Labour market performance and migration flows - European ...

European CommissionOccasional Paper 60, Volume Iparticipation of their beneficiaries (often women). However, as Section 5.2 will show, the evidencecollected in AMCs does not always confirm those effects; so the Figure mainly provides a firstanalytical framework for further research into those effects.Two conclusions can be drawn from an overview of Figure 5.1.1. First, the more the migrationprocess extends through its different stages (from the prospect to migrate or the actual migration to thetransfer of remittances through return migration), the more positive the impact it has on labourmarkets. This highlights the interest of promoting return migration from the perspective of thecountries of origin. Second, the effects of migration on labour markets are complex and oftencontradictory, so it is not possible to draw any conclusion on its net balance. It depends very much onthe context and the characteristics of migration. This calls for a differentiated policy mix.Figure 5.1.1 Synthetic table of the effects of outward migration on labour marketsEffects on labour marketsSupply sideDemand sideFactor EndowmentsBehaviourConsumptionpatternsInvestments,entrepreneurialactivitiesMigration stagesProspect tomigrateActual migration(permanent;temporary)RemittancesReturn migrationLabour supply (L) - - - +Skills supply (H)(brain drain/gain)+ - + +Capital supply (K) = = + +Education (H)(skills acquisition)+ = + +Labourparticipation (L)- = - +Wages(reservation wages)+ + + +Labour demand - + + +Labour demand(K)- - + +Structure Informal employment = = + =L = Labour supply; K = Capital; H = Human CapitalAs far as empirical evidence in the literature is concerned, Jordan provides a good example of therelevance of the labour market impact of migration flows, as – according to Chatelard (2004) – Jordanianeconomic development is closely intertwined with the prevailing dynamics of international labourmobility. This was true in particular in the 1980s, when it was estimated that 42% of the labour force wasexpatriated, and that such a massive outflow of the labour force led to a substantial decline inunemployment. When, in the early 1990s, a large number of Jordanians were repatriated due to the firstGulf war, the country experienced a 10% increase in its population, putting great pressure oninfrastructures, public services and housing, and unemployment climbed up to 30% (De Bel-Air, 2008).By the same token, international migration has always been an essential route of escape for the excessPalestinian labour supply: the restriction on entry into the Israeli labour market after the beginning of the68