marouani_ERF

The Impact of Emigration on MENA Labor Markets Anda David and Mohamed Ali Marouani

In a Nutshell

  • The Middle East and North Africa (MENA) region has seen large volumes of workers leaving their country of origin with, almost 6% of the region’s population migrating in 2013 alone.
  • While unemployment plays a role in encouraging people to migrate, general uncertainty about the future seems to play an important role for young people.
  • The impact of skilled emigration depends on its duration and on the structure of the domestic labor market: it can represent a “brain drain” especially when migration is permanent, while it also relieves pressure on labor markets often characterized by high unemployment rates among graduates.
  • Outflows can significantly impact the labor participation of those left behind, particularly women as households relocate the division of labor after a migrant’s departure.
  • The return of migrants poses challenges when it is a result of involuntary migration, such as mass deportation or where workers return to different regions and sections of the labor market. However, they may also return with new skills and are more likely to start a business than non-migrants.
  • The aggregate skill level of the labor force in the origin country tends to increase in countries with aspiring migrants investing in their own education.
  • The use of remittances by recipient households affects labor supply, since it determines household labor market participation, but also boosts labor demand when remittances are used as capital to start a business and create jobs.
  • Policymakers must increase their focus on migration issues in order to maximize the benefits and minimize the negative impacts by:
    • Gaining a greater understanding of young people’s aspiration to anticipate the size and composition of future outflows.
    • Providing tailored training for their future needs depending on their skills and destinations.
    • Designing incentives for entrepreneurship, such as tax benefits and improvements in business regulation to take advantage of the high skill levels of returning migrants.
    • Closely monitoring the flows of remittances to anticipate future changes to participation in domestic labor markets.

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