Development in Migration and Remittance Flows Among FSM Migrants and their Socioeconomic Effects

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1 Development in Migration and Remittance Flows Among FSM Migrants and their Socioeconomic Effects 2016 Pacific Update Conference July 19, 2016 Michael J. Levin Independent Consultant

2 Remittance Flows Differ from South Pacific Samoans, Tongans, and other Pacific Islanders have long histories of Remittances The Compacts of Free Association only went into effect in the 1980s, so migrant streams started late Because of Provisions in the Compacts, Micronesians have free entry into the United States And so, while they remit, they also put together funds to bring out the next generations Some comparisons:

3 Comparison with Other Pacific Countries [OECD] Amount of Remittances in 2014 (Millions of US Dollars) Vanuatu Tuvalu Tonga Timor-Leste Solomon Islands Samoa Papua New Guinea Palau Micronesia, Fed. Sts. Marshall Islands Kiribati Fiji

4 Percent of GDP for Pacific Countries [OECD] Remittances as Share of GDP in 2014 Vanuatu Tuvalu Tonga Timor-Leste Solomon Islands Samoa Papua New Guinea Palau Micronesia, Fed. Sts. Marshall Islands Kiribati Fiji 0.1% 0.9% 3.5% 3.1% 1.4% 4.5% 7.3% 9.6% 10.7% 14.0% 17.6% 27.1% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

5 Bilateral Remittance Estimates Bilateral Remittance Estimates for 2014 (millions of US$) (October 2015 Version) Remittance Sending Country Remittance Receiving Country Fiji Kiribati Marshalls FSM Palau Samoa Tonga Tuvalu World Australia Guam Kiribati 0 1 New Zealand Northern Mariana Islands United States Source: World Bank Remittances Tables (using migrant stocks, host country incomes, and origin country incomes

6 FSM 2010 Census Data on Remittances The 2010 FSM Census did not collect information on income first time since 1973 The census did collect information on Remittances Some data:

7 Remittances by Amount and State 100% 80% 60% 40% 20% 0% Remittances by Amount and State, FSM: ,933 1, , , , , , , Total Yap Chuuk Pohnpei Kosrae Less than $100 $100 to $199 $200 to $499 $500 to $999 $1,000 or more

8 Percent Receiving Remittances by Age Percent Receiving Remittances by Age, FSM:

9 Average Amount Annual Remittances by Age $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 Average Amount Annual Remittances by Age, FSM: 2010 $890 $869 $759 $662 $565 $

10 Individuals Receiving Remittances by Quintile Precent Individuals Receiving Remittances by Wealth Quintile, FSM: Lowest 2nd Middle 4th Highest

11 Remittances by Place and Quintile 100% 80% 60% 40% 20% 0% Numbers Receiving Remittances from Places by Quintile, FSM: , , ,291 1,193 4, Total Lowest 2nd Middle 4th Highest US Mainland Hawaii Guam 546

12 Migrant Surveys What They Tell Us The series of Micronesian Migrant Surveys started about 1990 soon after Compact implementation Large surveys in 1992, 1997, 2003 and 2012 Some results from the 2012 Survey:

13 FSM Emigrants by Place: 1995 to ,000 FSM Emigrants: 1995 to ,000 30,000 20,000 10, Guam CNMI Hawaii US mainland

14 Population Pyramid: Micronesian Migrants, 2012

15 New data: US American Community Survey for Hawaii Tables in this series combine results of the American Community Survey for Hawaii from 2010 to 2014 (even if they say 2010 only) About 120 th of all housing units are surveyed each month Micronesians are more likely to respond than others because it is an event and some fear deportation so cooperate Imputation often increases numbers Groups are Marshallese (alone and with others), Palauans (both combined) and Micronesians (alone and with others) Micronesian is self-defined

16 Birthplace by Group 100% Birthplace by Group, Hawaii, ACS: % 60% 12,727 13,189 3,109 3, % 20% 0% 13, , ,626 Micro alone Micro others Marsh Alone Marsh others Palauans US Born US Terr Naturalized U.S. citizen Not a U.S. citizen

17 Percent High School Graduates (or more) Percent High School Graduates, Hawaii, ACS: Alone And Others Alone And Others 97.0 Micronesians Marshallese Palauans

18 Percent Bachelor s Degree (or more) Percent Bachelor's Degree, Hawaii, ACS: Alone And Others Alone And Others 17.4 Micronesians Marshallese Palauans

19 Percent Speaking English at Home Percent Speaking English at Home, Hawaii, ACS: Micro alone Micro others Marsh Alone Marsh others Percent Speaking English at home Palauans

20 Labor Force Participation by Group and Sex Labor Force Participation by Group and Sex, Hawaii, ACS: Alone And Others Alone And Others Palauans Micronesians Males Females Marshallese

21 Percent Unemployed by Group and Sex Percent Unemployed by Group and Sex, Hawaii, ACS: 2010 to Alone And Others Alone And Others Palauans Micronesians Males Females Marshallese

22 Median and Mean Household Income $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Median and Mean Household Income in 2010, Hawaii, ACS: $81,761 $72,508 $54,153 $49,243 $43,341 $38,429 $33,302 $33,727 $22,601 $23,108 Alone And Others Alone And Others Palauans Micronesians Marshallese Median household income (dollars) Mean household income (dollars)

23 Per Capita Income by Group $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- Per capita income (dollars) in 2010 by Group, Hawaii, ACS: 2010 to 2014 $19,634 $11,573 $11,934 $6,906 $6,537 Alone And Others Alone And Others Palauans Micronesians Marshallese

24 Gross Rent by Group 100% 80% 60% Gross Rent, Hawaii, ACS: ,331 1, % 20% 0% Alone And Others Alone And Others Palauans Micronesians Marshallese Less than $500 $500 to $999 $1000 to $1,499 $1500 or more

25 Gross Rent as Percent of Household Income 100% 80% 60% 40% 20% 0% Gross Rent as Percent of Household Income, Hawaii, ACS: 2010 to Alone And Others Alone And Others Micronesians Marshallese Palauans Less than 15 percent 15 to 24 percent 25 to 34 percent 35 percent or more

26 Percent with Housing Assets, Guam and FSM: 2010 Cement roof Airconditioner Computer vehicles Refrigerator FSM Guam

27 DISCUSSION 27

28 Why low remittances? The data show that while migrant incomes are low, they are large enough that individuals and households could remit more than they do BUT while some remit, many hold funds instead to bring the next generation out Micronesian migrants are getting established in Hawaii and the US Mainland and so beginning to buy housing units, get cars, and appliances Since Micronesia has so little economic development this will continue

29 Pushes and Pulls The FSM has particular factors that most migration streams don t have Although not discussed here, FSM citizens can join the US Military,and become US Citizens, and many of them have Also, under the Compact of Free Association, Micronesians can move into the US and its territories without visas the major pull factor The major push factor is the lack of economic development within FSM to hold current residents and to attract back those who have moved 29

30 Push factors Infrastructure Airports FSM must maintain at least 4 major international airports for each of the States as well as smaller airports for some of the outer islands very difficult and expensive to do Communication Modern communication also is hard to develop and maintain, including internet communication as well as cell phone stations Roads Roads must be maintained to allow for economic development 30

31 Push factors Sea transport General shipping ports must be maintained to receive large ships and to send out smaller ships Field trip ships many of the outer islands communities are only accessible by field trips these must be bought and maintained to provide maximum service Copra FSM seems to be initiating a return to copra making even if this is successful, ships must bring the coconut in for processing 31

32 Push factors Economic Development Lack of any economic development more than half the jobs are public sector and this is unlikely to change since this sector is artificially maintained Most possible public sector jobs already filled and those in them are not going to age out very soon FSM sees no real private sector development Mom and Pop stores seem to be the main private employers 32

33 Pull factors -- Education Education is the traditional method for movement outside FSM In the early years, students went for schooling When they received their degrees they came back and took Government jobs which were then plentiful Currently, FSM is not creating new jobs and so those leaving tend to make lives outside Micronesia 33

34 Pull factors Jobs In the early years of the migration, Micronesians could not officially take jobs because of their visas With the Compact, no visa is needed, and Micronesians now go to Guam, especially, and take entry level jobs (e.g., McDonalds) They get paid much more than they would in the FSM and live in groups to accumulate funds 34

35 Pull factors -- Reunification The Compact also facilitates family reunification when young men and women leave the FSM to start lives outside They then save enough money to bring out other brothers and sisters, and then parents, and children Hence, the family structure can easily be maintained 35

36 Pull factors -- Medical Because of changing diets and life styles, FSM residents are seeing more and more medical problems like diabetes and hypertension Dialysis is more often needed because of changes in diet Exercise is no longer attained through daily activities and so is often insufficient Obesity is a major problem, so FSM citizens migrate to receive attention outside 36

37 Pull factors Life style Many young Micronesians (and older ones) find life in the FSM too slow and want to emigrate for more diversity Housing conditions are much better outside Micronesia The outside world offers more protection from typhoons, tidal waves and other natural disasters Jobs are more plentiful and more diverse 37

38 Conclusions Lack of economic development within the FSM is the major push for young and not so young people leave the country for jobs The attractiveness of the outside world has been enhanced by the Compact of Free Association s allowing free entry into the US and its territories The outflow is likely to continue unless the FSM can find a way forward with economic development 38

39 THE END 39