Labour market performance and migration flows - European ...

European CommissionOccasional Paper 60, Volume IIntroductionThis report explores the relationship between labour market performance and emigrationflows in Arab Mediterranean Countries (AMCs). It examines recent labour marketconditions and the impact of labour market reforms on employment, unemployment, theinformal economy and migration flows. In a globalized world economy, workersperceive international migration as a channel to access overseas labour markets.Individuals choose, subject to certain constraints (such as those imposed by migrationpolicies), whether to participate in the domestic labour market or in an overseas labourmarket. Thus, conditions in domestic labour markets play a pivotal role in the decision tomigrate overseas. In turn, emigration can potentially affect national labour markets,though this reverse impact has been little studied.LiteratureLiterature on migration and development is vast, even if it is far from being a “burning issue of our time”(Hanson 2008). The interaction between migration and labour markets in countries of origin has excitedless interest: the economic analysis of the impact of migration on labour markets has tended to focus onhost countries. In contrast, the impact of migration flows on the working and performance of labourmarkets in countries of origin is less studied by researchers and national and international organizations.Policy-oriented research has focused to a large extent on EU and other developed countries’ labourmarkets, migration flows as such and the integration of incoming labour migrants. Only in the last fewyears has the magnitude of the labour market challenges in the countries of origin begun to attractresearch and policy-makers’ interest.Indeed, although the literature on labour markets in developing countries is very large, research onlabour markets in AMCs was limited until recently. The World Bank Report Unlocking theEmployment Potential of the Middle East and North African Towards a New Social Contract (WorldBank 2003) marked a surge in interest in these countries, and literature with a regional approach whichhas proliferated ever since. Of particular note is the series of FEMISE Country Profiles on AMCs witha major section on Human Resources and Labour Markets (FEMISE 2004-2005), and the studiesundertaken by the European Training Foundation on employment policy reform (ETF 2006),vocational training systems (ETF and World Bank 2005) and the transition from school to work (VanTrier 2007) in Southern and Eastern Mediterranean Countries. Arab Human Development Reports(UNDP 2002, 2003, 2005 and 2006) were another milestone, pointing to a lack of participation ofwomen and a deficit in knowledge and education (together with bad governance) as two of the mainobstacles to development in Arab States. But once a general overview and assessment of the challengehas been made, it is fair to acknowledge that little progress has been made in the literature, to a largeextent due to the lack of reliable and exhaustive data.The same is true for migration in AMCs, where in a few years we have evolved from a no-man’sland to seeing the emergence of a series of specialized research centres, such as CARIM (Consortiumfor Applied Research in International Migration) and a boom in literature (see Schramm 2006). Thislate emergence of a literature on migration in the region is most remarkable, since, in fact, the regionis more globally integrated through labour mobility than through investments and trade. According tothe World Bank, the MENA Region accounts for some 3% of the world’s GDP, receives just over 1%of global direct investment and accounts for some 5% of global trade flows. In contrast, the region is amajor player in the international movement of people: some 10% of the world’s remittance inflows aredirected to MENA countries.24