that received all the different treatments called our “full assistance” group.

You can lead a horse to water…
Our key results are:
 

  1. Demand for migration is much lower than income differences would suggest – only 34% of our sample say at baseline they are interested in working abroad, and only 5% of the control group search for work abroad over a period of more than 2 years (see figure below).
  2. While many individuals lack information about wages and costs of work abroad, giving this information doesn’t have much impact. This relates to a previous post I did on the illusion of information campaigns.
  3. Alleviating frictions in matching and documentation barriers leads to more search effort, but no more migration: Individuals who got all information and the website assistance were three times as likely to search for work abroad, but only 0.8% of them actually migrated; our full assistance package led to 21% searching for work abroad, and also positive impacts on job-interview invitations, interview attendance, and job offer receipt – but still led to no overall increase in migration in the end.

 
Figure 1: Reported Interest in Migration, Search Effort, and Migration by Treatment Status

What’s going on, and what next for policy?
Substantial fractions of those induced to search for overseas jobs by our treatments appear to be screened out by those on the demand side of the migrant labor market – recruitment agencies and the ultimate overseas employers. But our results also suggest that demand for international migration on the part of developing-country residents is likely to be overstated – those induced by an intervention to receive actual job offers commonly reject those offers in the end.

Taken together, these results suggest far more than a bus ticket is needed to spur international migration, and that even in a context like the Philippines, where there is a lot of supplementary supporting infrastructure to help migration in place, unilateral facilitation efforts on the part of developing countries may have limited impacts. The challenge then is how to spur demand for more migrants, and investigating policies that attempt to do this appears to be an important area for research, especially given the enormous development gains possible through international migration.
 

Comments

Submitted by Paul on

If people who actually receive job offers commonly reject them, doesn't revealed preference suggest the experienced gains to migration aren't as large as your priors suggest? Obviously the income gains are high, but maybe they don't outweigh the cost of being away from family, the risk of being exploited or being unsuccessful, or some other administrative costs that you haven't thought to measure. If given all the information, people have the opportunity to migrate and choose not to, it's not so obvious that the goal of policy should be to get them to migrate.

I agree we need to understand better what the true gains are - but also what the constraints are - our research shows there are a number of barriers which impede search activity, and that labor demand is a big issue - the paper details the reasons why people turned down jobs, and it is a mix of reasons.

Submitted by Henry on

Really interesting insights.

"The challenge then is how to spur demand for more migrants, and investigating policies that attempt to do this appears to be an important area for research, especially given the enormous development gains possible through international migration."

Specifically in relation to further research, are you talking about demand from employers in receiving countries? Or the demand from developing country citizens to emigrate? Or both?

Big fan of your work - the empirical work with John Gibson about development impacts in the Pacific from seasonal workers in New Zealand in particular is fascinating.

Submitted by Lola Olarinde on

I have really benefitted from your work and Prof Dean Yang's articles as well. The figures I recall point to a global shortage in health sector. If we focus on specifics like healthcare do you consider that supply still exceeds demand for migrants?

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