Labour market performance and migration flows - European ...

Chapter IIThe impact of migration on labour markets in Arab Mediterranean countriesTable 8.1. Return migration and entrepreneurial activitiesreturnees stayers t-test obs.Entrepreneurs in 1998, percent 20.73 5.18 11.88** 17,361Entrepreneurs in 2006, percent 27.37 8.38 11.68** 17,361Survival rate of entrepreneurialactivities, percent84.04 69.93 2.36* 923College graduates among entrepreneurs,percent12.51 8.12 0.97 923Enterprises established after 1980,percent86.89 64.66 4.23** 923Notes: entrepreneurs defined as individuals reporting to be either self-employed or employers, following McCormick andWahba (2001); ** and * denotes statistical significance at the 1 and 5 percent confidence level respectively.Source: authors’ elaboration on data from ELMPS (2006)As the data from the MIREM project shows, the relationship from return migration and theoccupational choice upon return depends on the employment status experienced in the countries ofdestination: the number of migrants from Morocco, Algeria and Tunisia who were self-employed inItaly was higher than the corresponding figure for migrants to France, who were less likely to optfor an entrepreneurial activity upon return, a choice that is also influenced by the on-the-jobtraining received abroad. Also levels of integration in the host country matter: the more integratedare generally the ones who benefit more from the migration experience in terms of savings, but – asevidenced by Hammouda (2008) for Algeria – they are less likely to come back to the origincountries.Clearly, also the economic and institutional environment which prevails at home matter, and theshare of returnees who carry out some productive investments upon return is substantially lower inAlgeria (17 percent) than in Morocco or Tunisia, where the corresponding share is above 40percent, in line with the arguments described in Section 9.1. They mainly invest in smallenterprises with less than 10 employees – with an ensuing limited job-creation effect. In line withthe arguments by Wahba and Zenou (2008), social capital plays a key role: about 80 percent ofinvestors report having received help from family of friends in the origin country. The sectorswhich attract most investments by returnees are: the wholesale and retail trade (36.0 percent),hotels and restaurants (17.9 percent), agriculture (17.5 percent), manufacturing (11.9 percent) andconstruction (16.3 percent). Trade is also the sector that attracts the majority of returnees from theGulf in Syria (Kawakibi, 2008).Sayre and Olmstead (1999) argue that returnees in Palestine after the Oslo accords invested mostlyin the service and construction sector, but also, to a lesser extent, in the infrastructures and in thelight manufacturing sector; the authors also observe that a large number of skilled migrants havebeen employed in the public administration sector and this led to an increase in inequality betweenfamilies with migration experience and the families without such an experience.9.3 Social remittances and investmentsAs far as investments are concerned, the single most relevant cultural effect of migration is probablythe development of a banking culture (Schramm, 2009), as a larger share of the population in migrantsendingcountries becomes familiar with financial services through remittance transfers. This, in turn,can create new opportunities to undertake productive investments.145