Labour market performance and migration flows - European ...

European CommissionOccasional Paper 60, Volume IJordan gives a telling case study in the labour market impact of migration flows, as – according toChatelard (2004) – Jordanian economic development is closely intertwined with the prevailingdynamics of international labour mobility. This was particularly true in the 1980s, when anestimated 42 percent of the labour force was expatriated, and such a massive outflow led to asubstantial decline in unemployment. When, in the early 1990s, a large number of Jordanians wererepatriated because of the Gulf War, the country experienced a 10 percent increase in itspopulation, causing heavy pressure on infrastructure, public services and housing, and theunemployment rate climbed as high as 30 percent (De Bel Air, 2008).By the same token, international migration has always been an essential route of escape for excesslabour supply among Palestinians: restrictions on entry to the Israeli labour market after thebeginning of the second Intifada created a sharp rise in unemployment, which increased from 13 to29 percent between 1999 and 2006 (Hilal, 2007).As far as the large countries of the Arab Mediterranean area are concerned, Ramamurthy (2003)finds that Egypt is the only one in his sample where emigration has had a significant effect onemployment. Nassar (2005) argues that – notwithstanding data limitations and despite the fact thatthe best workers, and not the unemployed, are those who migrate – the direct impact of migrationon the Egyptian labour market can be gauged from events during the Gulf crisis, when Iraq andKuwait closed their borders, and many Egyptians were repatriated. 84The effects of migration on labour markets need not be confined to the areas of origin of themigrants, as international migration is strictly linked to the internal movement of peoples: it ofteninduces the internal relocation of labour forces. For instance, de Haas (2007) shows how migrantsending areas in Morocco became destinations for many internal migrants from other villages orfrom poorer regions; Berriane (1996) and El Meskine (1993), quoted in de Haas (2007), observesthat many construction and agricultural workers in the Rif area come from the Tafilalt and Draavalley in Southern Morocco.The figures about the aggregate size of migration – both in terms of flows and stocks – out ofAMCs needs to be handled with caution as the most widely-used datasets – such as Docquier andMarfouk (2005) – are based on immigration statistics that do not cover the Gulf countries, asrecalled in Section 5. With this caveat in mind, Table 6.1 reveals that past and current migrationpatterns have an uneven impact on the main educational groups, as better-educated migrants areoverrepresented in the migrant population. While the emigrant population of these eight countriesis characterized by a varying skill profile, 85 as the data columns on selection rates show, the rate ofemigration from each of these countries is increasing in skill level. Lebanon, Morocco 86 and – to alesser extent – Tunisia are characterized by a rate of emigration among tertiary-educatedindividuals which might raise some concerns concerning a sizeable brain drain, that could push upthe skill premium in the labour–earnings distribution (see also section 1.2 on this). Indeed, Adams(2003) argues that Morocco and Tunisia suffer from a drain of their talented workers, though it isfair to say that the drain of skilled workers does not rank high among the factors that hinder theeconomic development in the AMCs countries – particularly in the larger Maghreb countries – as itis limited in size when compared to other developing regions, such as Sub-Saharan Africa (Ozden,2006).84 Similarly, Nassar (2008) argues that there have been clear benefits from emigration in terms of unemployment reductionin the 1980s, when Gulf countries attracted a large part of the Egyptian excess labour supply.85 The disproportionately high share of low-skilled individuals in the migrant population of the Maghreb countries – Algeria,Morocco and Tunisia – can be traced back to the existance of well-established migration networks with the countries ofdestination, which, as the recent paper by Beine et al. (2008a) shows, are associated with a reduction in the selection rate ofthe migrant population.86 In Morocco – together with Egypt and Jordan – the rate of return to education remains low (World Bank, 2008),notwithstaning the reported migration rate of tertiary-educated workers which could have pushed up skilled wages.128