Towards Safer and More Productive Migration for South Asia

Abstract

Net inflows, 2019 (current USD millions) Source: FDI, ODA, and export revenue data from World Development Indicators 2019; remittance inflow data from KNOMAD Remittances Database. Note: Remittances are defined as migrant remittance inflows (current US$), ODA is defined as net official development assistance (current US$), export revenue is defined as exports of goods and services (current US$)), FDI is defined as foreign direct investment, net inflows (BoP, current US$). Migrating individuals benefit directly from international labor migration through higher wages abroad (Figure ES4). South Asian labor migrants earn a large wage premium compared to earnings at home due to the higher average wages and productivity in receiving countries. On average, monthly labor earnings of Bangladeshi migrants were at 3,498 BDT almost four times higher in the receiving countries than in their home country (9,10 BDT). 2 In 2016 labor migrants from India earned an average of USD 362 in Saudi-Arabia compared to USD 112, on average, in their country. Workers from Nepal earned almost 5 times more in Qatar than at home. Workers from Pakistan earned 3.6 times more when working in the UAE and 4.8 times more when working in Saudi Arabia. Higher wages abroad can help improve the welfare of households back home through remittances. In addition to these immediate static effects, this large positive income shock can increase savings and the ability to insure for future shocks. It can also help increase lifetime earnings even after migrants have return home, by allowing them to finance startup over the entire life after migration once workers return home, by allowing return migrants to startup capital for entrepreneurial activities back home (Bossavie et al. 2020a).