HOW DOES

MIGRATION AFFECT
LABOUR MARKET?
MANSI MANEK
ROLL NO :10
SYBSC ECO
 CONTENT PAGE

1. W H A T D O E S M I G R AT I O N MEAN
(INTRODUCTION)
PAGE 3
2. WHY DO LABOURS MIGRATE
PAGE 4
3. INTERNAL MIGRATION
PAGE 7
4. IMPACTS OF MIGRATION IN LABOUR MARKET
PAGE 10
5. POSITIVE IMPACTS OF LABOUR MIGRATION
PAGE 12
6. NEGATIVE IMPACTS OF LABOUR MIGRATION.
PAGE 13
7. PROBLEMS FACED BY LABOURERS
PAGE 14
8. CONCLUSION.
PAGE 18
9. REFERENCES
PAGE 20
 WHAT DOES MIGRATION
MEAN?
Labour migration is de ned as the mov ment of persons from their home
State to another State for the purpose of employment. Today, an estimated
86 million persons are working in a country other than their country of
birth. Despite the efforts made to ensure the protection of migrant
workers, many migrants continue to experience numerous problems
particularly more vulnerable groups, such as female domestic workers,
entertainers and lower skilled workers.

Organized and well managed labour migr tion has enormous potential for
Governments, communities, migrants, employers and other stakeholders in
countries of origin and desti ation. While job creation at home is the rst
best option, an increasing number of countries see international labour
migration as an int gral part of national development and emplo ment
strategies by taking advantage of global employment opportunities and
bringing in foreign exchange.

In countries of origin labour migration can relieve pressure on

unemployment and can contribute to development through the channeling
of remittances, transfer of kno how, and the creation of business and
trade networks. In countries of dest nation facing labour shortages,
orderly and wel managed labour migration can lighten labour scarcity,
facilitate mobility, and add to the human capital stock.

To protect migrant workers and to optimize the bene ts of labour

migration for both the country of origin and desti ation as well as for the
migrants themselves, clearly formulated labour migration po cies,
legislation and effective strategies are required.
l­
e­
fi
n­
w­
i­
e­
a­
n­
fi
y­
l­
fi
 WHY DO LABOURS MIGRATE?
1.For Career Enhancement

• Willing to work abroad for a long time has been considered elite in
the Indian context. Irrespective of the professions, people are willing
to migrate abroad, be it to explore new places, better employment
opportunities, for stability in life (economic gains), etc.
• According to a report by The Economic Times, more than 66% of
Indians are seeking to work abroad.
• Under the best destination for migrants category in the World
Happiness Report, the USA ranks 16th after Finland, Canada and
among the best origin countries, India ranks 133rd.

2.Overpopulation

• Overpopulation is one of the growing concerns of developing and

underdeveloped countries. The increased population, thus resulting in
lesser opportunities or low wages, is one of the major causes of
migration among Indian citizens.
• In the present times, increasing population is one of the growing
concerns and causes of immigration in the developing countries of
Asia, Africa, and Latin America.
• The International Migrant Stock Report 2019 states India is one of
the top sources of international migrants, constituting about 6.4% of
the total migrant population, i.e. about 17.5 million in number.
•
3.Social and religious reasons

• It is general for us humans to have the willingness to reside among our

community or religious groups.
• The Push factor involved here is a feeling of insecurity that is driving
individuals.
• For example, in the current scenarios of Kashmir pandits and
Punjabi, Hindus are migrating out of J&K and Punjab, respectively,
and Muslims are moving out of Hindu-dominated areas to Muslim-
dominated areas/ countries.

4. Poverty

• Poverty is one of the major factors badly affecting the Indian

economy. It is a condition where an individual household is not even
able to meet basic living requirements. It can be a result of various
reasons like low wages, constant increases in prices, unemployment,
lack of awareness, etc.
• India has been witnessing a decline in poverty, but this has been at a
very slow pace, and still, 20.8% (as of 2020) of the Population
account for below-the-poverty-line families.
• Rural India witnesses massive migration (males) of skilled workforce
aiming to at least be able to provide a standard of living to their
families.
• 2019 statistics indicate that there are more than 169 million migrant
workers worldwide.
• Indians’ most preferred destination of international migration is UAE
and gulf countries and 70% of Indian skilled worker migrants belong
to UP and Bihar.
5. Better Healthcare

• Health care is the fundamental right of every individual. Even though

the technological advancement that India witnesses, people are willing
to go abroad for better healthcare services.
• The Economic Times reports that as of 2021, there was a 20%
increase in visa queries, with respect to the individuals willing to move
abroad to attain better and safer health care services.
• The queries were not just for the USA, Canada, and Australia but
also for less popular countries like New Zealand, Germany, the UK,
etc., as well.

6. Political causes

• The migrants under this cause are the ones who are in search to
experience political freedom compared to the restrictive lives back in
their origin countries.
• Political push factors that are in uencers are persecutions based on
political identi cation, policy changes, or civil wars.
• For example, the recent Agriculture Policy changes made in India are
believed to negatively impact with respect to the cultivators, resulting
in a change of livelihood. Sri Lanka is one of the best examples of the
political and economic crisis of 2022.
fi
fl
 INTERNAL MIGRATION

Internal migration, the movement of people within a country, results in a

more ef cient allocation of human resources to sectors and regions where
they are better utilized. In India, as in most countries, there are generally
no restrictions on internal movement. The number of internal migrants in
India was 450 million as per the most recent 2011 census. This is an
increase of 45% over the 309 million recorded in 2001. This far exceeds
the population growth rate of 18% across 2001-2011. Internal migrants as
percentage of population increased from 30% in 2001 to 37% in 2011.

Despite the signi cant increase in internal migration recorded in 2011, the
nature of movement remains relatively unchanged since 2001. Bulk of the
movement (62%) is within the same district. Another 26% is between
districts within the same state. Only 12% of movement is inter-state. nter-
state migrants represent only 4% of population in India in 2011, a rate
almost unchanged since 2001. For those moving in less than 5 years, this
value was even smaller at around 1% for both censuses. This was
signi cantly less than the ve-year interval inter-state migration rate of
fi
fi
fi
fi
almost 10% in the US and nearly 5% in China (despite the internal
movement controls there known as the hukou system). According to a
research paper, India has the lowest rate of internal migration in a sample
of 80 countries.

The low rate of inter-state migration is cause for concern since it indicates
that optimal allocation of human resources across the regional dimension
is facing frictions. A World Bank paper, using 2001 census data, attributes
the low rate of internal migration to:
(a) Non-portability of entitlements (such as the Public Distribution
System)
(b) Preferential norms in educational institutions
(c) Domicile requirements for state government jobs
With the introduction of Aadhar-based bene ts,the issue of bene ts
portability may be addressed. More detailed analysis, using customized
surveys (rather than relying on census or other general data), is required.
This could lead to policy options to enhance rates of inter-state migration
to boost optimization of human resources in the spatial dimension and
thereby reduce poverty and boost shared prosperity
fi
fi
The service sector is the biggest employer of migrants
According to the report, 66.2 per cent of migrant workers are in services,
26.7 per cent in industry and 7.1 per cent in agriculture in India
 IMPACTS OF MIGRATION IN
LABOUR MARKET
The impacts of migration on the labour market critically depend on the
skills of migrants, the skills of existing workers, and the characteristics of
the host economy. They are also likely to differ between the short and long
run when the economy and labour demand can adjust to the increase in
labour supply.

Migration affects the labour supply, as it increases the pool of workers in

certain sectors of the economy. At the same time, immigration is likely to
increase the demand for labour, as migrants expand consumer demand for
certain goods and services. That is, migration may increase competition for
existing jobs in certain occupational sectors but it can also create new jobs.

The immediate short-term effects of migration on the wages or

employment of existing workers depends on the extent to which migrants
have skills that substitute or complement those of existing workers (e.g.
Borjas 1995). When migrant workers are substitutes for existing workers,
immigration is expected to increase competition for jobs and reduce wages
in the short run. In terms of employment, the extent to which declining
wages increase unemployment or inactivity among existing workers
depends on their willingness to accept the new lower wages. If, on the
other hand, the skills of migrants are complementary to those of existing
workers, all workers experience increased productivity which can be
expected to lead to a rise in the wages of existing workers. In general,
workers in low skilled occupations are expected to face more competition
from migrants because the skills needed for those jobs are easier to acquire
and are less specialised.
 Second, in addition to expanding labour supply, immigration can also
expand the demand for labour and, thus create new jobs. This is because
there is not a xed number of jobs in the economy (the so-called “lump of
labour fallacy”). Migrants expand consumer demand for goods and
services, and employers may increase production in sectors where migrant
labour is used (e.g. agriculture or care sectors).

Changes in wages and employment are not the only ways in which an
economy responds to migration. There are at least two other adjustment
mechanisms (see e.g. Dustmann, Glitz and Frattini 2008). First,
immigration may change the mix of goods and services produced in the
economy and thus the occupational and industrial structure of the labour
market. For example, the immigration of low-skilled workers may expand
the production (provision) of certain products (service) that use low-skilled
labour intensively. The expansion of the sector may then increase demand
and drive wages back up. Similarly, migration may change the technology
used for producing (providing) certain products (services). For example, the
immigration of skilled workers may encourage innovation and the
adoption of more skill intensive technologies which would again affect
labour demand. The extent to which investment and labour demand
respond to immigration depends on the characteristics of the economy.
During an economic downturn labour demand may respond more slowly
than during times of economic growth.

As with the impacts on employment and unemployment, several studies

have found that effects are different for high vs. low skilled/paid workers.)
nd positive effects for most workers but negative effects for the lower paid;
they found that a 1 percentage point increase in the ratio of migrants to
non-migrants leads to a 0.6% decrease in wages for workers at the 5th
earnings percentile and a 0.5% decrease at the 10th percentile. Another
study focusing on wage effects at the occupational level found that, in the
unskilled and semi-skilled service sector, a 1 percentage point rise in the
fi
fi
 share of migrants reduced average wages in that occupation by about
0.2% .

POSITIVE IMPACTS OF LABOUR

MIGRATION
• Unemployment is reduced and people get better job opportunities
for rural people

• Migration helps in improving the quality of life of people.

• It helps to improve the social life of people as they learn about new
culture, customs, and languages which helps to improve brotherhood
among people.

• Migration of skilled workers leads to a greater economic growth of

the region.

• Children get better opportunities for higher education and job

opportunities

• The population density is reduced and the birth rate decreases

signi cantly .

• The migration of a family member brings additional income through

remittances, which can support household consumption and
investment.

• This income effect can reduce the need for child labor and increase
children’s schooling, notably for girls in developing countries.
fi
 • Remittances can improve families’ sanitation, health care, and
nutrition and ll in for missing formal health insurance in the short
term.
• Remittances can enable remaining family members to engage in
higher-risk, higher-return productive activities.
• Where most migrants are men, the bargaining power of women who
stay behind may be strengthened.

N E G AT I V E I M PA C T S O F L A B O U R
MIGRATION

• The absence of the main caregiver can increase children’s probability of

dropping out of school and delay school progression.

• Disrupted family life can lead to poor diets and increased psychological
problems.

• Migration may reduce incentives for education when perceived future

returns to education are low because of expectations of migration.

• Migration can reduce labor force participation for family members left
behind, especially for women

• The migration of an economically active family member places a heavier

burden on those who stay behind, who must make up for the lost
employment and spend more time on household chores.
fi
 PROBLEMS FACED BY THE LABOURERS
1. Language Barriers
The language barrier is the main challenge as it affects the ability to
communicate with others. That is because it is assumed that migrants
will learn English or French, depending on their preferences. This
may negatively impact the quality of informed decision-making and
the care experience for immigrants.
Language barriers can also amplify the effects of other sources of
disadvantage. In some countries, immigrants get substandard health
care because they cannot speak the native language well. Moreover,
the differences between the languages of the rst generation and
second-generation migrants can harm immigrants.
2. Lack of Employment Opportunities
Migrants are among those people who are most likely to face
discrimination on the job. That is because there are many problems
rooted in how assignments are designed and managed. Moreover,
many immigrant workers are excluded from labor and safety
protections that are enjoyed by native-born workers.
Newly arrived migrants are usually disenfranchised in terms of their
knowledge of the job market. At the same time, migrant professionals
face dif culties in obtaining recognition for foreign academic
credentials. Therefore, better policies are required to help minimize
the hurdles that refugees face in the employment process.
3. Housing
Migrants are probably the most vulnerable group when it comes to
housing. That’s because they face severe challenges nding safe,
decent, and affordable housing. However, housing problems for
immigrants are more than just the homeownership rate. Many of
fi
fi
fi
these recently settled immigrants are jobless and can’t afford to pay
rent. Moreover, there’s a higher housing cost burden for illegal
migrants compared with their legal migrant counterparts. These
housing problems require national and local responses.
Those who manage to get better housing should use a better security
solution, such as IdentityForce Theft Protection, to secure their data
from prying eyes.
4. Access to Medical Services
People should have access to health care services regardless of their
nationality. However, immigrants have low rates of medical insurance
coverage and poor access to health care services. Besides, policy
changes have limited migrants’ access to insurance and health care.
These barriers range from nancial limitations to discrimination and
fear of deportation. This has contributed to growing concerns about
migrant’s ability to participate in many free healthcare programs.
In many countries, undocumented immigrants aren’t eligible to buy
health insurance coverage. At the same time, research shows that
migrant families often forgo needed health care because they fear
discrimination. Also, many immigrants are not eligible for subsidized
participation in national health insurance programs.
5. Transportation Issues
The ability to drive a car can be essential to getting many everyday
tasks done. However, migrants have limited options when it comes to
accessing reliable transport. One of the most signi cant dif culties
immigrants face is the age-related unreliability of their vehicles.
Therefore, getting to work and limited transportation are all genuine
issues for migrants.
Migrants have problems with their travel primarily because they face
auto-related issues, including their vehicles’ age. Private transportation
is also a problem since most immigrants can’t obtain a driver’s license.
fi
fi
fi
6. Cultural Differences
The general understanding of migrants is based upon falsehoods,
misunderstandings, and myths. These false ideas cause large and
unfair disparities in many aspects of their life.
Even well-settled migrants face ongoing cultural and communication
barriers. This can range from social customs to more signi cant issues
such as religion. For instance, children may feel ashamed that they
don’t know the most famous music.
Fear and distrust of migrants have fueled the creation and success of
cultural myths in many countries. Even deeds done with a good
intention can come off as culturally insensitive. Therefore, people
should keep an open mind and desist from perceiving anything that is
different to be “wrong.”
7. Raising Children
Growing up as the child of parents who migrated to another country
is not easy. The socioeconomic and psychosocial concerns that
children of migrants often face in a new country can be challenging.
Depression, anxiety, and panic disorder are common among
immigrants’ children.
The pressure that children of migrants face is high, and mental health
support is low. Unlike adults, children are still in the process of
creating their identities. Therefore, being caught between two
cultures can create numerous internal con icts.
Research has shown that children of migrants are more likely to
struggle in school. Other forms of discrimination they may face
include discrimination, isolation, and nancial stresses.
fi
fl
fi
8. Prejudice
Many migrants experience discrimination. In fact, there’s been a
mammoth sweep of increased anti-migration prejudice. These
prejudices are exacerbated by how much news and information you
consume. In particular, anti-migrant attitudes sustain restrictive
policies.
The prejudice tends to be either against all minority ethnic and
religious groups. For instance, more non-EU migrants feel they face
discrimination in the UK than those from Europe.
Many governments are stepping up efforts aimed at reducing
discrimination and enhancing integration. That’s why we see more
anti-racism and prejudice reduction campaigns on TV.
CONCLUSION
If capital is perfectly elastic, then migration will not affect labour
market outcomes of native workers as long as immigrants
perfectly resemble natives in terms of skills—the economy will
absorb the additional labour force simply by expansion.
If, on the other hand, immigrants differ from native workers in
skill composition, and if we exclude other mechanisms of
adjustment, then absorption will imply wage adjustments. Who
gains and who loses from immigration depends on the skill mix of
immigrants relative to native workers. Thus, immigration will lead
to a re-distribution, harming some, but leading to gains for others.
The average effect immigration has on wages will again depend
on the assumption we are willing to make about capital supply. If
capital supply is perfectly elastic, the average wage will not
decrease, but may increase if the in ows are suf ciently high
owing to a migration surplus. If capital supply is not perfectly
elastic, there will again be an average gain for the overall
economy, but this is partly captured by the owners of capital, so
that average wages may decrease. Important in this discussion is
to note that the same immigrant in ow may affect different
recipient countries in a different way, depending on the skill
structure of the native workforce (and, of course, of the
immigrant in ow).

Migration has an undoubted impact on the individual or the family, no

matter the cause of migration. Many times, migrants emigrate because
they cannot live without or miss their family. This shows migration is not a
fl
fl
fl
fi
result of totally or majorly an economic factor or political factor, but rather
on emotional terms and attachments.
REFERENCES

1.https://docs.google.com/presentation/d/
1kJWhsLNQMO_R1KqnkPcYgbkNAGiiDSefEqF77c9yb1s/
edit#slide=id.g21395c8138c_0_21
2.https://www.iom.int/sites/g/ les/tmzbdl486/ les/
our_work/ICP/IDM/Labour-Migration-Infosheet-2008.pdf
3. https://www.migrationdataportal.org/themes/labour-
migration
4. https://www.iom.int/labour-migration
5. https://migrationobservatory.ox.ac.uk/resources/brie ngs/
the-labour-market-effects-of-immigration/
6. https://academic.oup.com/ilj/article/50/4/532/6383050
fi
fi
fi