Better Jobs Can Outweigh a Secure Life

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People on a boat in BangladeshOn Nov. 7, 2012, a motorboat carrying 110 illegal immigrants heading for Malaysia capsized in the Bay of Bengal close to Bangladesh’s southeastern border with Myanmar. This tragedy came less than a fortnight after a boat with more than 135 passengers capsized in the same area. “Boat capsized with illegal immigrants from Bangladesh” is a recurring story, with Thailand, Malaysia, and other Southeast Asian countries the destinations of illegal work seekers. What makes Bangladeshis resort to such extreme methods of migration?

The answer is straightforward. Migration has become a major source of gainful employment for Bangladesh’s growing unemployed and under-employed labor force. The number of legal Bangladeshi migrants abroad is about 7.6 million, more than twice as large as employment in the garment industry and about 13% of the total labor force. The sharpest increase in the level of migration occurred during 2006-2009. As a result, remittances surged. Bangladesh is now among the top six recipients of migrant remittances among developing countries. A recently published World Bank report, “Bangladesh: Towards Accelerated, Inclusive and Sustainable Growth – Challenges and Opportunities” discusses at length the economics of labor migration and remittances in Bangladesh. This piece focuses on the economic factors underlying international migration from Bangladesh.

Labor outflows from Bangladesh are largely a response to the lack of gainful employment opportunities in the domestic economy as well as rising demand for unskilled labor in the non-traded services sectors of labor-importing economies. “Push” factors such as poverty, underemployment, and low wages at home combine with “pull” factors such as prospects of higher wages and full employment to drive the supply of migrants.

Oil-driven economic activities have made the Gulf Cooperation Council countries potentially advantageous destinations for Bangladeshi migrants. Presence of past migrants helps current migrants turn the potential advantage into actual advantage. The migration flow can gain a life of its own because a sufficient pool of past migrants at a destination reduces the cost of current migration. Economic liberalization and exchange rate decontrol have also enhanced the economic returns to migration.

Both demographic and economic factors affect the likelihood of migration at the individual level. Most surveys of Bangladeshi migrants find that migrants tend to be young, married males with moderate education. According to the IOM 2009 survey, the most recent available, migrants are predominantly males (98 percent) with an average age of 32 years. Three-quarters had at least completed primary schooling, while 10% of all migrants never attended school. Only 13% of migrants had completed secondary education, and even fewer had obtained a degree (5%).

Analysis relating migration status to individual migrants and their household characteristics based on the 2010 Household Income and Expenditure Survey data helps assess the relative importance of various factors affecting migration. Our results are strikingly similar to those found in other studies. The probability of migrating is higher for males and Muslims. Age and education bear a non-linear relationship with the probability of migrating. In both cases, migration probability first increases and then declines after reaching a threshold value of 43.3 years of age and 10.5 years of education. This confirms the anecdotal impression that most people migrate temporarily at a young age. The decline in the probability of migrating at higher levels of education reflects the fact that most of the migrants are unskilled or semi-skilled. We also find an inverse relationship between the pre-remittance income and the probability of migrating, suggesting the dominance of differential economic advantage in the decision to migrate.

Given Bangladesh’s vast young population (more than 62% of the labor force is 15-39 years old) and the demographic transition, the number of potential migrants in the near- and medium-term will increase. Migration cannot be a substitute for economic development in the country of origin. However, in a labor surplus economy, migration can be a useful safety valve if the economy is unable to generate enough jobs to provide gainful employment to all workers. This is especially true in Bangladesh, whose largely unskilled or semi-skilled workers struggle to make more than $1.25 a day. Consequently, they sometimes take inordinate risks to migrate. Risky and illegal intrusion from Bangladesh to East Asia and Europe is frequent. Poor workers are lured by the prospects of better jobs, for which evidently they are willing to risk the security of life at home.

Branko Milanovic, in his just-published paper on global income inequality, concludes with what he calls a “slogan: either poor countries will become richer, or poor people will move to rich countries. Actually, these two developments can be seen as equivalent. Development is about people: either poor people have ways to become richer where they are now, or they can become rich by moving somewhere else. Looked from above, there is no real difference between the two options. From the point of view of real politics, there is a whole world of difference though.”


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