Get rich or die tryin

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1 Get rich or die tryin Maheshwor Shrestha The World Bank March 28, 2017 Shrestha (The World Bank) Get rich or die tryin March 28, / 19

2 Introduction Motivation Motivation Over 1 billion individuals want to migrate abroad for temporary work (Gallup 2011). Shrestha (The World Bank) Get rich or die tryin March 28, / 19

3 Introduction Motivation Motivation Over 1 billion individuals want to migrate abroad for temporary work (Gallup 2011). Frequent reports of bad migration outcome: About 500 die every year crossing the US-Mexico border. Over 5,000 individuals died in 2016 in the Mediterranean. Almost 1,000 migrants from Nepal, India and Bangladesh died in Qatar in 2012 and Shrestha (The World Bank) Get rich or die tryin March 28, / 19

4 Introduction Motivation Priors and beliefs on migration Policymakers: there is over-migration Individuals overestimate the gains from migration. And underestimate the risks of migration. with proper information, fewer people would choose to migrate. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

5 Introduction Motivation Priors and beliefs on migration Policymakers: there is over-migration Individuals overestimate the gains from migration. And underestimate the risks of migration. with proper information, fewer people would choose to migrate. Academic literature: observed migration is too low High observed earnings disparity across locations even within a country where institutional barriers to migration are absent. Migration improves income and welfare (example: Bryan et al. 2014, McKenzie et al. 2010, Clemens 2011). Individuals are not migrating to take advantage of the opportunities. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

6 Introduction Overview This presentation Are potential migrants misinformed? misinformation on earnings misinformation on mortality rate abroad How does misinformation affect migration choices? Shrestha (The World Bank) Get rich or die tryin March 28, / 19

7 Introduction Overview This presentation Are potential migrants misinformed? misinformation on earnings misinformation on mortality rate abroad How does misinformation affect migration choices? Answer these questions in the context of potential work migrants from Nepal to Malaysia and the Persian Gulf countries. Randomized controlled trial (RCT) that provides information in these dimensions Examines the impact on: expectations of earnings and mortality rates actual migration decision Shrestha (The World Bank) Get rich or die tryin March 28, / 19

8 Introduction Overview Presentation outline 1 Introduction 2 Context 3 Experiment design and empirical strategy 4 Does providing information affect perceptions? 5 Does information affect migration? 6 Conclusion Shrestha (The World Bank) Get rich or die tryin March 28, / 19

9 Context Presentation outline 1 Introduction 2 Context 3 Experiment design and empirical strategy 4 Does providing information affect perceptions? 5 Does information affect migration? 6 Conclusion Shrestha (The World Bank) Get rich or die tryin March 28, / 19

10 Context Context Recent international migration has surged drastically Migrant to population share, (percent) All India Non-India Year Shrestha (The World Bank) Get rich or die tryin March 28, / 19

11 Context Context International migration from Nepal Migration to countries outside India has increased drastically in recent years. driven by low-skilled male migration to Malaysia and the Persian Gulf temporary migration (each episode lasts 2 to 3 years). in many countries visa is tied with specific employer Shrestha (The World Bank) Get rich or die tryin March 28, / 19

12 Context Context International migration from Nepal Migration to countries outside India has increased drastically in recent years. driven by low-skilled male migration to Malaysia and the Persian Gulf temporary migration (each episode lasts 2 to 3 years). in many countries visa is tied with specific employer Migration process is heavily intermediated: Potential migrants typically contact independent local agents. Local agents put them in contact with recruitment agencies. Recruitment agencies match the workers with firms or agencies abroad. also arrange for visa, travel, clearances, permits, and other paperwork. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

13 Context Context International migration from Nepal Migration to countries outside India has increased drastically in recent years. driven by low-skilled male migration to Malaysia and the Persian Gulf temporary migration (each episode lasts 2 to 3 years). in many countries visa is tied with specific employer Migration process is heavily intermediated: Potential migrants typically contact independent local agents. Local agents put them in contact with recruitment agencies. Recruitment agencies match the workers with firms or agencies abroad. also arrange for visa, travel, clearances, permits, and other paperwork. Both agents and manpower companies receive a commission. Potential for misinformation: financial incentive to distort information. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

14 Context Context Policymakers feel that there is misinformation Potential migrants may overestimate earnings Intermediaries have financial incentive to distort information to make migration more attractive Anecdotes about migrants dissatisfied with the job or pay Contracts may not be honored, or does not have enough information about over-time pay No publicly available and accurate source of information on actual earnings Shrestha (The World Bank) Get rich or die tryin March 28, / 19

15 Context Context Policymakers feel that there is misinformation Potential migrants may overestimate earnings Intermediaries have financial incentive to distort information to make migration more attractive Anecdotes about migrants dissatisfied with the job or pay Contracts may not be honored, or does not have enough information about over-time pay No publicly available and accurate source of information on actual earnings Potential migrants may be facing high mortality risk Large death tolls reported in the media (2 coffins a day). Data on the number of deaths may be available, but difficult to find the mortality rate Shrestha (The World Bank) Get rich or die tryin March 28, / 19

16 Context Context Example of media report of migrant deaths Shrestha (The World Bank) Get rich or die tryin March 28, / 19

17 Experiment design and empirical strategy Presentation outline 1 Introduction 2 Context 3 Experiment design and empirical strategy 4 Does providing information affect perceptions? 5 Does information affect migration? 6 Conclusion Shrestha (The World Bank) Get rich or die tryin March 28, / 19

18 Experiment design and empirical strategy Study setting Field study (January 2015) Field study at the Department of Passport in Kathmandu. Sample: 3,319 males who intend to migrate for work in Malaysia or the Gulf countries. 1,411 inexperienced potential migrants: have never migrated for work abroad. 1,341 experienced potential migrants: Migrated before, but need to search for work 567 have an existing job abroad, and are back on holiday. Average age 27.5, average schooling of 7.5 years Similar to current migrant population in the census Shrestha (The World Bank) Get rich or die tryin March 28, / 19

19 Experiment design and empirical strategy Study setting Department of Passport in Kathmandu Shrestha (The World Bank) Get rich or die tryin March 28, / 19

20 Experiment design and empirical strategy Experiment design Order of events 1 Collect data on basic demographics, contact information, previous migration experience. 2 Ask their intended destination country. 3 Information treatment provided on their chosen destination. Verbal as well as shown in a card. 4 Elicit beliefs about earnings and mortality rate abroad. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

21 Experiment design and empirical strategy Experiment design Order of events 1 Collect data on basic demographics, contact information, previous migration experience. 2 Ask their intended destination country. 3 Information treatment provided on their chosen destination. Verbal as well as shown in a card. 4 Elicit beliefs about earnings and mortality rate abroad. 5 Follow-up phone survey 3 months later. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

22 Experiment design and empirical strategy Experiment design Randomized information treatment Types of information Basic information on national flows: provided to everyone. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

23 Experiment design and empirical strategy Experiment design Randomized information treatment Types of information Basic information on national flows: provided to everyone. Wage information: randomly assigned to one of 3 groups No wage information high information (average reported wages in 2013) low information (average reported wages in 2010) Shrestha (The World Bank) Get rich or die tryin March 28, / 19

24 Experiment design and empirical strategy Experiment design Randomized information treatment Types of information Basic information on national flows: provided to everyone. Wage information: randomly assigned to one of 3 groups No wage information high information (average reported wages in 2013) low information (average reported wages in 2010) Death information: randomly assigned to one of 3 groups No death information high information (death toll from a high incident district) low information (death toll from a low incident district) Shrestha (The World Bank) Get rich or die tryin March 28, / 19

25 Experiment design and empirical strategy Experiment design Intervention message Basic information: Every month, XXXX people from Nepal leave for work in DEST Shrestha (The World Bank) Get rich or die tryin March 28, / 19

26 Experiment design and empirical strategy Experiment design Intervention message Basic information: Every month, XXXX people from Nepal leave for work in DEST Wage information: In YYYY, migrants to DEST earned NRs EEEE only in a month Shrestha (The World Bank) Get rich or die tryin March 28, / 19

27 Experiment design and empirical strategy Experiment design Intervention message Basic information: Every month, XXXX people from Nepal leave for work in DEST Wage information: In YYYY, migrants to DEST earned NRs EEEE only in a month Death information: Last year, NN individuals from DIST, one of Nepal s 75 districts, died in DEST Shrestha (The World Bank) Get rich or die tryin March 28, / 19

28 Experiment design and empirical strategy Experiment design Sample information cards Shrestha (The World Bank) Get rich or die tryin March 28, / 19

29 Does providing information affect perceptions? Presentation outline 1 Introduction 2 Context 3 Experiment design and empirical strategy 4 Does providing information affect perceptions? 5 Does information affect migration? 6 Conclusion Shrestha (The World Bank) Get rich or die tryin March 28, / 19

30 Does providing information affect perceptions? Impact of information on perceptions Low death information lowers expected mortality rate Expected 2-year mortality rate (per 1000 migrants) Control Inexperienced Death (Hi) Death (Lo) Wage (Hi) Wage (Lo) 17.4 Control Experienced Death (Hi) Death (Lo) Wage (Hi) Wage (Lo) Shrestha (The World Bank) Get rich or die tryin March 28, / 19

31 Does providing information affect perceptions? Impact of information on perceptions Wage information lowers net earnings for the inexperienced Net earnings (in $1000) Inexperienced Experienced Control Death (Hi) Death (Lo) Wage (Hi) Wage (Lo) Control Death (Hi) Death (Lo) Wage (Hi) Wage (Lo) Shrestha (The World Bank) Get rich or die tryin March 28, / 19

32 Does information affect migration? Presentation outline 1 Introduction 2 Context 3 Experiment design and empirical strategy 4 Does providing information affect perceptions? 5 Does information affect migration? 6 Conclusion Shrestha (The World Bank) Get rich or die tryin March 28, / 19

33 Does information affect migration? Follow-up survey Telephone follow-up survey (April 2015) Conducted 3 months after the intervention had collected the respondent s, his wife s and a family member s phone numbers. Key purpose was to get information on their migration status. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

34 Does information affect migration? Follow-up survey Telephone follow-up survey (April 2015) Conducted 3 months after the intervention had collected the respondent s, his wife s and a family member s phone numbers. Key purpose was to get information on their migration status. Individual considered migrated if 1 already migrated or will do so in 2 weeks 2 phone is switched off or unavailable not defined for refusals or confirmed wrong numbers. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

35 Does information affect migration? Effect on migration Low death information increases migration Shrestha (The World Bank) Get rich or die tryin March 28, / 19

36 Does information affect migration? Effect on migration Wage information lowers migration for the inexperienced Shrestha (The World Bank) Get rich or die tryin March 28, / 19

37 Conclusion Presentation outline 1 Introduction 2 Context 3 Experiment design and empirical strategy 4 Does providing information affect perceptions? 5 Does information affect migration? 6 Conclusion Shrestha (The World Bank) Get rich or die tryin March 28, / 19

38 Conclusion Concluding remarks Beliefs are crucial determinants of migration decision. Potential migrants (or, policymakers) may not have correct information on the risks and rewards of migration. Misinformation persists even if a large segment of the population migrates. May stem from the nature of the intermediation market. May stem from the inherent difficulty to learn about some risks. Potential migrants do respond when information is provided. Large (welfare) benefit of providing information that matters to them. In this setting, on the net, misinformation has lowered migration. Shrestha (The World Bank) Get rich or die tryin March 28, / 19

39 Conclusion THANK YOU! Shrestha (The World Bank) Get rich or die tryin March 28, / 19

40 Bibliography Bryan, G., Chowdhury, S. & Mobarak, A. M. (2014), Underinvestment in a profitable technology: The case of seasonal migration in Bangladesh, Econometrica 82(5), Clemens, M. A. (2011), Economics and emigration: Trillion-dollar bills on the sidewalk?, The Journal of Economic Perspectives pp McKenzie, D., Stillman, S. & Gibson, J. (2010), How important is selection? Experimental vs non-experimental measures of the income gains from migration, Journal of the European Economic Association 8(4), URL: Shrestha (The World Bank) Get rich or die tryin March 28, / 19