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Are migrants more likely than nationals to be unemployed during economic crisis?

Sudharshan Canagarajah's picture

There has recently been heated debate regarding migrant employment behavior in host countries during and after economic crises. The popular view is that migrants have an incentive to remain unemployed as long as they have access to unemployment benefits, free health care, and education. Thus, many argue, that migrants should not be provided with benefits as they create perverse incentives for migrants to stay unemployed. However, recent data does not support such a simple relationship. In fact recent data shows that sometimes migrants that lose jobs tend to find work quickly during and after crises.

A recent article in the Economist based on OECD Migration Outlook 2011 provided some useful data to show the complex patterns of migrant unemployment compared to nationals. The data shows that the relationship between migrants and unemployment incidence depends on a variety of labor market conditions including unemployment benefits, skill level of migrants, business cycle patterns, the sectors they are employed in, and labor market flexibility.

Almost a third of Indians, or over 300 million people, are migrants

Sanket Mohapatra's picture
  Photo © Simone D. McCourtie / World Bank

India’s Ministry of Statistics and Programme Implementation has just released the “Migration in India 2007-08” report (June 2010) based on the 64th round of the National Sample Survey (NSS). This nationally representative survey includes 125,578 households (79,091 households in rural areas and 46,487 households in urban areas) which together have 572,254 individuals. The report has many interesting findings on internal and international migration and remittances in India, which you can read in the press release. I have highlighted a few that I found interesting:

Almost a third of Indians, or over 300 million people, are migrants. 28.5 percent of Indians (some 325 million people, out of a population of 1.14 billion in 2008) are migrants, according to the survey. 35 percent of people in urban areas and 26 percent of people in rural areas have moved from their place of usual residence.However, migration in India is largely confined to within the same state. 72 percent of migrant households in urban areas and 78 percent in rural areas have migrated within the same state.

Migrant remittances and private capital flows - Which is what?

Sanket Mohapatra's picture

The Uganda Daily Monitor reported recently that according to the World Bank’s latest Global Economic Prospects report, “remittances to developing countries is forecasted [sic] to recover modestly from $454 billion in 2009 to $771 billion by 2012, which still stands below the 2007 $1.2 trillion.” Since we produce the global remittances data and estimates (which incidentally show that remittance flows to developing countries

Photo © Curt Carnemark /  World Bank
reached $316 billion in 2009 and are forecast to grow by 6.2 percent to $335 billion in 2010 (see Migration and Development brief 12), the numbers in the Uganda Monitor made little or no sense to us. Until our colleague Andrew Burns, the lead author of the GEP 2010, pointed out that the Uganda Monitor has likely mistaken overall private capital flows to developing countries as remittances.

The issue of migrant remittances being confused with private capital flows (and even aid flows) is not new. Central banks all around the world have been struggling with this issue for several years now. A global survey of central banks that we conducted during 2008-09 suggests that central banks find it challenging to separate migrant remittances from other small-value transfers such as trade payments, small investments, and even transfers by/to non-governmental organizations and embassies.

Crisis, employment, and migration

Dilip Ratha's picture

Last week I participated in the World Economic Forum Global Redesign Summit at Doha (see program ). In a brainstorming panel, the kind where you hit your head against the wall, I was asked the following question:

Photo © Yosef Hadar / World Bank
Following the economic crisis, how can countries boost the employment intensity of economic recovery? And how might win-win migration arrangements among developed and developing countries be stimulated through international cooperation?

Despite the leftist tone of this question, it is important to note that being pro-labor does not imply a bias against capitalists. My response to this question can be summarized as follows:

1) Let labor markets work
2) Let's make realistic policies but not lose the long-term perspective
3) Let's think on a global scale.