Labour market performance and migration flows - European ...

Chapter IFinal Reportunemployment and the spread of the informal economy have delinked wage levels from the level ofmigration or the transfers of remittances: adjustments in the labour markets are made through the rateof unemployment rather than wages.In contrast, there seems to be an evident impact of either remittances (actual household income) orthe prospect to migrate (expected or potential personal income) on reservation wages of certaincategories of workers. This is most visible for graduates in Lebanon, but to a lesser extent in Jordan, inMorocco and possibly in Egypt too. This might contribute to the high level of graduate unemploymentin the region.An interesting approach in order to better understand the relationship between remittances andlabour market performance would be to bring the analysis to the sub-regional level, but this is wellbeyond the scope of this Study.5.4 Impact on Informal EmploymentWhether migration has any impact on the informal economy is difficult to measure. In the 1970s and1980s, the maintenance in most AMCs of multiple exchange rates and restrictions on business access tohard currency encouraged the illegal entrance of remittances at the black market rate, where migrantworkers could obtain a substantial gain for their foreign currency over the official rate of exchange onthe open market. However, by the late 1980s, exchange rate reforms corrected this misalignment andbrought remittances in through official channels. Those notwithstanding, all surveys indicate that thetransmission of remittances through personal or unregistered channels is still very important.In any case, it is obvious that the difficulties in controlling the flows of remittances and the private(often household) nature of these sums tend to facilitate their dissemination into the informal sector ofthe economy, feeding informal employment and the informal economy at large. Another aspect to beconsidered (and one that is very evident in Morocco, for instance), is the feeding of parallel economiccircuits through the physical imports of consumption and equipment goods or the transfers in kindsmade by the migrants themselves. But the quantification of this effect would require surveys on theground, and so far no survey of this kind has been carried out in AMCs.5.5 Impact of Return MigrationMuch attention is being paid in the last few years to return migration. It is depicted as one of the mainchannels through which migration can benefit countries of origin. Indeed, the impact of return migrationon development has been extensively researched in terms of financial, human and social capitalresources. In contrast, its effects on national labour markets have received less attention, in particular asfar as the profile of returning migrants is concerned.Migrants can acquire higher education or relevant on-the-job experiences when abroad and thenemploy these fruitfully upon return. The influence on the supply side of the labour market is direct ifreturnees complete their migration experience while they are still within their working life. The positiveimpact of return migrants on the labour market is difficult to measure, and it will depend on a series ofconditions. One of them is that the return be voluntary and not forced, imposed by political or economiccircumstances that might lead to a collective return of national workers. Forced return of migrants (suchas happened after the first Gulf War in 1991 with migrants in the Gulf countries returning to Egypt,Jordan or Tunisia or as might be beginning to happen now as a consequence of the global economiccrisis) have a much less positive impact on labour markets in countries of origin, as any positive effect ofthis reverse brain drain is often offset by the increase of labour market pressures induced by their return.79