UNIVERSITY OF MUMBAI

PROJECT ON
LABOUR MIGRATION FROM DEVELOPING COUNTRY
TO DEVELOPED COUNTRY.
SUBMITTED BY
MADHURI JADHAV
ROLL NO.: 29
ADVANCED ACCOUNTANCY PART 1
ECONOMICS OF GLOBAL TRADE AND FINANCE
IN PARTIAL FULLFILLMENT OF THE DEGREE OF
MASTER OF COMMERCE
2015-16
UNDER THE GUIDENCE OF
PROF. KALPANA NAYAR
VIDYA PRASARAK MANDAL, THANE
K.G.JOSHI COLLEGE OF ARTS &
N.G. BEDEKAR COLLEGE OF COMMERECE
CHENDANI BUNDER ROAD, THANE-400601

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Declaration
I, student of M.Com. (Part - I) Roll No. : 29 hereby declare that the
project title LABOUR MIGRATION FROM DEVELOPED COUNTRY TO

DEVELOPING COUNTRY submitted by me for semester - II of the academic year

2015-16, is based on actual work carried out by me under the guidance and supervision of
PROF. kalpana nayar . I further state that this work is original and not submitted anywhere
else for any examination.

PLACE

MADHURI JADHAV
ROLL NO: 29

DATE

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ACKNOWLEDGEMENT
It is indeed a great pleasure and proud privilege to present this project work.

I take this opportunity to express my gratitude and acknowledge to all the individuals
involved both directly and indirectly for their valuable help and guidance.

This project has been an attempt to give information about the LABOUR

MIGRATION FROM DEVELOPED COUNTRY TO DEVELOPING

COUNTRY.

I expressed my deep since of gratitude to founder and president of VidyaPrasarakMandal. I

express my heartful thanks to our honorable Principal for her constant support and
motivation.

I express special thanks to my guide Prof. KALPANA NAYAR under whose guidence the
project conceived , planned and executed.

I would also like to thank the college library and its staff for patiently listening and guiding
me. I would like to thank my family also.

Thank You.

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Index

Chapter Subchapter
no
1

Particulars

Page
no

1.1

Introduction

1.2

The Demographic Deficit And Consequent

Demand For Migrant Labour In

Destination Countries

1.3

Relation between trade and migration

10

1.4

Diversity of migration

12

1.5

Migration of women

14

2.1

Temporary migration

16

2.2

Irregular migration

19

2.3

Impact on receiving country

21

2.4

Impact on sending country

23

2.5

Migration of highly skilled worker

24

3.1

Skilled labour migration from developing

country Argentina

26

3.2

Literature review

28

4.1

Conclusion

30

4.2

Bibliography

32
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Chapter 1
1.1 Introduction
From 1970 to 2005, the stock of international migrants in the world increased from
nearly 82 million to just over 190 million, according to United Nations (UN) estimates.1 In
the same period the volume of global exports expanded more than sevenfold while foreign
direct investment, measured in U.S. dol- lars, grew to more than one hundred times the 1970
level by 2000.2 Although international migration has come to attract a great deal of attention
during the recent decades of globalization, the expansion in the international movement of
people has lagged far behind those of commodities and capital. Indeed, as a fraction of world
population, the stock of migrants rose only slightly, from 2.5 percent in 1960 to 2.9 percent
by 2005. And that modest increase was due in part to the dissolution of the former Soviet
Union, which redefined large num- bers of internal migrants as international migrants
although they did not cross a border in the interim.
The dominant restraint on international migration is surely a reluctance to relocate,
despite widening income gaps between the poorest and wealthiest na- tions. Most people
would simply rather stay home, though many are impelled to migrate by the failure of
employment to keep pace with the labor force or the lack of security in their home countries.
Leaving out the newly defined migrants created by the dissolution of the for- mer
Soviet Union, about 56 percent of the worlds international migrants were in the More
Developed Regions (according to UN definitions) in 2000. This followed a steady increase
from 40 percent in 1960. However, a large portion of migrants in the More Developed
Regions are from other high-income countries. For instance, almost exactly half of the stock
of migrants in the Organisation for Economic Co-operation and Development (OECD)
member states in 2000 were from other OECD states; more than a third of all migrants came
from OECD members other than Mexico and Turkey.
Any perception that migration is synonymous with immigration needs to be
dispelled. Though we lack precise measures on circular migration, a large portion of
international migrants return home. This is not only true of those who enter on a temporary
visa; significant fractions of settlers subsequently depart. Some leave because they have
accumulated sufficient savings and wish to enjoy them among kith and kin in the old
country, perhaps on retirement. Some no doubt leave having become disillusioned with their
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experience in the new country or because their circumstances have changed. But the world
has also witnessed a growth in the use of temporary migration schemes of various kinds. The
number of people becoming permanent residents in the United States has been on a broad
upward trend since the time of the Great Depression. However in the last quarter century, the
rise in the number of temporary workers and their families, students, and such categories as
Treaty Traders and Intracompany
Transferees has clearly been far greater, at least until the events of 2001.
Population movements are, of course, not necessarily conterminous with labor
movements across borders. In most contexts the majority of migrants enter under family
reunification schemes. More than 60 percent of immigrant visas issued by the United States
and by Canada were on a family basis during the 1990s. (In contrast, however, only the very
highly skilled are permitted to bring their families to the Persian Gulf states). In addition,
students represent one of the most rapidly expanding categories of international migrants.
North American universities have long served as magnets for foreign students. In ad- dition,
the enrollment of non-OECD students in EU universities increased by about 55 percent
during the 1990s, and less traditional destinations such as Japan have begun to attract
substantial numbers of overseas students. Moreover, at the end of 2004 there were about
13.5 million refugees recognized by the Office of the United Nations High Commissioner for
Refugees, representing just over 7 percent of the global stock of migrants.
The rubric under which migrants enter is thus varied. Yet no matter under which
program migrants arrive, it is common to work. The labor force par- ticipation rates of those
entering for family reunification can be high. In many countries foreign students work while
studying; in some contexts a student visa is indeed a thinly disguised device to access cheap
labor, and the propensity of overseas students to remain for subsequent employment is
frequently high (es- pecially from lower-income countries). Refugees resettled in the higherincome countries certainly participate in the labor force. Though among those seeking
asylum, the right to work remains a matter of dispute in a number of countries. But the vast
majority of refugees remain in neighboring developing countries, some are in camps, others
are scattered geographically; and their sources of livelihood are major concerns (Young et al.
2005).

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1.2 The Demographic Deficit And Consequent Demand

For Migrant Labour In Destination Countries
Just as the nineteenth century was marked by migration from densely populated
europe to more lightly populated america and oceania, another change in pop- ulation density
may be expected in the first half of the twenty-first century. The population of the worlds
less developed regions is increasing much more rapidly (at an annual rate of 1.5 per cent)
than that of the more developed regions (which is rising by just 0.25 per cent annually). This
difference is expected to continue until around 2050 (unPD, 2003).
There is also a difference between the average age of the population in more
developed countries and less developed countries, with the former having ageing populations
and the latter more youthful ones. although life expectancies are increasing and populations
are ageing to some extent almost everywhere, the process has gone much further in europe
and Japan, where fertility is so low that deaths exceed births. figure 1.3 shows predicted
world population trends by region up to 2050. The populations of africa and asia (excluding
china and Japan) are expected to rise.
If present trends continue, the population of Italy, for example, is projected to drop by
22 per cent between 2000 and 2050, that of latvia by 44 per cent and that of estonia by 52 per
cent (unPD, 2003). The combination of low fertility and rising life expectancy means that the
proportion of the population above 65 years of age will rise from 15 to 28 per cent between
2000 and 2050 in europe as a whole and from 17 to 36 per cent in Japan.
A communication from the european commission, Confronting demo- graphic
change, highlights the following trends for the eu: continued increase in life expectancy;
continued growth in numbers above age 60; continuing low birth rates; fertility below
replacement level; more older workers (aged 5564), elderly people (6579) and very elderly
people (80+); and a rising demographic depend- ency ratio (european commission, 2005c).
The dependency ratio is predicted to double, reaching 51 per cent by 2050, which means that
the eu will change from having four persons of working age for each citizen aged 65 and
above to only two persons (european commission, 2006).
If immigration were the only means of maintaining current labour forces, immigration
rates would need to be much higher (unPD, 2000, table 1, p. 2). The big four eu countries
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france, Germany, Italy and the united Kingdom account for two-thirds of the total eu
population and 88 per cent of immigrants in the eu. to maintain these countries populations
constant at 1995 levels in 2050, given current fertility rates, immigration levels would have to
triple, from 237,000 to 677,000 a year. However, to maintain their 1995 workforces up to
2050, these countries combined would have to accept 1.1 million immigrants a year. finally,
to save social security systems by keeping stable the ratio between people of working age
(1864 years) and people of retirement age (65 and older), these four countries would have to
increase annual immigration to almost 9 million people (unPD, 2000). Such conclusions have
given rise to much controversy.
First, immigration on this scale is very unlikely to be politically acceptable. Second,
new immigrants may eventually acquire similar demographic patterns (low fertility, ageing)
to the current eu population. Third, destination countries are hardly in a position to meet the
challenges of integrating such large inflows within a relatively short period of time. While
critics of large-scale immigration have pointed out a number of other options to meet the
demographic challenge, there is no doubt that immigration at some level will have to make an
important contribution. This has been recognized in the european commissions policy plan
on legal migration (european commission, 2005a).
There is therefore a strong demand for migrant workers in many destina- tion
countries, a fact which has often been neglected in discussions of the driving forces behind
international migration. However, in europe at least, this demand is gaining some recognition.
as the european commission policy plan on legal migration clearly expressed it.

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1.3 Relationship Between Trade and Migration

There are both direct and indirect links between trade and migration. The interchange of professionals and other skilled workers among countries is a direct and
necessary concomitance to merchandise trade and foreign direct investment. Mode 4 of the
General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO)
provides a formal codification for the movement of persons to deliver services in another
country. To date, agreements under this provision have been restricted almost entirely to the
migration of highly-skilled and professional service providers. The movement of
professionals between the developing and industrialized regions is predominantly one way:
from the developing countries. The industrialized nations have been more reluctant to admit
low-skilled workers through trade agreements, notwithstanding the ten- dency of some of
these nations to turn a blind eye to irregular migrations.
More indirectly, the globalization of trade could serve to diminish income gaps and
hence diminish migration pressures. Are trade and migration thus substitutes? This remains
an area of dispute. To the extent that southnorth trade is shaped by an abundance of lowskilled workers in the south and by capital and skills in the north, freer trade ought eventually
to narrow the gaps in low-skilled workers earnings, reducing the need to migrate. On the
other hand, if the agglomeration of highly-skilled persons in the industrialized coun- tries
serves to make each such person more productive, then increased trade can exacerbate the
pressures for a brain drain, even in the long run. Perhaps far more importantly, the short-term
impacts of sudden trade liberalization can go either way, for workers across a range of skills.
For example, a country whose agricultural exports increase may face rising prices of food at
home under lib- eralization; that serves to undermine real wages. By contrast, increased
imports of less expensive agricultural goods may lower incomes for small-scale farmers.
Combined with macro-economic mismanagement and population growth, trade liberalization
in Mexico may well have exacerbated the exodus to the United States, at least in the short
term (Hanson 2006). More generally, liberalization associated with stabilization and
structural adjustment programs in the devel- oping countries following the debt crises of the
1980s, financial crises of the 1990s, and transition in formerly socialist countries have
initially undermined incomes at homeagain adding to the pressures to move overseas.
Meanwhile, some aspects of trade protection in the north have probably exacerbated
migration pressures. It is an irony of the public policy in many of the industrialized countries
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that subsidies and protection to low-skilled ac- tivities, notably agriculture, stimulate
precisely those sectors providing much of the employment to irregular migrants. Whether the
ubiquitous protection of agriculture in the industrialized states harms living standards in the
developing world, thus contributing even further to migration pressures, is more ambigu- ous.
Net food importers tend to gain from these agricultural subsidies of the north as do foodexporting developing countries with privileged export access to European markets. Protection
of certain crops, such as cotton in the United States, has most certainly harmed living
standards among some of the cotton exporters of Africa. There exists little or no coherence
between the trade and migration policies adopted by the higher-income countries. These two
sets of issues are the realms of separate ministries, which typically fail to coordinate, despite
the obvious links between their concerns.
Trade policies of both countries of origin and destination impact migra- tion
outcomes. But migration also shapes trade flows. The role of information provided by
migrants in stimulating trade has already been noted. In addi- tion, the growing circular
migration of scientists and engineers, both among the countries of the north and between the
developing and industrialized regions, is a contributing factor in diffusing and shifting
technological superiority and hence reshaping trade patterns (Saxenian 1999).

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1.4 Diversity of migration

There are many ways of distinguishing different groups of migrant workers, based on
motivation for migrating, skills, age, sector, occupation and distance from origin. The
distinctions most commonly used are based on anticipated duration of stay, reflecting the fact
that control over who enters a country and how long they stay is a core aspect of national
sovereignty. on this basis, the admission of migrant workers falls into two broad categories:

Permanent migration, referring to admission of workers falling under different

immigration categories (i.e. family reunification, highly skilled) for an indefi- nite
period of stay, that is, a stay without a time limit imposed by the destina- tion country.

Temporary migration, referring to admission of workers (sometimes referred to as

guest workers) for a specified time period, either to fill year-round, sea- sonal or
project-tied jobs, or as trainees and service providers under Mode 4 (Movement of
natural Persons) of the GatS.

Migrant workers may also be classified according to skill levels. although migrants from
developing countries work in almost every job type, they tend to be concentrated at the
bottom and top of the employment ladder. The majority are at the bottom of the ladder in
low-wage and low-skilled jobs that tend to remain migrant jobs. They work in agriculture,
mining, construction and a variety of service areas, such as hotels and catering, restaurants
and domestic work. Women are strongly represented in these low-paid service jobs, and
many women now migrate on their own to take on such work.
At the other end of the scale are millions of professional workers, both women and men,
who travel to other countries in search of higher wages or greater opportunities. an important
part of this flow consists of professionals and managers who move within the internal labour
markets of transnational corpor- ations in the course of expanding trade or fDI. These socalled intra-company transferees have become a ubiquitous presence in the more dynamic
regions of the world, where they are the purveyors of new production techniques and
managerial know-how.

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Three out of every four transferees move from one rich country to another, especially
across the atlantic, while most of the remainder move among the more successful newly
industrializing countries in east asia and South america. In addition to movements within
these internal markets, there are larger movements of highly skilled labour in various
occupations, including Ict, medicine, teaching, sea and air navigation, journalism and
communications, and entertainment. unlike their lower-skilled counterparts, highly skilled
immigrants are wel- comed by many high-income countries. australia and canada, for
example, have points systems that make it easier for professionals from developing countries
to enter for purposes of employment.
The united States also makes it relatively easy for professionals to enter with temporary
visas if an employer requests them. During the 1990s, many developed countries recruited
foreign health profes- sionals. consequently, nearly one-third of doctors and 13 per cent of
nurses now in the united Kingdom are foreign born, and half of the additional staff employed
by its national Health Service (nHS) over the past decade qualified abroad (WcSDG, 2004).
although the proportion of migrants in the populations of developed countries steadily
increased from 1960 to 2005, the proportion of the highly educated workforce represented by
migrants grew even more. Thus, the average annual rate of growth of the stock of migrants
was 2.4 per cent in 1965,
2.2 per cent in 1975, 2.3 per cent in 1985, 2.9 per cent in 1995 and 3.0 per cent in 2005
(unPD, 2009). The number of highly educated emigrants from developing countries residing
in oecD countries doubled from 1990 to 2000, whereas the number of developing country
emigrants with only a primary education increased by only about 50 per cent (Docquier and
Marfouk, 2005). as will be shown in the next section, women are over-represented in this
brain drain.
Despite this upward trend in skilled migration, contemporary migration flows remain
dominated by workers moving to fill low-skilled jobs in segments of the labour market
vacated by native workers who move on to better jobs. It should be pointed out, however, that
this phenomenon is not uniform across regions; in the oecD countries in particular, there has
recently been an increase in skilled migrant workers.

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1.5 Migration of women

Global migration rates for women have remained high since the 1960s, both in terms
of the total number of women migrants and in terms of their share of the worlds migrant
stock (Zlotnik, 2002). as shown in table 1.4, in developed regions women migrants, estimated
at 51.6 per cent of all migrants in 2010, outnumber their male counterparts. latin america and
the caribbean, and the countries of the former uSSr, have shown much higher increases in the
proportion of women among their migrant populations than other regions. There has been a
slight decline in the developing world, however, from 45.4 per cent women in 1960 to an
estimated 44.6 per cent in 2010.
While the proportion of women in the migrant stock has remained high throughout the
last few decades, these statistics do not capture the changing nature and circumstances of
their migration. Whereas in the past most women migrated as family members, an increasing
number are now migrating independ- ently from male relatives. Thus, for example, in
Germany the labour market par- ticipation rate of women migrants has significantly risen.
There are a number of reasons why the gender composition of migration has shifted in
this way. for one thing, ageing populations in the more developed desti- nation countries have
increased demand for care work, most of which continues to be carried out by women. The
rising prosperity of some of the more rapidly devel- oping countries is a second contributing
factor. In countries such as chile and Malaysia, for example, families increasingly can afford
to employ foreign domestic workers, and the great majority of these are women.
This trend of increasing proportions of women migrants is most evident in asia, where
hundreds of thousands of women in both low-skilled and skilled occupations emigrate each
year. recent statistics show that the main origin coun- tries are Indonesia, the Philippines, Sri
lanka and Thailand, and the main desti- nation countries and regions are Hong Kong (china),
Malaysia, the Middle east and Singapore. In the Philippines in 2006 women received over 60
per cent of all overseas work contracts (Poea, 2006). although in the following years women
have received slightly less than 50 per cent of all overseas work contracts, they still make up
a sizeable proportion of new appointments: for 2007 and 2008, women received 48 per cent
of all overseas work contracts (Poea, 2008).
Similarly, in 2008 provisional data revealed that women formed 48.9 per cent of the
total Sri lankan migrant population (Sri lanka bureau of foreign employment, 2008).
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Moreover, women are over-represented in the brain drain trends described in the
previous section. The average emigration rate of university-educated women is 17.6 per cent,
as compared to 13.1 per cent for men, in spite of the fact that women still face unequal access
to university education in many less developed countries (Dumont et al., 2007). In almost all
oecD countries, the share of women in the skilled migrant population increased between 1990
and 2000. The growth rates for skilled women migrants are larger than the growth rates for
either low-skilled women or skilled men for the vast majority of source regions. This is
particularly true in least developed countries. The primary factor in the feminization of the
Southnorth brain drain is the supply of education for girls and women (Docquier et al.,
2007). In short, not only are there greater proportions of women migrants than before, there
are greater proportions of highly skilled women migrants than before.

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CHAPTER 2
2.1 TEMPORARY MIGRATION
The increasing proliferation of temporary migration programmes, in contrast to the
settler migrations observed in earlier decades, is another recent development. The difference
between permanent and temporary migrant admission schemes has been noted above. Thus, a
rough distinction can be made between relatively open government policies, which allow for
the possibility of settlement in the destina- tion country, perhaps after a certain period of
temporary work, and more closed temporary labour migration schemes, which have the clear
objective of return to the origin country after the specified period (oSce, IoM and Ilo, 2006).
Seasonal labour migration, the most common form of temporary labour migra- tion, is
usually handled through the latter approach. a seasonal worker is com- monly understood as
a migrant worker whose work by its character is dependent on seasonal conditions and is
performed only during part of the year,1 typically for between three and nine months. The
Ilo International labour Migration (IlM) Survey, conducted in 2003 among the member States
of the Ilo (see Ilo,2004d), reveals that it is mostly higher-income countries that operate
seasonal worker programmes (abella, 2006). temporary migration programmes have taken a
variety of different forms, according to the modalities of entry and the selection and skills of
eligible appli- cants; these range from mechanisms for the supply of seasonal workers and
con- tract workers in low-skilled occupations to temporary skilled migration schemes, trainee
programmes, working holidays for young people and intra-company transfers.
The number of workers admitted under temporary schemes has risen mark- edly, with
countries such as australia, canada and the united States trad- itionally settler countries
increasing admissions under temporary schemes. for example, 295,000 temporary workers
entered the united States in 2006 (oecD, 2009a), compared to 208,100 in 1997 (oecD, 2007a).
There are several other reasons why temporary and circular labour migra- tion
programmes have become more popular.2 They are believed to be beneficial for all parties
involved, that is, for countries of both destination and origin, as well as for migrant workers
themselves (vertovec, 2007; Wickramasekara, 2003). This is because temporary labour
migration can enable destination countries to meet labour shortages and thereby increase their
capacity to compete in the glo- balized economy, while avoiding some of the difficulties
arising out of permanent migration. In addition, the temporary admission of migrant workers
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tends to be more readily accepted by citizens in developed countries, who may feel threatened by rising migration inflows. at the same time, origin countries can benefit from the
transfer of remittances and from the knowledge and skills gained from returning migrants.
Migrant workers themselves can counterbalance periods of unemployment, adverse working
conditions and low income in their home countries. They can further benefit from training
and professional advancement. gained in the destination country. Thus, the first Global forum
on Migration and Development held in 2007 claims in its conclusions to have enabled a shift
of the migration and development paradigm by promoting legal migration as an op- portunity
for development of both origin and destination countries, rather than as a threat. It further
stated: Temporary labor migration can be a flexible way of meeting labor surplus and
shortage across countries. assuring legal access to a varied labor market, protecting the basic
rights of migrants, especially women, and assuring temporariness of the migration are key to
maximizing the mutual benefits of such migration (GfMD, 2007, p. 6, emphasis in original).
Some destination countries have limited access for temporary migrant workers to
specific origin countries with which they have entered into bilateral agreements, such as
canada in the case of Mexican workers, commonwealth caribbean States in the case of
Guatemalan workers, and Germany in the case of workers from central and eastern europe
(oSce, IoM and Ilo, 2006). for example, in 2003 Germany admitted 318,549 temporary
workers from central and eastern europe to work in agriculture and forestry and in the hotel
and res- taurant industry for periods of up to four months (German federal Ministry of the
Interior, 2005).
Apart from such seasonal work schemes, some countries have established temporary
labour migration programmes to channel migrant workers into specific sectors. for example,
the united Kingdoms former Sectors based Scheme, intro- duced in 2003, reserved a quota of
3,500 places for migrant workers in the food manufacturing sector in 200506 (oSce, IoM
and Ilo, 2006). In canada, Germany, the netherlands, norway and Spain, among other
countries, the con- struction industry is an important sector that operates specific temporary
labour migration schemes. These often set restrictions, similar to those established for
seasonal workers, that prohibit switching to a different work permit scheme and bringing
family members to the country. The united Kingdoms Sectors based Scheme stipulated an
obligatory return after fulfilment of the temporary work contract, as well as the application of
labour market tests.

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From the point of view of migrant workers, there are real disadvantages associated
with these circular or temporary migration programmes. In practice, their potential benefits
are often eroded by insufficient regard to the protection of migrant workers rights, resulting
in their exploitation. temporary migrant workers often find it difficult to change their
employers or jobs; this makes them overly dependent on their initial employers and places
them in a vulnerable pos- ition (ruhs, 2006).

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2.2 Irregular migration

The Ilo has not formally defined irregular migration, or migrant workers in irregular
status, in its migrant worker instruments. the Migrant Workers (Supplementary Provisions)
convention, 1975 (no. 143) the first international instrument to deal with the issue of
migration in abusive conditions uses the terms clandestine to refer to irregular migratory
movements and illegal to refer to undocumented employment. Significantly, however, it
does not use the term illegal to refer to migrant workers themselves.3 Similarly, the un
instru- ment pertaining to migrant workers and their families, the 1990 International
convention on the Protection of the rights of all Migrant Workers and Members of Their
families, considers migrant workers as documented or in a regular situ- ation if they are
authorized to enter, stay and work pursuant to the law of the des- tination country and
international agreements to which it is a party. It considers migrant workers as undocumented
or in an irregular situation if they do not comply with those conditions.
The terms irregular migration and migrant workers in irregular status are the
preferred terms increasingly accepted by the Ilo and other international organizations. other
terms commonly used to describe irregular migration either are not comprehensive enough to
capture different aspects of irregular move- ments or have overly negative implications
(Wickramasekara, 2002). for example, undocumented does not cover all cases of
irregularity, because some migrants may enter a country with valid documentation, but later
become irregular by violating the conditions under which they entered. clandestine
migration has undertones of suspicious, covert or secret movement, and should be avoided
because it could seem to be associated with criminality. Illegal is a negative term in that it
ignores both the contributions made by the migrant workers to the desti- nation countrys
economy and the illegal conduct of others, such as employers who may knowingly employ
migrants in irregular status, traffickers, corrupt bureau- crats, and fraudulent recruitment
agencies and labour brokers. Irregularity may not always be a matter of choice for migrant
workers. Indeed, they may have been forced into irregular situations by traffickers and
recruitment agents.
Irreg ularities in migration can occur at ever y stage of the migration process predeparture, transit, destination and return. Irregular migration can range from simple
unauthorized border crossings for work to forced labour through trafficking and smuggling of
human beings. Its very nature makes it extremely difficult, if not impossible, to find accurate
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data on irregular migration. The enormous range of figures produced by those who have
attempted to estimate the numbers involved itself indicates the unreliability of these figures.
In europe, for example, estimates of the migrant population in irregular status vary from 3
million to 8 million (lupini, 2006). at a global level, the same degree of inaccu- racy exists.
Therefore, all estimates in this area must be considered with extreme caution.
With this caution in mind, some statistical estimates will be mentioned here
nevertheless. The International organization for Migration (IoM) recorded that more than
27,000 migrants in irregular status arrived in the canary Islands in Spain between January and
october 2006 alone. During the same period, lampedusa in Italy received more than 17,000
migrants in irregular status. It is estimated that the united Kingdom is host to about 500,000
migrants in irregular status (clanDeStIno, 200709). there are high estimates for regions
outside europe as well. the interior ministry of the russian federation, for instance, estimated
that in September 2003 there were 5 million foreigners in the country whose legal status was
unclear, of whom 1.5 million were clearly unauthorized (Migration News, 2003). In the
united States, the population of unauthorized migrants in March 2006 has been estimated at
between 1.5 million and 12 mil- lion a huge range. unauthorized migrants have also been
estimated to account for 7.2 million workers or about 4.9 per cent of the civilian labour force
there (Passel, 2006). for estimates of the number of migrants in irregular status in some oecD
countries, see table 1.6.
Irregular migration is not just confined to developed countries. Many parts of africa,
asia and latin america have long and porous borders that people com- monly cross without
going through immigration posts. examples are, in africa, the border between South africa
and Zimbabwe, and in asia, the border between Myanmar and Thailand. Indeed, in many
regions most migratory flows might be better considered as informal rather than
irregular, since the authorities are frequently aware of them but tolerate them for a variety
of reasons, including long-established historical patterns of mobility, the usefulness of
migrants for certain interest groups and communities, the evolution of often still poorly
defined regional free movement regimes and the incapacity to police borders adequately. asia
is thought to have several million migrants in irregular status, with the largest numbers likely
to be afghans in the Islamic republic of Iran and Pakistan, filipinos and Indonesians in
Malaysia, and burmese in Thailand. both the republic of Korea and Japan have a substantial
number of over-stayers, with an estimated 210,500 in irregular status in 2007 in the republic
of Korea and an estimated 200,800 in 2007 in Japan.
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2.3 Impact on Receiving Countries

The initial impact of migrants arrival upon the host countrys economy de- pends
upon a number of circumstances. In contexts where wages are relatively flexible, such as the
United States, there is some evidence that the added supply of labor depresses wages of
workers within the same broad education level (Borjas 2003). Where wages are less flexible,
such as in much of Europe, the impact tends to be revealed in higher unemployment (Mnz et
al. 2006). Yet, in both cases, the magnitudes of such impacts appear to be relatively small.
More generally, the employability and productivity of migrants depends upon how
well their skill profiles match the demands of employers. A few coun- tries, including
Australia and Canada, have adopted a point scheme to filter acceptable immigrants in an
effort to enhance the likelihood of job matching. However, where prior job offers are required
for entry, as in some categories of migrants to the United States, the demands of employers
are probably more closely matched. Indeed, it may be argued that a large portion of irregular
mi- gration is driven fairly directly by employers demands. To this extent, penalties on
employers for hiring irregular migrants is probably one of the most effec- tive ways of
limiting undocumented immigration, but few societies possess the political will to impose
and enforce such penalties (Martin and Miller 2000; Hanson 2006). In contrast, employers
demands may reflect hardly at all on the sudden mass influx of refugees that many
developing countries have wit- nessed. Granting asylum to large refugee populations may
impose substan- tial costs on some very low-income countries; finding livelihoods to support
those remaining in camps and absorbing others into the domestic labor market become a high
priority.
The initial impacts of migration upon the host country are thus quite mixed. Though
in most situations, the net overall impact on incomes of natives is probably small. Over time,
other factors come into play. First, the mix of indus- trial activities in the host country may
begin to adapt to the new arrivals. For instance, some of the more labor-intensive forms of
agriculture would probably not exist today in EU countries and in the United States were it
not for access to migrant workers. The fact that some of these lines of agricultural products
are also subsidized raises curious anomalies with respect to public policy.

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Second, migration can have an impact on the fiscal balance of the host state. Whether
migrants are net contributors to this balance depends upon, inter alia, whether they are
employed, whether taxes are collected out of their incomes, and whether they are eligible for
and need state support.8 Certainly some of the high-income nations with low or negative
natural population growth rates are actively considering the potential for migration to resolve
the dynamic problem of supporting an ageing population. More highly-skilled migrants are
probably large net contributors to the fiscal coffer, as are migrants of working age, and those
who stay only temporarily rather than becoming dependent upon state support in their old
age. Thus, unless migration is managed explicitly for this purpose, it is unlikely to offer a
major source of relief in the pending social se- curity crises (Lee and Miller 2000).

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2.4 Impact on Sending Countries

Turning from the economic impacts of migrants upon the host countries and their
existing populations, consider the case of those left behind in the countries of origin. Again
the story is mixed. On the one hand is the negative potential of such factors as brain drain,
to which the following section will turn. On the other hand, remittances tend to be seen by
many governments as the dominant benefit to the home country from labor migration
abroad. Reported remittances to the developing regions have grown rapidly, although it is not
clear how much of this is simply a growth in reporting. In any case, international remittances
to the developing regions are now the largest source of financial inflow after direct foreign
investment, having surpassed both debt flows and official development assistance. For
several of the major emigration countries, remittances exceed merchandise export earnings.
Remittances also offer a critical source of support in times of crisis and tend to increase
during times of economic downturn at home, in contrast to other financial flows (World Bank
2006). Remittances provide an important source of income and of foreign exchange.
Whether remittances stimulate domestic investments, hence economic growth, is
disput- ed (Chami et al. 2003; Catrinescu et al. 2007). Some of the evidence points to
substantial spending on housing and education investments out of remittance receipts
(Edwards and Ureta 2003). Yet, more generally, complaints of inad- equate investment out of
remittance receipts are surely misplaced: one might wish that the country were investing
more, but to insist that those families who receive remittances do this investing seems unfair.
There is some emerg- ing evidence that remittance receipts impact the domestic labor
markets by encouraging withdrawal from labor force participation or at least reduced work
effort (Azam and Gubert 2005). Yet, again, there seems little wrong with this sce- nario if
families choose to take out part of their increased well-being in the form of leisure; moreover
in labor surplus economies, a diminution of labor supply is unlikely to impact others
negatively. Members of very poor rural households in at least some of the developing
countries tend to migrate internally rath- er than internationally. Nonetheless, some
international migration corridors (notably from southern Asia to the Persian Gulf ) have
offered important op- portunities for significant numbers of very poor, low-skilled workers
to mi- grate, resulting in significant poverty reduction at home from the remittances returned

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2.5 Migration of Highly-Skilled Workers

The adult, foreign-born population, with a tertiary education residing in the OECD countries
rose by almost 8 million from 1990 to 2000 (Docquier and Marfouk 2006). This represented
an increase of more than 63 percent. Virtually every OECD country now has mechanisms to
expedite the admission of highly- skilled persons, and the competition to attract the highly
skilled is intensifying.
By 2000, about 42 percent of the highly-skilled migrants in the OECD countries were from
other OECD countries. The interchange of professional personnel among the high-income
countries is clearly important. Still, more than half of the highly skilled migrated from nonOECD countries, raising a specter of a growing brain drain from the developing regions.
North America remains the dominant destination for highly-skilled migrants: by 2000 about
two-thirds of all highly-skilled expatriates in the OECD regions were in North America.
However, the share of Europe has been rising, and some 30 percent of
the net increase in highly-skilled migrants in the OECD entered the European member
countries during the 1990s (see Table 1).
On average, the share of tertiary-educated citizens abroad in the OECD states, relative to the
total population of tertiary-educated persons at home and overseas, rises the lower the per
capita income is in the country of origin. In other words, the relative rate of brain drain is
greater from the lower-income countries. There is, however, considerable variation in this
rate of exodus. From some parts of the world the rate of brain drain has been very high: from
Central America, the Caribbean, East Europe, parts of the Middle East, Indochina, and from
virtually all of the African countries. From some of the smaller island states, well over half of
their tertiary-educated population is overseas; and for most of Africa the proportion exceeds
20 percent. In contrast, the rate of brain drain to the OECD countries is relatively low from
such countries as Indonesia, Swaziland, and several Central Asian countries. Though from
Swaziland, many of the highly skilled migrate to South Africa; and from Central Asia,
movement has been into Russia.
An important source of brain drain is the propensity of foreign students to remain abroad to
work. As noted above, North American universities have traditionally provided the dominant
attraction for foreign students though this flow has more recently been diversified to other
high-income countries as well. There is surprisingly little evidence on the return rates of these
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students. One of the only systematic studies is that of Finn (2001) who reports that 51 percent
of foreigners receiving doctorates in science and engineering from U.S. universi- ties between
1994 and 1995 were working in the United States in 1999. Among students from India and
China, Finn finds these stay rates were 87 and 91 percent respectively. Indeed, a strategy of
attracting the best and the brightest from overseas is implicitly or explicitly becoming a part
of national policy for a number of the high-income countries.10 Offering training at levels
not available at home clearly has its merits both for the students and for the host country.
Whether it is a blessing for those left at home is far less clearif the host coun- try pays the
tuition costs and especially if the students never return home.

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Chapter 3
3.1 Skilled Labour Migration From
Developing Country- Argentina
Argentina: A Country of Immigration and Emigration Argentina is a country with a
long history of migration: in addition to its status as a receptor of European immigration, it
has traditionally been the destination of flows coming from the neighbouring countries of
Bolivia, Paraguay, Chile and Uruguay. It had a low demographic density and had experienced
the early process of demographic transition toward reduced population growth in the course
of the century. From the late 19th century to the mid-20th century, Argentina was a country
of outstanding growth within Latin America, and enjoyed one of the highest per capita
incomes in the world. Industrial expansion came early and proved successful. Buenos Aires
turned into a sort of labour centre that attracted immigrants from the entire region.
The expansion of employment in industry and other modern sectors was
accompanied by slow demographic growth, which stimulated internal migration on top of
immigration from abroad. European immigrants and those from neighbouring countries
contributed to consolidating the urban sectors of Argentina, especially the metropolitan area
of Buenos Aires. Social welfare and economic indicators, differentiated Argentina from the
rest of the region, except for Uruguay, which underwent similar social development (table 4
in statistical annexure). The insertion of immigrants from neighbouring countries in the
labour market was varied.
Rural workers maintained a presence in the areas bordering Chile, Bolivia and
Paraguay, while there was a considerable presence of industrial labourers and service-sector
employees in the urban centres, particularly in the city of Buenos Aires. Transformed into the
largest metropolis of the region, the city also attracted professionals, artists, scientists and
technicians from neighbouring countries. Though it continued to be a reception centre for
migrants in the region, Argentina began to experience an increased emigration of its own
population in the 1960s.
Unlike the processes of Mexican and Central American emigration, in which the
destination was almost exclusively the United States, emigration originating in the Southern
Cone (Argentina, Chile 9 and Uruguay) began to focus also on other regions, mostly on
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European countries, though also Mexico, Venezuela, Israel, Australia and Canada. Even
taking into account this broader geographic distribution, the United States probably continues
to be the most important destination of Argentine emigration 5 . The available estimates on
the emigration of Argentineans indicate that by 1970 the number of citizens living abroad did
not surpass 150,000, and that a decade later there were 290,000 (Gurrieri, 1982), implying
that in the course of the 1970s the volume nearly doubled. Bartocello and Lattes (1986)
estimate a "stock" of emigrants for the period 1955-1984 of 609,000 as the maximum, and
499,000 as the minimum, which corresponds to 2.2% and 1.8%, respectively, of the total
population in 1980.
There are no recent reports that provide emigration figures, though it is widely held
that a structural trend of migration has established itself in the country among the middle and
middle-high income sectors with high levels of education - which tends to maintain a stock of
emigrants at 2 to 3% of the country's total population. These relatively small percentages
demonstrate that the concern about emigration that was manifest in the political and academic
spheres in past decades was due primarily to qualitative aspects related to the skill levels of
the population that was leaving.
A dominant characteristic of Argentine emigration, compared to Latin American
emigration on the whole, is that it is made up of individuals with high levels of education,
and includes an important presence of professionals and technicians. However, during the
1960s and 1970s, there was also a considerable presence of industrial workers. In the 1970s,
to a great extent the consequence of political repression, but also because of rising
unemployment, Argentina's emigration became massive, incorporating a broader array of
occupations and transcending the profile that had been exclusively oriented toward
professionals or skilled labourers. Even so, in comparison with the combined emigration from
other Latin American countries, the Argentineans who emigrated continued to be
characterised by a high level of education and included people well known in the field of
scientific research and in artistic and literary circles.
Skilled migration from Argentina The emigration of skilled individuals (or "brain
drain" in the terminology used in the 1960s and 1970s) was motive for concern among
Argentina's academic circles. The literature on "brain drain" in the 1960s and 1970s was
extensive in that country, perhaps more than in any other in Latin America.

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3.2 Litrature Review

Nurkse in 1953 propounded a theory which explained how development could be
initiated in developing countries by forming capital through the use of disguised unemployed
of the farm in public works. The theory argued that the shift of such labour to non-farm
tasks does not contribute to fall in agriculture output with the assumption of organizational
changes within agriculture so that there will be no reduction of agricultural out put. But it
ignores the importance of the requirement of capital to modernize agriculture to increase its
out put. Hence the theory went wrong with the experiences of developing countries.

In 1954, Lewis developed the theory of economic development with unlimited

suppliers of labour.

He put forward the duel sector model where the capitalist sector will

grow by drawing upon the labour from non-capitalist sector at a subsistence wage. The
surplus of capitalist sector is reinvested. And the theory argues that with an increase in
capital investment in capitalist sector there is increase in marginal productivity.

Due to

surplus labour the wage rate is constant and the increased marginal productivity increased
the surplus in capitalist sector and this will go on until the surplus labour is fully absorbed.
This theory also went wrong from the experiences of developing economies, where the labour
supply increases more than the increase in demand.

Ranis and Fei in 1961 developed another theory explaining a detailed model of
the process of modernization of a labour surplus economy within a neo- classical framework.
Their model showed that a process of excess labour transfer from the traditional sector to the
modern sector results in the full development and commercialization of a developing
economy. They followed Lewis by assuming both the presence of surplus labour and the
exogenous determination of wages, but they extended the analysis to give agriculture a
greater role in promoting industrialization. They introduced the possibility of innovation
and technical progress in agriculture which serve to shift the production function upward
in agriculture. The technical progress rises output, thereby pointing to the importance of
agriculture productivity even before the transfer of surplus labour to industry.
Unlike Lewis, they connected the up gradation of technology in agriculture sector to
provide capital for industries. They realized the importance of agriculture industry
interlinkages.
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In 1967, Jorgenson extended the boundaries of neoclassical growth theory to analyse

the problems of developing countries.

His dual economy model assumed the existence

of surplus labour, the marginal product of labour is not necessarily zero. He assumed that
neutral technological progress takes place in agriculture. His policy conclusions pointed to
the importance of both accelerating the rate of technological progress in agriculture and of
measures to lower the rate of population growth in reducing poverty and unemployment.

Harris and Todaro in 1970 developed a theory which explains the causes of rapid rural
to urban migration in the context of high rates of urban unemployment. The theory point out
that migration is not only a function of urban-rural wage differentials, but also, the
expectations of the migrant over the employment opportunities and wages.

Kerala achieved social development without economic transition. Rural urban

difference was not that much visible in education, health and other human development
indicators as in India or other agrarian countries. Hence, the conventional theories of
development are not suitable to Kerala's situation.

According to Ravenstein (1885) migration was in effect caused by economic

development.

Development theories discussed above deal with migration of

traditional rural sector to urban sector, an under developed to developed regions.

In

present day Kerala's context, without considering the influence of international migration,
labour market studies remained incomplete. Hence we need to have a brief review of
international migration theories

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Chapter 4
4.1 Conclusion
Throughout the year 2000 we have witnessed the resurgence of the emigration debate
in Argentina and Uruguay. New waves of emigration have contributed to this and have been
widely covered in the communications media and in political discourse. "Brain drain" arises
immediately as the centre of discussion and the media have made it a focus of their coverage.
Drawing up policies to reverse brain drain obviously requires identifying the causes. It is
widely known that, in both countries, the critical political situation of the 1970s was a driving
force behind emigration. In the case of Argentina, the instability reigning throughout a fairly
long period in universities and research centres implied widespread discouragement that
fuelled emigration.
Efforts to prevent brain drain reflect a complicated objective and tend to have limited
results. The growing demand for young people, especially skilled young adults, that is
predicted in the coming decades in developed countries will become a magnet that will be
very difficult for the countries of the South to counteract. From the point of view of the
country of origin there is broad agreement in attributing the causes of economic migration to
three main factors: wages, work conditions (infrastructure, availability of materials,
instruments, etc.) and social recognition. In relation to the academic and research spheres,
there is the added argument of the need of those involved in projects to maintain continuity,
an indispensable condition for any activity that requires long-term programming.
The weight attributable to each factor is different in the two countries studied, and the
periods and circumstances in which emigration has occurred are also different. Pessimism is
arguably greater in the Argentine case than in the Uruguayan case, though in the latter our
interview subjects coincided in saying that the country had reached a point where it risks
losing all that was accumulated over the last 15 years (since the dictatorship) - if a new
institutional economic push does not occur. Wages are the factor most often cited as the cause
of emigration by scientists. The lack of infrastructure in laboratories is a growing factor of
dissatisfaction with work conditions.
The situation in this respect is very uneven among the various institutions. In both
countries loans from the Inter-American Development Bank (IDB) have contributed
appreciably to improving infrastructure, though there are significant problems related to the
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availability of funds to maintain and update such improvements. Scientific and technological
investment in Uruguay and Argentina is very limited, ranked among the lowest in Latin
America (around 0.3% of Uruguay's GDP and no more than 0.5% of Argentina's GDP). Both
countries enjoyed a high level of scientific development at one point, and it constitutes one of
Argentina's "national glories."
The State's insufficient investment in science and technology is linked to the fact that
there are difficulties in connecting industry and productive activities in general with research
financing. To be effective, policies for reversing brain drain must, in the first place, eliminate
the reasons that push individuals to decide to emigrate. Second, strategies must be formulated
to capitalise on the positive side of having citizens living in noteworthy situations in the
developed countries, in order to strengthen ties to facilitate the transference of the
experiences and knowledge acquired. Policies should be oriented primarily toward retaining
contact and connecting researchers and members of the academic spheres. It is this type of
skilled migrant that, alongside independent professionals and entrepreneurs, can become
involved in activities that imply benefits and transfers of knowledge and technology for the
country of origin. It is universities and academics in general that can ensure the reproduction
of the system.
The Uruguayan case is particularly suited to the type of activity that tends toward
uniting academic communities "within and without" in order to boost the country's scientific
capital. A small country in demographic terms, the national space is limited for building
critical mass as far as the diversity required by the scientific world today. The creation of
broader spaces, in the framework of regional integration and the unification of emigrant
academic communities with those in the country of origin seem to be a promising alternative.
The existence of a community that has been consolidated, though with difficulties, has set the
pace of Uruguayan scientific development.

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4.2 Bibliography
INTERNET
WWW.GOOGLE.COM
WWW.INVESTOPEDIA.COM

BOOKS
ECONOMICS OF GLOBAL TRADE AND FINANCE- MCOM PART 1 - MANAN
PRAKASHAN
ECONOMICS OF GLOBAL TRADE AND FINANCE- MCOM PART 1 - SHETH
PRAKASHAN

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