Labour market performance and migration flows - European ...

Chapter IIThe impact of migration on labour markets in Arab Mediterranean countriesdestination represent a powerful push factor for return migration, which could lessen the role ofmigration in alleviating labour-market pressure in AMCs, and this push factor is most likely tobecome stronger if the current global economic crisis keeps the international price of oil at a lowlevel.The case of Syria represents a telling example of how the labour-market effects of return migrationdepend upon the countries of migrant destination. While Syrian migrants to the Gulf are youngprofessionals (see Section 6.2), most migrants to Lebanon are very low-skilled and cross the borderin search of a higher wage which they are able to find only in occupations that Lebanese workersare no longer willing to accept, so that – as Kawakibi (2008) argues – a massive return of Syriansfrom Lebanon could produce extremely negative effects in the Syrian labour market.6.4 Remittances and labour forceMigrants’ remittances represent one of the most important revenue items in the Balance of Paymentsof AMCs, so they can produce far-reaching direct effects on the recipient households, and producerelevant macroeconomic effects. 102 Middle East and North Africa is the region which received thehighest level of remittances per capita over the 1998-2002 period (Straubhaar and Vadean, 2005),while it is the second region – behind South Asia – as far as the share of remittances over GDP isconcerned (Maimbo and Ratha, 2005). Remittances amount to 22 percent of GDP in Jordan, 14percent in Lebanon, 8 percent in Morocco and 5 percent in Egypt (Crom, 2009). Furthermore, Adams(2006b) evidences that remittances to the Middle East and North African countries grew steadily overthe 1990-2004 period, and the well-known problems with the reliability of Balance of Paymentsfigures on remittances are unlikely to explain the observed trend. 103Although the educational systems in most AMCs impose limited direct costs upon students and theirfamilies (Akkari, 2004; Vosseynstein, 2004), indirect costs can be substantial, and the positiveincome effect due to remittances can help households afford them, thus raising the educationalachievement of young members in recipient households. Tables 6.1 and 6.2 show that – as far as theMaghreb countries are concerned – the vast majority of current migrants have a low levels ofeducation, so – as low levels of education tend to be transferred across generations (Galor and Zeira,1993) – remittances can give an opportunity to break this poverty trap, raising the level of educationof young family members over and above the levels of the migrants. Indeed, Table 8.1 below revealsthat school fees represent the second or third most relevant use of remittances in recipient householdsin all the seven AMCs surveyed by EIB (2006). There are a number of studies – such as Berriane(1996), Bencherifa (1996) and de Haas (2003), quoted in de Haas (2007) – which argue thatremittances to Morocco contribute to an increase in expenditures in education which benefits youngpupils of both sexes.As van Dalen et al. (2005) show, the transfer of migrants’ remittances increases the propensity tomigrate among Egyptian recipients, and this increases the sensitivity of their educational decisions toforeign rather than to domestic labour-market factors. Still, as the arguments presented in section 1.1suggests, this need not improve the incentives to invest in education. Remittances can be used todirectly finance the migration cost of a young family member rather than to provide him or her with abetter education. Such an adverse effect on human capital formation can be increased by observingthat parental absence due to migration increases the chances that a child is engaged in an economic102 The macro-economic role of remittances as a critical source of foreign currency holdings in the Mediterranean countriesis emphasized by Escribano (2002). For Morocco, Al Ali (2003) argues that “remittances have become more and morecrucial to the equilibrium of the national trade balance. The crucial economic role played by migrants' remittances renders thepermanence of Moroccans abroad essential not only for the survival of individual households but also for the viability of thenational economy”.103 The current global economic crisis is expected to reverse this trend, with remittances to Middle East and North Africancountries predicted to fall by a cumulative 6 percent over 2009 and 2010 (Ratha and Mohapatra, 2009).135