Labour market performance and migration flows - European ...

European CommissionOccasional Paper 60, Volume I4. Outward Labour Migration in Arab Mediterranean CountriesLabour migration has been an important source of employment in all Arab Mediterranean Countries overthe last four decades. Neither their societies, nor their economies, including their labour markets, can beunderstood without considering the impact of outward migration. There are more than 10 million AMCscitizens living in third countries (see Table 4.2.1, where the number of Jordanian and Syrian emigrants islargely underestimated, and Palestine has not been considered). This amounts to more than 8% of theirworking age population, with higher average levels of labour participation, employment andqualifications than those prevailing in the national labour markets.4.1 Outward Labour Migration in AMCs: Literature ReviewInterest in migration flows in Arab Mediterranean, Southern and Eastern Mediterranean or MENAcountries has grown considerably in the last few years. A series of specialized research centres have evenemerged, such as CARIM (Consortium for Applied Research in International Migration). So far theliterature has to a large extent focused on demographic aspects and migration flows (for a thoroughreview of literature on this topic, see Schramm 2006). For a comprehensive analysis of migration flows(outward, inward and transit migration) in 10 Southern and Eastern Mediterranean Countries (ArabMediterranean Countries object of the present Study plus Israel and Turkey), with detailed studies on thedemographic and economic, the legal and the social and political dimensions of migration in eachcountry, see the Mediterranean Migration 2006-2007 and 2008-2009 Reports (Fargues 2007 and 2009).CARIM has also published more than 200 papers on issues of relevance in this field, in particularcircular migration and irregular migration. In the last few years, inward labour migration to AMCs andinter-Arab migration have been subjects of growing interest as well.In the traditional approach to labour migration, wages and per capita national income, or moreprecisely their differentials, are considered as strong migration drivers. Since evidence from AMCsseems to confirm the value of this theory, it is worth quickly reviewing it. If young i is assumed toface a wage w 0 in his or her country of origin and a wage w 1 if he or she migrates (wage indestination country) and if C is the cost of international mobility – which can be assumed to befixed, proportional to wage or decreasing as the level of education increases – the migration ratewill equal the probability ofbeing positive (Chiquiar et Hanson 2002). So themigration rate is negatively correlated to average income in the country of origin and to thefinancial, human and social cost of mobility and positively correlated to average income in the hostcountry. In this way, the analysis of the development of income in AMCs (minimum wage, averagewage or per capita national income) and its comparison with that of the potential countries ofdestination (the EU eventually) provides information, in the first place, on the performance oflabour markets in AMCs, as well as on the factors determining the migration choice.However, the relation between income levels and migration flows is likely to be non linear, so thatfor a relatively poor sending country an increase in income will have a positive impact on thepropensity to migrate, even controlling for the income differential with the receiving country, but if thehome country is relatively better off, an increase in income may be associated with a fall in thepropensity to migrate (see Faini and Venturini 2008). Quite clearly, most AMCs have left behind thepoverty threshold where the financial constraint to migration does operate, but have not yet reached thehome bias threshold. This, combined with the increasing wage differential (see Section 2.3), leads to anincrease of migration pressures. Interestingly, beyond general surveys on the reasons for migration (seeSection 5.1) there is no systematic research on wages of AMC migrants to developed countries.56