July 11-13, 2023, Cambridge UK

3 DAYS / 10 Workshops
MORE THAN 200 ACADEMIC PAPERS

The Economics of Migration to the Gulf: Perspectives from Countries of Origin and Destination

Migration is a socio-economic phenomenon that has important economic impacts on both countries of origin and destination, as well as on migrants and their families. Since the beginning of their modern economic development, countries of the Gulf Cooperation Council (GCC) have been particularly reliant on migrant labour of virtually all skill levels, such that the proportion of migrants to local workers is currently among the highest in th ...


Migration is a socio-economic phenomenon that has important economic impacts on both countries of origin and destination, as well as on migrants and their families. Since the beginning of their modern economic development, countries of the Gulf Cooperation Council (GCC) have been particularly reliant on migrant labour of virtually all skill levels, such that the proportion of migrants to local workers is currently among the highest in the world. Migration affects recipient economies through the influx of productive resources in the form of skills and experiences, as well as through increased economic activity via stimulating recipient countries’ aggregate demands. On the other hand, migrants typically receive higher labour earnings as compared to their opportunity cost back home, leading to sizable remittances that, in turn, affect their families and countries of origin at both the micro- and macroeconomic levels. Furthermore, migration trends exert significant impacts on the distribution of income and wealth and are affected by imperfections such as discrimination and the lack of social protection. This workshop 2 aims at discussing the economic impacts of migration to the GCC by documenting perspectives from countries of origin and destination.  

Migration has been an integral part of the GCC economies ever since the discovery of their large deposits of minerals and natural gas in the second half of the 20th century. In fact, foreign labour and mineral exports constitute the backbone of economic development in all GCC countries and are the primary contributors to the rapid increase in their standards of living. Table 1 shows that during the last 50 years, the total population of the GCC region has increased significantly as economic development reduced mortality rates and increased native life expectancies at birth. Also, due to the considerable increase in labour demand that could not be fulfilled by nationals, the stock of migrants in the GCC grew from about 20 per cent in the 70s to about 47 per cent in 2010. The development process experienced by the GCC countries was broadly initiated by relatively large public sectors, establishing the countries’ infrastructures, education and health systems, as well as their public administration bodies and judicial systems, into which most of the local workforce was recruited (see GIZ and ILO 2015). Shortly after, the GCC’s private and domestic sectors began growing at a rapid pace, providing job opportunities for the vast majority of migrant labour, which today mostly originates from the Indian subcontinent and East Asia followed by the Arab states and, to a lesser extent, the West. Recent estimates reveal that about 90 per cent workers employed in the GCC’s private sector occupations are migrants. 3 Due to the very high proportion of migrant labour in the private sector, most GCC governments have adopted, since the early 1990s, several policy measures to increase the competitiveness and employment of nationals, particularly in the private sector. Such policies include measures affecting locals’ expectations towards public employment through reducing implicit subsidies and enhancing private sector benefits, raising the quality of their human capital through educational reforms, and the offering of vocational training programmes. Related policies also include initiatives to raise the effective cost of hiring migrants, such as fees imposed on migrant employment, implementation of employment quotas for migrants and nationals, as well as completely nationalizing certain occupations. It is undeniable that many migrant workers in the GCC possess considerable stocks of human capital, entitling them to higher wages relative to what they would earn in their countries of origin, and thereby enabling them to send significant amounts of remittances to support their families back home (see Naufal and Genc 2014). Nonetheless, although migrants, particularly skilled workers from the Indian subcontinent and Asia, possess 4 higher average levels of productivity-related characteristics than local workers in the GCC, they are often faced with lower relative wages and lower levels of social protection. As shown in Table 3, there are sizeable observed wage gaps between the three major migrant groups, namely Asians, Arabs, and Westerners in all GCC countries. On average, Westerners earn the highest wages followed by Arabs and Asians, respectively. The highest gaps are generally observed in Bahrain, whereas the lowest are found in Oman. For example, in 2015, Westerners earned a 31 per cent wage premium over Asians in Bahrain and a 19.1 per cent premium in Oman. Also, Arabs enjoyed a premium of 25.8 percent over Asians in the former and a 10.2 percent premium in the latter.  These gaps in earnings could potentially be caused by many factors, including relative supply and demand for the alternative types of labour, differentials in workers’ productivity, unobserved abilities and degrees of assimilation, as well as discrimination. The lack of individual-level data in the region has largely contributed to the underexploration of this important phenomenon. There is considerable variation in the expenses incurred by migrant workers for securing positions in the GCC countries. The least skilled migrants tend to pay the most, in part due to the excess supply of low-skill jobs and limited access to alternative pathways for seeking work. On the other hand, employers frequently cover the cost of recruiting highly skilled workers, reflecting in contrast, an excess demand for such workers. A better appreciation of factors that contribute to raising or lowering migration expenses privately incurred by migrants would further help deliver insights that can shape programmes and policy making in this space. Applicants are invited to submit proposals addressing the various economic aspects of migration into GCC countries, highlighting the relevant perspectives from countries of 5 destination and origin. The workshop may include a few invited papers and suitable papers may be included in an edited volume. 

 




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Workshop

Directors


Ganesh

Seshan

Assistant Professor -
Edmund A. Walsh School of Foreign Service in Qatar, Georgetown University



Usamah

Alfarhan

Assistant Professor -
College of Economics and Finance, Sultan Qaboos University


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