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KNOMAD releases survey data on recruitment costs for low-skilled migrant workers

Petra Niedermayerova's picture
The movement of workers across state borders has become highly commercialized in many parts of the world. The recruitment process often involves third-party intermediaries charging high fees, which frequently burdens migrants in the lowest-paying jobs.

KNOMAD is publicly releasing the KNOMAD-ILO Migration Costs Surveys (MCS) datasets, collected in partnership with the International Labor Organization (ILO). The datasets and accompanying documentation can be accessed here. Over 5,500 migrants from 19 bilateral corridors were interviewed between 2015 and 2017 to systematically document cost incurred by workers seeking jobs abroad and their working conditions in the destination countries.

A primary aim of this project is to advance development of a new SDG indicator 10.7.1, of which the World Bank and ILO are joint custodians. The proposed SDG indicator 10.7.1, titled Recruitment Cost Indicator (RCI), represents worker-paid recruitment costs for securing an overseas job, expressed as a multiple of monthly foreign earnings. Previous analysis of the KNOMAD-ILO MCS dataset in the Migration and Development Brief 28 reveals that RCI varies greatly both within and across migration corridors.

RCI is higher for low-income migrant workers and for those recruited by brokers

What factors are associated with higher recruitment costs, relative to earnings? An empirical model of the RCI reveals several factors of which two are highlighted in the results presented in Table 1. First, migrants who were offered, prior to their departure, higher foreign income tended to have lower RCI. This implies that the relative burden of total cost is higher on low income migrants - likely the least skilled or educated - who have fewer competing employment opportunities at home. Second, there is a positive association between recruitment costs and applying for an overseas job through a broker. Migrants utilizing broker services tend to bear additional expenses that are equivalent to over a month’s worth of income earned while abroad.
 

Is there a double-penalty for low income migrants?

In a related empirical model, higher RCI is also found to be associated with poorer work conditions while abroad. All else equal, migrants incurring higher RCI receive less income than what was contractually promised, are more likely to be paid irregularly and are less likely to be compensated when injured on the job. While these results are tentative, they suggest a plausible pattern of exploitation where vulnerable migrants experience both higher costs and more adverse working conditions. Consequently, they are effectively penalized twice. Efforts to improve recruitment practices may have a virtuous impact on migrant workers prior to departure and in the destination countries.