MIGRATION AS A RISKY ENTERPRISE: A DIAGNOSTIC FOR BANGLADESH Narayan Das, Alain de Janvry, Sakib Mahmood, and Elisabeth Sadoulet University of California at Berkeley Migration in Bangladesh 400,000 annual departures of temporary workers Mainly men, rural, unskilled Mainly to Gulf countries (90%), some to Europe or East Asia 25% of foreign exchange earnings, $14 billion in 2012 1
Dilemma of migration in Bangladesh Very poor people, poorly informed, not organized Facing: High migration costs (intermediaries, agencies, visa, ticket) High incidence of failure: before departing, after leaving Migration as a risky business: can help move out of poverty, but failure highly costly on household (sale of land, debt, deterrence to try again) Research questions How extensive is migration failure? What are the proximate causes of failure? 2
Originality of study: Data collection 296 villages spread throughout Bangladesh (within 5kms of 1700 BRAC branches) Census of all households: 75,500 males, from 55,565 households. Three- year high frequency recall data on migration status!"#$ %"#$ &"#' ()*+,+*-./01234 56)17/2081.1-8 5 5 5 9 9 5 5 : ;/*05+<=.)1 90>0948+*4)10 50>05+<=.)10?.@=6.*A 9 9 B B B 5 5 : C4D0E+<=.)1 B0>0B=2+)<0160E+<=.14 F0>0F.+/4*0160E+<=.14 9 9 B B B F 9 : 9 F.+/4* 9 9 B B B 9 9 : 9 G+8H6-=.<4* 9 9 B B B B B : B B=2+)<0I#J0E6)178 9 9 B B 5 5 9 : 9 K@=6.*L!0E6)178 9 9 9 9 9 9 B : B B=2+)< 9 9 9 9 9 9 9 : 9 948+*4)1 measure of the extent of migration and migration fealure 3
Intensive survey on a stratified sample of 10 households per village: Causes and consequences of migration success and failure Analysis Focus on costly pre- departure migration failures 4
MOST NOTABLE DETAILED RESULTS (1) Participation in migration and migration failure (village census) Extent of migration: 13.3% of male population B+:;%$3!"#$%&'(&)*)+,#-'*(./0 1'2$#(-3 A@IA4 4567 8,9&:'2$#(-3&.;<&=+(%&>5450?@AA? B%C&:'2$#(-3&3'(D%&=+(%&>545 >@5EF G#',%9&:'2$#-'*( IL> 464 H--%:)-%9&-*&:'2$#-%&C'-"*+-&3+DD%33 4@L7F 46I J'3D*+$#2%9&K&1*$%&-"#(&4>&:*(-"3 >>A!-',,&#--%:)-'(2&'(&H)$',&>54L 4@44E M%3'9%(-3 F?@7>A IF6A N*-#,&:#,%&)*)+,#-'*(&.4?O?5&<%#$3&*,90 A?@77I 45565 5
Failure in migration:!"#$%&'()*+,$,&*-"$./*"$0121!"#$%&'(#)(*#+&",#-)(.(/%*0'&! "#$%&'#()*&+%#()&,,#-.,)&,)-+/'&,+0/ 123 3 "+4$56'&/#()7)85'#),9&0)!3)-50,94 33: 2 ;,&<#()%#44),9&0)=)-50,94)&>'5&(?@ 1%22'334%$()'5(*#+&"),3(.(/%*0'&? A%%)46$$#44*6% 3B@=!"#$%&'(&",'(#)(*#+&",#-)(678 C+D ;,'+$,)(#*+0+,+50)E!7C!F?DG 31H? C++D I0$%6(+0/)(+4$56'&/#())EC!F3D7)C!F3F?DG 22H= C+++D I0$%6(+0/)495',)4,&<)&>'5&()EC!F3F2D7)C!F3F2F?DG 2?H= 6
(2) Cost of migration failure - Average cost of migration: $3,309 to migrate - Cost engaged in failed migration - Average $818 - - Median cost stood at $250-30% spent more than $1,000 - Average annual income in Bangladesh: $1,040 Percent 0 5 10 15 20 25 0 1000 2000 3000 Cost incurred in cases of failure (in US$) Costs higher than $3,000 are represented as $3,000 7
Non-pecuniary cost: discouragement 80 % of failed migrants make no further attempt at migrating in the following three years 8
(3) Proximate causes of migration failure!"#$%&'"()$%*)&%*"#+',%-#.&"/#)$%012!"#$#%"$& '()*!$+"&,-./01&2+-0/-+23"%$&&,-4#5"6 *7)'!/$434&2#6-$82#6-9-5$:2-;"<$ =()>?04&3-#06-016$"#-6@2-;"<$ A)B C6@2/ *)D E4+12/-05-01<2/;$6"0#< >FF Confirmed by the many stories recounted by newspapers and case studies 9
Very strong correlation between country-wide total migration (demand driven) and failure rate in our sample Story: Intermediaries default on their engagement when weak demand at the international level 10
Characteristics of failed vs. successful migrants Successful migrants are younger, more educated, and from villages with larger network of migrants than failed migrants 11
(4) Time to migration among those trying to migrate Duration model to exploit the truncated nature of the observations (27% of those attempting to migrate for the first time) - 25% in 6 months, 50% in a year, almost no success afterwards - 40 % have failed to achieve their goal 3 years later Proportion that is still trying 0.00 0.20 0.40 0.60 0.80 1.00 Time to migration 0 10 20 30 40 Months trying to migrate 12
Sample of individuals that attempted for the first time Mean Hazard ratio for success National migration (1000s migrants/month) 42.7 1.009** 1.008** 1.016** Migration network Number of migrants in village 30.8 1.012** 1.017** Number of migrant relatives 2.2 1.033 Migration through relative 0.5 1.154 Individual characteristics Land owned by household, age education X X Urban 0.05 1.335** 1.645* Number of individuals 4279 4279 1602 census survey (average monthly success 4.2% first 12 months) 10% higher national migration è 3-6% higher success rate any month 10% higher village network è 4-5% higher success rate any month Migrating through relative è 15% (s.e. 13%) higher success rate 13
(5) Success in migration (wage obtained by the migrant) Starting wages are high compared to domestic income, but declining at a rate of 5% per year. Current wages mostly determined by starting wages. Wage in US$ 200 250 300 350 400 Median current wage Median starting real wage 2004 2006 2008 2010 2012 2014 Year of first migration 14
Other factors influencing wage? Country of destination Distribution of starting real wages by country of destination Density 0.001.002.003.004 10% of migrants Singapore, South Korea, Italy, Japan, Cyprus, Brunei, Greece, USA, England, Spain, South Africa, Ireland, France, Canada, Russia, Germany, Portugal, and Turkey 0 200 400 600 800 1000 Starting real wage (in 2013 USD) Interquartile wage range: Gulf countries: [$186-332] Others [$343- $660] Correlate of country of destination: education 15
Conclusions Dilemma of migration in Bangladesh: very poor/uninformed people and very costly/difficult migration High risk of failure both before leaving (34-40%) and after (1%) Huge reward of successful migration but huge cost of failed migration Main proximate causes of failed migration attempts: Fraudulent agent and visa problem: 59% Financial problem: 20% Success driven by international demand for migrants. 16
Policy implications: Important opportunity to help the migration process, with both private and social benefits. BRAC initiatives (need assessment) Safe Migration Program for awareness, information, administrative assistance, and training in employable skills Migrant Loan Program: loan w/o collateral and with visa verification Evaluations in progress 17