FREE INTERNATIONAL UNIVERSITY OF MOLDOVA

ECONOMIC SCIENCE
DEPARTMENT BA, REI, TOURISM

ALFIOROVA IRINA
INTERNATIONAL LABOR MIGRATION BETWEEN COSTS AND
BENEFITS
DIPLOMA PROJECT
365.1 International Economic Relations

Autor:
student gr. E31A,
nvmnt cu frecven la zi
ALFIOROVA Irina
________________
(semntura)
Conductor tiinific:
AU Nicolae, dr. hab., prof. univ.
________________
(semntura)

Admis la susinere
ef catedr BA, REI, TURISM
N. Burlacu, dr. hab., prof. univ.
(numele, prenumele, gradul tiinific)

__________________________
(semntura)

____ _________ 2015

Chiinu, 2015

CONTENS
ANNOTATION..............................................................................................................................3
ADNOTARE...................................................................................................................................4
LIST OF ABBREVIATIONS........................................................................................................5
LIST OF ILLUSTRATIONS........................................................................................................6
LIST OF TABLES.........................................................................................................................7
INTRODUCTION.........................................................................................................................8
CHAPTER 1. THEORETICAL ASPECTS ABOUT INTERNATIONAL LABOUR
MIGRATION...............................................................................................................................10
1.1.

Immigration and Emigration concepts, migration policies......................................10

1.2. Classification of the types of international labor migration and migrants.................18

CHAPTER 2. ECONOMIC RESEARCH, COSTS AND BENEFITS ESTIMATION.........20
2.1. Main centers of labor emigration and immigration......................................................20
2.2. Influence of the international labor migration on labor market..................................30
2.3. Costs and benefits of international labor migration......................................................34
CONCLUSIONS AND RECOMMENDATIONS.....................................................................41
BIBLIOGRAPHY........................................................................................................................43
PROJECT ORIGINALITY DECLARATION
GRAPH OF PROJECT EXECUTION
FISA DE EVALUARE

ANNOTATION
The aim of the diploma project: Identifying costs and benefits of international labor
migration. Objectives: to describe the theoretical basis of labor migration as a form of
international relations, to discover the main reasons for international labor migration, to identify
immigration and emigration countries, to provide solutions to stop illegal migration.
Results: Revealed features of international labor migration, was developed a draft of
benefits and costs the country may have from labor migration, were identifyed the areas of
migration and modern centers of gravity of workforce.
Conclusions and recommendations: The main reason for this research was a need to
understand and distinguish the costs and benefits of international labor migration. Certain
analyses concerning the main reasons and consequences of migration as for the accepting and
sending countries were carried out.
So as it was shown above, the international labor migration arises because of a certain
contrast in levels of economic and social development of the states. At the same time, the world
practice shows that labor migration provides undoubted advantages to the countries both
importing workforce, and exporting it. But thus arise certain social and economic issues.
The import country faces the deterioration of demographic situation, deficiency of
professional labor and the growth of inflation because of workforce outflow. However, the
decrease of unemployment and investments into the donor country economy will promote the
improvement of economic indicators. The convergence of compensation levels in the donor
countries and the recipient countries can reconcile these ambiguous consequences of labor
migration. Similar levels of salaries smooth and harmonize the costs and benefits of labor
migration, gradually leveling economic development of the countries.
The author: Irina Alfiorova
The title of diploma project: International labor migration between costs and benefits
Speciality: 365.1 - REI
Place of defence: Chisinau, ULIM
Structure: Introduction, Two chapters, Conclusions and recommendations, 21
bibliography sources, 41 pages of text (up to the bibliography), 11 figures and 5 tables.
Tags: remittances, mobility, work, citizenship, ability, placement, migrant, wage, salary,
foreigner, laborforce.

ADNOTARE
Scopul proiectului de diplom: Identificarea costurilor i beneficiile migraiei
internaionale de munc. Obiective: Descrierea teoriei de baz a migraiei forei de munc ca o
form a relaiilor internaionale, a descoperi principalele motive a migraiei internaionale de
munc, indentificarea arilor immigrate i emigrate, pentru a oferi soluii de a stopa imigrarea
ilegal.
Ca rezultat: Dezvluind problemele migraiei internaionale de munc, au fost elaborate
un ir de beneficii care rile le pot avea de la migraia internaional, au fost identificate
domeniile migraiei i principalele centre a forei de munc.
Concluzii i recomandri: Principalul scop al acestei cercetri este nevoia de a nelege
i a distinge costurile i beneficiile migraiei internaionale a muncii. Anumite studii cu privire la
principalele motive i consecine ale migraiei au fost efectutate.
Cum a fost spus mai sus, migraia internaional a muncii apare din cauza diferitor nivele
de dezvoltare economic i social. n acelai timp, practica mondial arat c migraia forei de
munc ofer avantaje incontestabile fa de trile att importatoare a forei de munc ct i
eportatoare. Dar n acelai timp apar anumite aspect economice i sociale.
rile importatoare de for de munc se confrunt cu deteriorarea situaiei demografice,
deficit de for de munc profesional i creterea inflaiei, cauz fiind emigrarea forei de
munc. Cu toate acestea, scderea omajlui i a investiiilor n ecoomia rii donatoare va
promova mbuntirea indicatorilor economici. Convergena nivelurilor de compensare n rile
donatoare i a rilor beneficiare pot aduce la sfritul acestor consecine privind fora de munc.
Nivele similare de salarii aduc la armonizarea costurilor i beneficiile migraiei forei de munc
care treptat aduc la dezvoltarea economic a rilor.
Autor: Irina Alfiorova
Titlul proiectului de diplom: Migraia Internaional a forei de munc ntre costuri i
beneficii
Specialitatea: 365.1 - REI
Locul de aprare a practicii: Chiinau, ULIM
Structura: Introducere, Dou Capitole, Concluzii i Recomandri, 21 de surse
bibliografice, 41 pagini de text (pin la bibliografie), 11 figuri i 5 tabele.
Tags: remitene, mobilitate, loc de munc, cetenie, abilitate, plasament, imigrant,
salariu, strin, for de munc.

LIST OF ABBREVIATIONS
AIDS- Acquired Immune Deficiency Syndrome
CIS- Commonwealth of Independent States
ESR- Economic Self Reliance
GDP- Gross Domestic Product
GNP- Gross National Product
ILO- International Labour Organization
IMF- International Monetary Fund
MNC- Multinational Corporation
NIS- Newly Independent States
OPEC- Organization of Petroleum Exporting Countries
UAE- United Arabic Emirates
UN- United Nations
USA- United States of America

LIST OF ILLUSTRATIONS
Pic. 1.1. State institutions involved in solution of labor migration problems....15
Pic. 2.1. Top 6 countries with the highest number of immigrants (2013).21
Pic. 2.2. Sources of Moldavians income, 201225
Pic. 2.3. Labor immigrants in Gulf States.28
Pic. 2.4. 12 recipient countries with the biggest amount of remittances in 2013..31
Pic. 2.5. 12 countries with the greatest relative volume of remittances in 2012, % of GDP of the
respective countries....32
Pic. 2.6. Remittances to the former federal republics of the USSR in 2012, % of GDP of the
respective countries33
Pic. 2.7. Positive consequences of labor migration for recipient countries...35
Pic. 2.8. Negative consequences of labor migration for recipient countries.36
Pic. 2.9. Positive consequences of labor migration for sending countries38
Pic. 2.10. Negative consequences of labor migration for sending countries.........39

LIST OF TABLES
Table 1.1. Emigration and Immigration definitions...10
Table 2.1. Classification of Migrants, 5 main types...19
Table 2.2. Population of Gulf States (2013)...27
Table 2.3. National and Non-National Employed Persons Kingdom of Bahrain28
Table 2.4. Number of workers deployed by destination, 2012...30

INTRODUCTION
Relevance of a subject of the project. The phenomenon of international migration is not
new. But even today, in order to determine the exact volume of the international movement of
such an important factor of production seems to be quite difficult.
It is important to study the phenomenon of migration while it can be regarded as a very
specific element - the reproduction of the population that, of course, does not exclude,
considering the migration from neighbouring fields of knowledge geography, for example, that
studies patterns of human sttlement.
Generally, under the reproduction of population is understood only in the process of
generational turnover of their socio-economic conditionality. While the population, as well as its
composition, is considered as a subject to constant change.
At the same time, duration of unemployment usually gives a more accurate assessment. It
may indicate the rapid spread of some technological innovations that may cause dynamic
changes in the labor demand structure and so its intensive migration, high mobility of labor
market, the existence of effective information systems about different vacancies, retraining of
workers and others.
Labor migration is also understood as an international division of labor which is the
highest stage of public territorial labor division development between the countries, that provides
a stable concentration of production of products in certain countries.
Simple interpretation of the international labor division as the separation of certain
human activity types does not necessarily imply its endorser cooperation - based on international
division of steady labor exchange between the countries and products which produced by them
with greater economic efficiency.
This cooperation happens to be in two forms: the international exchange of goods
(i.e.international trade), that is produced on the basis of labor division or that is produced on the
basis of inter-state movement of labor which is International Labour Migration.
Also, migration is an important part of mankind history because it is connected with
settlement process, agricultural land development, education and racial mixing, products
capacity development, peoples and languages movement.
Gaining ethnosocial and ethnopolitical character in recent years, the phenomenon of
migration introduces some changes in local societies lives, it also changes personal
characteristics of those who have to move to other territories for better life and better future.

Within the XX century the intensive expansion of migratory streams was observed, so to
the end of the century the phenomenon of migration became a factor of all global problems. Due
to this fact, it demanded new approaches to the migration policy that promote achievement and
maintenance of balance of interests of those participating in regulation of migratory processes.
Relevance of migration research at the universal level is caused following circumstances:
-expansion of legal framework and emphasis of attention of the international public on a
perspective of human rights to which, of course, belongs the right of free movement
-the ripened need of migration analysis, taking into account its purposes, tasks and the
contents in concrete regions and also extent of its impact on other spheres of public relations
-change of social and political parameters of political development, acceptance and
implementation of new laws striking the rights of the population
-need of scientific judgment and understanding of a socio-political orientation of the
relations between migrants, as well as between migrants and local population.
Consequences of migration are shown in various spheres: political, economic, social,
cultural, psychological and others. Moreover, these consequences have both positive and
negative aspects, thus becoming a source of conflicts. All this defines the relevance and
importance of studying the problems of political and legal regulation of labor migration.
The aim of the diploma project. Identifying costs and benefits of international labor
migration.
On the basis of the aim of diploma project the following objectives were set:
- to describe the theoretical basis of labor migration as a form of international relations
- to discover the main reasons for international labor migration
-to identify immigration and emigration countries
-to provide solutions to stop illegal migration.
Research methodologies. Here are the following scientific methods of research that formed
a methodological basis of writing the diploma project: standard method, logical analysis,
comparative, statistical, induction and deduction, graphic, quantitative and qualitative,
descriptive and analytical methods.
Review of special literature. The scientific and theoretical basis of the degree project
were formed by works of such national and foreign authors as: Oded Stark, J.Edward Taylor,
Gaugas P., Rybakovsky L., Gaston N. and Nelson D., Rahman M., Sykes A. and others, who
described the reasons, factors and problems of migration, as well as analysed costs and benefits
of such phenomenon as international labor migration.

CHAPTER 1. THEORETICAL ASPECTS ABOUT INTERNATIONAL LABOUR

MIGRATION
1.1.
Immigration and Emigration concepts, migration policies
International labor migration is subdivided into immigration and emigration.
Table 1.1. Emigration and Immigration definitions [developed by the author]
Immigration

entrance of able-bodied population in

a certain country from another one.

Emigration

departure of able-bodied population

from one certain country to another one.

Emigration represents an independent decision on resettlement of a person or a family,

unlike the forced relocation like eviction from the country or deportation. The emigration reasons
are different, the examples are: war, hunger, poverty, ethnic conflicts, political repressions,
natural and environmental disasters, family reunition, national, religious or social discrimination,
the impossibility of getting education or a job, difficulties in the implementation of professional,
economic and other personal and family plans in the country of accommodation.
Immigration is a process when foreign citizens entry into the country for the purpose of
long stay in it, and, as a rule, obtaining its nationality. It has a considerable impact on dynamics,
age, sexual and ethnic structure of the population.
An immigrant is a person, who goes to another country on a permanent residence, for the
purpose of obtaining its nationality. The United Nations recommends to define the immigrant as
the person who left country of the last residence and arrived to the other country for more than
one year. However, such definition of the immigrant of the UN doesn't find universal recognition
yet in spite of the fact that they work on the unification of national definitions since 1970. In the
late eighties the Statistical committee of the European Union (Eurostat) joined this work too.
Many countries have their own features and criteria of immigrant definition. For
example, in Germany the immigrant is considered "the person who crosses the border with an
intention of settling in the country", while in Japan immigrants are "national citizens and
foreigners who come from abroad", there is another definition of immigrant in the USA: "the
person going to the country irrevocably for the purpose of subsequent obtaining the American
nationality", and in Israel and Canada immigrants are "people going to the country for the
purpose of continuous accommodation".
So, there are more various definitions of this phenomenon worldwide.
10

Immigration is defined by social, economic, military-political, national, religious,

geographical, demographic and other reasons.
The process of international labor migration is regulated by the national legislation and
international legal acts of different countries. There are two tendencies that reflect in the
legislation: the first one is an open economy, and respectively free movement of laborforce; the
other one is protectionism, which implies restrictions in the field of international migration.
The majority of the developed countries have certain migration protectionist policy urged
to protect citizens interests. So, in the USA, since 1995, no more than 675 thousand people are
annually allowed to immigrate. The law also has a quota for people emigrating from the USA,
which is 140 thousand people a year [3, p.22].
Due to the political and demographic instability in the nineties, the complication of
adaptation process and employment of immigrants, many European countries also toughened the
immigration legislations. So, for example, in 1993, France has limited the entrance of new
immigrants. Similar changes of the immigration legislation were also made by Austria, Italy,
Spain and Portugal.
Thus, national migration policy is developed in every country. Migration policy is a
complex of legislative, organizational and other measures which are directed to regulate the entry
into the country and departure from the country, as well as granting and deprivation of
nationality or other status of residence. Migration policy is also supposed to regulate the flows of
refugees and to create a system of migrants social protection.
The International Labour Organization defined certain purposes of export countries
emigration policy:
-emigration of labor force has to promote unemployment reduction
-remmitances from emigrant workers are good for export-import transactions balance
-there should be provided a corresponding standard of living to emigrants abroad
-the requirement to the emigrants of coming home, combined with the acquisition of
professions and education.
As a rule, people, who left their country and emigrated to another ones, send home a
considerable part of their income gained abroad as remittances. According to the worldbank
website, the largest payments of labor income to private nonresident persons are from:
-Switzerland
- Germany
-Italy
-Japan
11

-Belgium
-the USA [20].
Developing countries like the Republic of South Africa, Israel, Kuwait and Malaysia use
foreign labor most actively. But still, the largest private character transfers are mostly made by
developed countries like the USA, Japan, Germany and Great Britain. A lot of remittances come
from new industrial and oil-extracting developing countries too, the examples are: Korea, Saudi
Arabia, Venezuela.
In many developing countries, the transaction scales of private character make about 25%
or even 50% of commodity export income; here are such countries as: Bangladesh, Morocco,
Egypt, Jamaica, Malawi, Greece, Pakistan, Portugal, Sudan, Sri Lanka, Turkey. In Jordan and
Yemen, for example, the remittances reach to 10-50% of the GNP.
In addition to this, labor export is considered as an important source of foreign currency
to the country.
According to the IMF, the average rate of return when exporting goods makes 20%, it
makes 50% from exporting services, and the percentage from labor export is much higher. For
the last 15 years labor export has a strong impact on Pakistan economy. The remittances to this
country are 5 times higher than the money received from export of goods and services.
Anually receiving loads of money just from this source, many developing countries began
to consider migrants remittances as the most important source of the currency income.
From the theoretical point of view, the donor countries receive benefits from labor
migration not only because remittances sent by emigrants. There are also a lot of benefits which
address to another types of income. These ones increase the cumulative GNP and favorably
affect the balance of payments.
Here are meant the direct and portfolio investments in migrants home-country economy,
less training expenditures, also, health care and some other expenses of social character which
are covered for emigrants by the other countries. Moreover, having gained experience abroad and
having improved their skills, migrants bring this experience home, therefore the country receives
additional qualificated experts.
Emigration does a very notable positive impact on developing countries economy, as the
departure of workers reduces unemployment scales. So, in the 70th, the Egyptian government
accepted certain programs that stimulated workers to emigrate to Gulf States, thus fighting
against unemployment.
Though, so called brain drain became a serious problem for the most of the developing
countries, especially for those in Africa, like Malawi, Zaire, Sudan, Zambia. However, it usually
12

happens that "brain drain" stops when the country economic situation improves. Here is an
example of the Indian scientists who returned home after they worked in American corporations
around the Silicon Valley for some years, and then became founders of a new Indian industry
development, like the creation of new computer programs.
There is a growth of donor countries influence in modern international labor migration,
while the governments understand the benefits of labor export and apply various methods of
emigration stimulation:
1. Countries emigratory policy respects the citizens rights for free movement. Some countries have
certain emigration control policy, especially in the relation of the qualified experts, an adverse
demographic situation, and also when there is a lack of laborforce in sending country. Thus they
protect donor countries interests, regulate emigration scales, as well as qualitative structure of the
emigrants.
2. In order to provide financial resources to national economy, the attraction methods of
remittances and migrant workers currency means are used. For this purpose national banks open
currency accounts under a higher interest rate for emigrants, some banks also create certain
favorable conditions for acquisition of goods and production equipment. A number of countries
directly obliges emigrant workers to transfer a considerable share of the salary received abroad
to the country of origin. The state also raises funds by introduction of obligatory deposits and
insurance to the private intermediary organizations which are responsible for

citizens

employment abroad.
3. There are certain bilateral agreements which provide economic and social guarantees and
protect migrant workers rights (on salaries, housing, food supply, medical care, etc.). Also
certain funds and presentations are organized for the purpose of control over the implementation
of the international agreements conditions, as well as the solution of controversial issues in
foreign country and observance of migrants basic rights.
In the governments of some countries there are attaches who are urged to provide
protection of the migrant workers rights, including the solution of controversial issues and
negotiating with employers abroad.
So, the labor sending countries seek to develop such a mechanism that will regulate
migration as well as protect state interests. Thus, they obligate the enterprises which are engaged
in sending labor abroad to have a license, they also create special funds which support the
migrants who came back home, they control highly skilled workers migration as well.
The countries accepting laborforce receive thus defined benefits, as first of all
competitiveness of the goods on the market owing to reduction of the production costs while the
13

price of foreign labor is lower. Also, the Organization for Economic Cooperation and
Development of ESR claims that immigrants improve a demographic picture of the developed
countries suffering from aging. In France, Germany and Sweden 10% of all newborns appear in
the families of immigrants. In Switzerland there is 24%, while in Luxembourg nearly 38% [12,
p.33].
At the same time, though the general rate of aging of the countries population is slowed
down, this statistics doesn't affect the ratio of birth rate and mortality of local population in no
way.
It is necessary to remember about some negative aspects connected with labor import,
while there may emerge elements of social tension in society (for example, when migrant
workers take all the jobs from local population), international hostility, etc.
For this reason the countries develop a certain Immigration policy. The majority of host
countries use selective approach for immigration regulation. It means that the state doesn't
interfere to entrance of those categories which are necessary for the country, limiting entrance to
those the country doesnt need at the moment. The list of desirable immigrants varies from the
country to the country, but usually they treat one of the following categories:
-

the workers, who are ready to do harmful and dirty jobs for the minimum payment, which is

construction, subsidiary, also seasonal and municipal workers are accepted;

experts for perspective branches, like programmers, highly specialized engineers, bank

employees;
representatives of rare professions - gem cutters of diamonds, pictures restorers, doctors

practicing nonconventional methods of treatment;

experts with a world name musicians, actors, scientists, athletes, doctors;
businessmen investing their capital in the accepting the country and creating new workplaces in
it.
Host countries state institutes deal with problems of labor immigration, acting on the
basis of the national legislation, and on the basis of signed bilateral and multilateral agreements.
Usually at least three state institutions are involved in problems solution:

14

the Ministry of
Foreign Affairs
the Ministry of
Justice
the Ministry of
Labour

Pic. 1.1. State institutions involved in solution of labor migration problems [developed by
the author]
In the majority of the countries the entry visa to the immigrant is issued on the basis of
the signed contract with the employer and the Ministry of Labour conclusion whether this kind
of work demands special skills, so it can't be carried out by local workers. In some countries
before issuing the entry visa to the potential immigrant, the employer is obliged to receive the
Internal Affairs Ministry approval.
Standard and legal base for the immigration in the majority of host countries is presented
by a huge number of laws and bylaws. Here are the main lines of the immigration legislation:
Professional qualification. All host countries legislations establish strict requirements to
education level and length of service in the specialty. The minimum requirement to education is
considered to be a full course of high school or technical training college that has to be
confirmed by the corresponding diploma. In most cases this diploma has to be approved or
estimated by regarding compliance of requirements in the host country.
The priority at the employment is usually given to the experts having at least 3-5 years of
length of service in the specialty. Letters of recommendation can be demanded as well.

15

Restrictions of personal character. Certainly, the legislation of host countries imposes

strict requirements to the state of health of the immigrants. The entry to the host country is not
allowed to the addicts, mentally sick people, people infected with virus AIDS.
Immigrants are obliged to submit the certificate of the health condition which is certified
by consular establishment of the host country, or they can also to pass a special medical
examination. The age qualification of the immigrants is established by the legislation and it
depends on the industry they intend to work in. Usually it fluctuates within 20-40 years.
At last, the legislative requirements are extremely strict to persons previously convicted
for criminal offenses, members of terrorist and profascist organizations.
Quantitative quoting. The majority of the countries establish the maximum quantity of
immigrants to accept. Quantitative quotas define the maximum percentage of foreign labor
among all laborforce in the country, also within separate branches, as well as there is also a
restriction on the total number of the immigrants coming to the country within a year.
Quantitative quoting is a very rigid method of immigration regulation and is usually
defined by the relevant laws and watched by law enforcement agencies.
Economic regulation. There are certain financial restrictions that provide the reduction
of immigrants number. For example, in some countries, the legal entities have the right to
employ foreign labour only when they reach a certain volume of sales or when they made certain
payments in state budget.
As well as individuals have the right to immigrate only if they are going to invest in host
country economy the sum of money that is determined by the law, also they have to prove the
legality origins of this money and to create a certain quantity of workplaces for people.
In some countries for registration of immigration and employment, the immigrants even
have to pay. But some privileges are provided for administrative board of corporations and to the
wealthy foreigners, who are going to use work of the locals in a household.
Temporary restrictions. Legislations of most countries establish the maximum terms of
stay to foreign workers on the territory of the country, on which expiration they have to leave the
host country, or they can also receive extension permission from the competent authorities. It is
commom knowledge that for the persons who have status of trainees, or status of students in the
host country, certain tough rules are eshtablished. These rules do not allow to prolong the stay
and demand an obligatory departure home, these rules also require that a student or a trainee
should stay in home-country at least for several years, and only then there is an opportunity to
get the right of arriving to the host country again.

16

Geographical priorities. Practically, each country that is accepting immigrants,

legislatively establishes some geographical and national structure of the immigration. It is
usually regulated by means of quantitative quotas on entrance of immigrants from certain
countries. Sometimes, in order to avoid charges in bias and human rights violation, the
governments do lotteries with the right to immigrate for representatives of the different countries
from one geographical region.
Prohibition. There are obvious and hidden prohibitions to employ foreign labor in some
professions. Obvious prohibitions directly show the lists of certain branches and specialties in
which foreigners are prohibited to be engaged. The hidden ones, on the contrary, establish the
lists of branches and specialties, where only citizens can work, thereby blocking the access to
them for foreigners.
Usually, an additional permission is required from the immigrants if there is any
movement, change of specialty or a place of work. It is common knowledge, that the
immigration authorities can refuse to its delivery.
Illegal immigration is certainly crossed by police methods, which, however, are not
always effective. That is why the legislatively sanctions are established. They can be imposed
both on immigrants, and on those who helps them to illegally come to the country and also on
those who employ them. Illegal penetration to the country is considered to be a crime. For those
who break the rules, deportation, fines and imprisonment is provided. The similar crime that is
committed repeatedly is punished by repeated deportation, bigger fine and longer imprisonment
terms.
The employment of an illegal immigrant is also considered to be a crime, so the penalties
provided can be so large, that they sometimes ruin even big firms and enterprises.
The economic effects of immigration are often described as negative ones, while foreign workers
reduce the quantity of workplaces and increase unemployment rates. However, it should be taken
into consideration that immigrants introduce new experience, knowledge and skills. The USA,
Canada and Australia are those countries which were resulted from immigration.
In other countries, migrants develop the whole branches of the economy as well. The
examples are: the Chinese industrial workers in Indonesia and Malaysia, Hong Kong
businessmen in Canada, the Indian and Lebanese businessmen in Africa, the Jordanian and
Palestinian employees in oil-producing countries of the Persian Gulf.
Moreover, in many countries the immigrants usually do jobs, where local population is
not willing to work. Unskilled workers from Turkey and North Africa make 60 to 80% of
immigration to such countries like Germany anf France [20]. Palestinians work hard in Israel,
17

Indonesians do in Malaysia, and Bolivians are willingly employed in Argentina. Moreover, some
branches of production wouldn't survive without immigrants. Certainly, it is impossible to deny
that there are some negative consequences of immigration too, and, first of all, the decrease of
real salaries due to the inflow of unskilled labor is among them.

1.2. Classification of the types of international labor migration and migrants

International labor migration is labor force movement from a developing country to a
developed one for a temporary employment with a following return to home-country.
The classification of the types of international labor migration can be carried out
according to different types:
1.Irrevocable - at which migrants are on the permanent residence in the host country. This
is a long-term migration and in some countries the foreigner starts being considered as the
immigrant (emigrant) if it is present (or is absent) at the country during the certain period of
time.
2.Temporary - when migration is limited to the term of stay in certain country from 1 year
to 6 years. Temporary is a short-term migration and it represents the entrance or departure
connected with the current requirements without changing of nationality and permanent
residence. However in many countries temporary migrants are eliminated by number of seasonal
workers (sometimes quite considerable).
3.Seasonal - a type of migration which is a short-term (usually within a year) for work in
such branches of economy that has seasonal nature and seasonal jobs (agricultural, tourism,
services sector).
4.Pendular - the type of migration connected with daily moving from one country to
another and then back.
5.Illegal - illegal migration means entry into the country and looking for a job while not
having a permit to work, also arrival on legal grounds and then with the following illegal
employment.
6."Brain drain" - is the unilateral migration of scientific and technical professionals to
mainly industrialized countries conducting to loss of qualified specialists of the donor countries
(scientists, sport "stars"). This is the process of mass emigration at which different experts,
scientists and skilled workers leave the country because of political, economic, religious or any
other reasons.
So, from the neutral point of view it is quite possible to consider that countries from
which there is a leakage of proffesionals have a very considerable economic, cultural, and
18

sometimes even political damage, while on the contrary, the countries that accepting specialists
emigrants acquire the huge and cheap intellectual capital. There is a similar process of exporting
financial capital abroad which is called drain of capital.
There are various reasons of labor migration. It can be some features of society and life,
ecological factors, a difficult political situation and others. In most cases the migrant can not
simply support himself and his family so all that compels them to travel in search of worthy
earnings worldwide. In certain cases these skilled experts seek to reach the maximum career
development and then go abroad.
Nevertheless, the economic reasons of labor migration are on the first place. It is a fact
that only some dominating countries own the most of world resources, while third countries
are doomed to poverty. Such situation makes migrants go abroad and look for earnings. Not
every government takes measures of regulation of labor migration at the state level, so probably
the solution of this problem wont appear soon.
Migrants are classified in accordance with International Labour Organization:
Table 2.1. Classification of Migrants, 5 main types [developed by the author]
Types of Migrants
1.Unskilled and low-skilled workers

Their characteristics
1. Labour activity on contract which
clearly stipulates allowed period of staying in
the country, usually applied to part time

2. Teaching staff and students

workers
2. Businesses with a high level of
theoretical and practical training with an

3. Illegal migrants

appropriate education
3. Foreigners with an expired tourist

4. Immigrants

visa engaged in labor activities

4. People who moved to permanent

5. Refugees

residence
5. People who are forced to emigrate
from their countries due to any threat to their
lives and activities

International statistics show that while the bunch of migrant workers are low-skilled ones,
they are employed in industry and agriculture. However, there is a constantly increasing flow of
migrant experts - higly skilled workforce employed in prestigious and well-paid positions.
19

CHAPTER 2. ECONOMIC RESEARCH, COSTS AND BENEFITS ESTIMATION

2.1. Main centers of labor emigration and immigration
Labor migration has a rich history, which ascends by the time of Great Geographical
Discoveries when Europeans started developing new lands and first of all the American and
Australian continent. However the movement of labor had a resettlement character. Originally
Great Britain, Spain and Holland wanted to move socially dangerous people like robbers and
tyrants to new lands.
Then later there was an organized settling of the American and Australian continents,
which proceeded till 30th of the 20th century.
After the World War II the labor market was created. Formation and development of labor
market is connected with migration of workforce from one country to another for temporary
jobs.
The main centers of labor immigration are countries of the American continent, first of all
the USA, Canada, and also Australia.
In modern world there are some new centers of labor immigration. These are the
countries of the European Union where depopulation exists (i.e. mortality exceeds birth rate) and
where the extinction of the nations is observed (Germany, Switzerland, Luxembourg, Austria).
Also, the important centers of labor migration are OPEC member countries, where the
highest percent of foreign labor in the oil-extracting industry is located. There is about 50% of
foreign workers in oil production in Saudi Arabia, about 80% in Kuwait and the United Arab
Emirates and also it is about 90% in Oman.
One more center of labor immigration is formed in a number of the countries of Latin
America, where the workforce is needed for new industrial states, so the countries of Latin
America attract people with technical education.
The immigration authorities dispatch a certain allotment to the consulates abroad. This
allotment includes the indication of professions which should be selected among the applicants
for labor migration.
The USA is looking for programmers, chemical engineers, physicists-mathematicians.
The most tough immigration rules are established by Australia. Besides the psychological and
professional testing, applicants are exposed to additional medical examination.

20

The main centers of a labor migration are multioccupied countries: China, Pakistan,
India, Indonesia, Bangladesh, African countries.
According to the International Labour Organization there are over 130 million of labor
migrants all over the world though about 40% of foreign workers don't pass official registration
in countries of residence so these statistics aren't considered.
According to the report of UN Department on economic and social problems from
September 11, 2013, the number of migrants worldwide made 232 million people or 3,2% of the
Earth population. The world largest migratory corridors became Mexico - the USA from 13
million migrating ( the dates are for January - August, 2013), Russia - Ukraine from 3,5 million,
Ukraine - Russia from 2,9 million, and also Kazakhstan - Russia from 2,5 million [20].

Great Britain

UAE

Saudi Arabia

Germany

Russia

USA
0

10

15

20

25

30

35

40

45

50

Pic. 2.1. Top 6 countries with the highest number of immigrants (2013)
[developed by the author with use of data 20]
Though official data on population shift does not always show a full picture of the events.
So, officially the trainees and students who arrived to other country for training aren't considered
as migrants, as well as tourists, which came to the country on a tourist visa and try to illegally

21

find a job. Also, usually nobody considers those migrants who aren't registered, despite the fact
that the purpose of their entrance is often employment in the country.
As a rule, the international immigrants are young and healthy people. Most of migrants
(about 74% of total number) are in working-age (which is from 20 to 64 years), in comparison
with less than 57% of the total number of a world's population [5, p.71].
Thus, host countries usually receive essential benefits from the inflow of able-bodied and
qualified migrants, especially when their qualification is considered and involved. Therefore, the
involvement of young and talented migrants becomes an important political task in many parts of
the world. Though migration of the qualified labor and experts with the higher education brings
benefits to host countries, it can also have negative consequences for development in countries of
origin.
These negative consequences can be especially bad for those countries which face a
serious shortage of qualified personnel, and also for those ones with rather small amount of
population. At the same time, remittances continue to be an important help for families and a
steady source of foreign currency in many developing countries.
The InterNations.org portal conducted a research among 14000 emigrants of different
nationalities to find out what countries of the world are the best immigrate in. Respondents of
165 nationalities from 169 countries of the world took part in this poll.
So, these are top-10 countries for immigration:
1. Ecuador
2. Luxembourg
3. Mexico
4. Switzerland
5. USA
6. Singapore
7. Spain
8. Philippine Islands
9. Australia
10. Hong Kong [18].
In this rating Germany took the 12th place, Canada the 14th, Great Britain is on the 21st,
while Russia is on the 54th place. Quite high position is also taken by the Czech Republic, which
has the 17th place. By drawing up a rating, the respondents estimated a complex of criteria:
simplicity of arrangement in the country, the level of income, possibilities of employment,
quality of life and education.
22

Ecuador is one the first place of this rating thanks to the "level of the income" position.
Most of the emigrants, who live in this South American country, are quite happy with the
financial position at the expense of a favorable ratio of level of salaries and life expenses.
The other important factor is the level of satisfaction with the life in general. Moving in
Ecuador does happy 44% of people, and almost all of them have a plan to remain there for the
rest of the life. One more good criteria is that week work on the average lasts only 34 hours.
If Ecuador is the country of happy immigrants, Luxembourg is a dream country for
careerists. 64% migrants in Luxembourg, according to InterNations, moved there because of the
career opportunities. People find jobs independently in Luxembourg, without the aid of agencies
or the translation in the company.
However, immigration to Luxembourg is not a long-term one: only 28% of migrants
want to remain there for a long time. The others just plan to work the contract and then leave.
The striking contrast with Ecuador is evident, while Luxembourg took only the 50th place from
61 on the level of personal happiness. Besides, many immigrants complain that it is hard to make
friends in Luxembourg and the situation for visitors is not the most hospitable one. And still,
almost all of them consider that housing in Luxembourg is too expensive.
91% of immigrants in Mexico are happy with their life, 44% of them intend to remain
there for the rest of the life. The reason of moving to Mexico most often is employment or
romantic relations with the inhabitants of this warm country [18].
To sum it up, according to InterNations, the best countries for labor immigration are
Norway, Luxembourg, Germany and Switzerland. The first ten countries with good opportunities
of employment are also Austria, Denmark and Sweden.
Moldova as an example of labor export country
The Republic of Moldova proclaimed its independence in 1991. Being independent, the
country of Moldova initiated some economic and social reforms in order to transit to the market
economy. Some relevant changes were achieved, but in spite of the initial estimates, the expected
results werent attained. Moreover, it led to deepening economic crisis, a catastrophic living
standards decline, and insecurity. Emigration of a large part of able-bodied workforce has
diminished country human resources considerably. Every year more and more experts, doctors,
scientific researchers, school teachers and academics leave the country in search for a better
place to live.
The reason for this brain drain is poverty first of all. For example, in 2002, the rural
poor counted for 72.6 of the very poor inhabitants of the country [7, p.348].
23

In 2002, over 40% of the country population lived below the poverty threshold. This
generated some serious social and economic problems, from fall in the natural birth to growth
rates of massive migration, which was about 35-40% of total economically active population [7,
p.349].
Among European NIS countries, Moldova has one of the highest levels of emigration.
According to the data from the Department of Migration, between 1990 and 2003 years,
the total number of people who left Moldova and went to foreign countries for the purpose of
work was about 600,000, or 37% of economically active population [19].
Moreover, some experts consider these numbers to be much higher than figures that are
given in national statistics, because a lot of citizens have left their country with soviet passports
of the former USSR, so a tourist visa, illegally remaining abroad when their visas expired. The
destinations Moldavian citizens were going to are listed below:
-Italy
-Turkey
-Estonia
-Greece
-Portugal
-Israel
-Romania.
Nowadays, the national bureau of statistics informs that the living wage for a person in
2014 averaged 1627 lei a month, which is 0,9% more than in 2013.
The population expenses in 2014 averaged 1816 lei a month for a person, having
increased by 2,3% in comparison with 2013 [19].
Yet, pensioners and other socio-vulnerable segments of the population do not have at
least these 1627 lei which is a living wage for a person. Some of these people cant work and
dont have any help from relatives or friends, so they have to put up with their miserable
lifestyle, while many of them choose to ask for money in the streets. While they do not have any
opportunity to earn money to sustain themselves, they have to hold out. Yet, there is also ablebodied population, willing to work and looking for the best opportunities. Unfortunately, most of
them find these opportunities somewhere far away from home-country, because whether there
are no suitable jobs in Moldova, whether the employers pay so little, that the workers can not
afford to have a comfortable life and they cant provide their families with things.
This is the reason Moldova is on the 6 place among the countries of the CIS by number of
the migrants who went to the territory of the Russian Federation for the purpose of work. This
24

information is announced by officials of Federal Migration Service of the Russian Federation. By

data for April 2015, there are 553,2 thousand of Moldovan citizens in Russia. This is 5,1% from
the total quantity of migrants there [19].
Usually, a Schengen visa or a tourist visa, or also an invitation is needed to emigrate.
There are more than about 300 private agencies in Moldova, providing people with such
services, but actually, they are only contributing to brain drain and labor emigration.
A lot of people, who have left the country for tourism purposes, often remain abroad
illegally, looking for work. While working abroad, people get used to high salaries and better
life, so coming home and getting 2000 3000 MDL salary doesnt suit them. At the same time,
many people leave their families in Moldova, but send them currency means from abroad, which
are remittances.

social privileges 20,2%

other income 21,9%

(including remittances
17,6%)

income from property

0,1%

activity for payment 41,6%

individual economic
activity 9,5%

individual non-economic
activity 6,6%

Pic. 2.2. Sources of Moldavians income, 2012 [developed by the author with the data 19]
Remittances are an important source for people's budget. On the average, it represents
17,6% from the total income, so it's 0,3% more in comparison with 2013 [19].
The emigration of Moldavian skilled workers and professionals destabilizes the internal
labour market, as well as creates some serious difficulties for Moldovas accession to the
European Union. At the same time while working in another countries, the citizens of Moldova
gain the necessary skills for working in a market economy.
Emigration is also considered to be a financial resource for the national economy, and a
mean for maintaining the stability of national currency.

25

Although, the labor export has some positive effects for the countrys problems, the
officials become more and more aware that labor migration, especially illegal one, impedes the
stabilization of Moldovas labor market and leads to decreasing revenue in terms of social funds.
High unemployment rates in Moldova are not only because of a large number of young
people who can not find a job, but also because of those people, who have been made redundant
due to the company restructuring or insolvencies.
So, the intellectual exodus from Moldova has the following causes:
-

the economic crisis and unfavourable business environment

political instability
poverty and unemployment
the lack of jobs, that correspond to young peoples qualifications
limited opportunities to the young
limited social protection
low salaries, as well as and payment delays
low living standards
limited access to education and health care services.
Lack of jobs still remains the most important factor that determines brain drain, even in
those periods when some economic growth is registered.
The analysis of brain drain, that has been increasing in the country of Moldova, leads to
the conclusion, that a huge number of institutional measures are needed in order to reduce the
emigration of intellectual labor force.
Here are some recommendations at the institutional level:
1. To optimize working conditions of scientific researches, teachers and recent graduates
from higher institutions;
2. To stimultae employees by providing them with supplementary income and bonuses
in accordance with their results.
And at the national level:
1. To improve the normative framework in Moldova that regards to its intellectual labor
force;
2. European integration, which will benefit to economic reforms and social protection;
3. To implement certain state programs that ensure economy growth and poverty
reduction;
4. To strengthen the infrastructure that is connected with social services in order to help
people with low income;
5. To fight against corruption at all levels;
6. To introduce an effective mechanism that will locate employment for graduate
students.

26

To sum it up, Moldovas progress towards a better future is possible only through a huge
socio-economic transformation, which is going to lead to a market economy, free initiative and
competition. Social problems of the last decade have considerably worsened the population
living standards. If as much as possible activities are centered on living standarts improvement,
brain drain will be directly reduced.
Also, the political stability and efficient government should also help to reverse the
phenomenon of brain drain from the Republic of Moldova.
Persian Gulf countries as an example of labor import countries
By the end of the XX century, some new world labor markets were added to the
traditional immigration centers like the USA, Canada and Australia.
These are oil-producing countries of the Middle East, Argentina and Venezuela in Latin
America, as well as the richest African states.
According to the UN, 12,8 million foreigners live today in six coastal Gulf States Bahrain, Qatar, Kuwait, Saudi Arabia, the United Arab Emirates, Oman. In general, their number
makes 34-40% of all population of this subregion of the Middle East and nearly 70% of its
laborforce [20].
Country
Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
United Arab Emirates

Nationals
527,433
1,023,316
1,781,558
122,779
16,527,340
825,495

Non-nationals
511,864
2,159,644
559,357
543,730
6,150,922
3,280,932

Table 2.2. Population of Gulf States (2013) [21]

However, for monarchy of the Persian Gulf this high percent of immigrants among
economically active population is very beneficial. Meanwhile, oil-extracting monarchy of the
Middle East has considerable problems connected with inflow of foreign workers.
So the governments of these countries are taking measures in order to decrease
unemployment rates among citizens.
This is done by the programs of labor nationalization, replacement of foreign workers
with locals (so-called programs "omanization, "saudization", "emiratization", etc.).

27

90

50

Pic. 2.3. Labor immigrants in Gulf States [21]

Today, by different estimates, foreigners make about 18% of the population of Oman,
30% of the population of Saudi Arabia, about 33% of the population of Bahrain, more than 50%
of the population of Kuwait, about 80% of the population of Qatar, 90% of the population of the
United Arab Emirates (the statistics in general doesn't reflect illegal immigration as a result of
which the number of migrants considerably exceeds official data).
Table 2.2. National and Non-National Employed Persons Kingdom of Bahrain [21]
Year

2011
2010
2012
2013

No. of

No. of

Total

Percentag

National

Non-National

e of National

Employed

Employed

Employed

Persons
122,333
129,210
130,129
140,096

persons
244,192
273,107
309,045
365,670

366,625
402,317
439,174
505,766

Persons
33
32
30
28

The visitors in Gulf States are, first of all, labor immigrants. In total, they make more
than 35% of labor in Saudi Arabia, 44% of labor in Bahrain (informally 50-60%), 80% of labor
in Kuwait, about 90% in Qatar, more than 90% in the United Arab Emirates. Indicator in Oman
is 24% (due to successful omanization programs).
Labor demand in these countries is caused by such factors as shortage of qualified
specialists and the restrictions on women employment (among all the citizens participating in
economic activity, women make 2-10%) [21].
28

Inflow of immigrants is also stimulated due to development of infrastructure in the

Persian Gulf, as well as increase in demand for durable goods, education services and health
care. Foreign workers are mainly occupied in private sector, while citizens generally work in
public sector of the economy (sphere of finance, oil production, telecommunication
technologies), so it is possible for locals to receive high income and privileges. Work in the
private sector is less prestigious.
Asians make more than a half (about 65%) of immigrants in the Persian Gulf, the others
are generally Arabs. India is on the first place considering the number of immigrants from the
Asian countries, while there are 4,5-5,0 milliom labor immigrants there, including 1,8 million in
the United Arab Emirates. Pakistan is on the second place - about 2 million people, then there are
Egyptians - about 1,5 million, citizens of Philippines - 1,1 million, Yemen - more than 1 million,
Bangladesh - 1,0-1,8 million, including about 700 thousand in the United Arab Emirates, Sri
Lanka - about 600 thousand, Indonesia [21].
In Saudi Arabia the share of Arabs in the foreign population makes about 38%, in Kuwait
34%. In Qatar this indicator makes from 20 to 25% (Jordanians, Palestinians, Egyptians), in the
United Arab Emirates 10-11% (generally Egyptians, Jordanians, Palestinians), there are less
than 10% of Arab immigrants in Oman and Bahrain [21].
Besides, despite the high level of control of labor immigration, the large number of illegal
immigrants get to the Gulf States. Annually there are from 350 thousand to 400 thousand illegal
immigrants, that come to UAE.
Proceeding from the data stated above, it is possible to conclude that the United Arab
Emirates is one of the most important center of labor immigration today. More than 50% of the
country population are citizens of Oman, Saudi Arabia, Bahrain, Kuwait, Qatar. Recently, the
problem of illegal immigration appeared in the United Arab Emirates. Violation of foreign
workers rights is also one of the most widespread problems of the Arabian monarchy. It often
happens that employers take the immigrants passports away, as well as a third to a half of
earnings. Therefore, an active policy of toughening migration measures is conducted in United
Arabic Emirates.

2.2. Influence of the international labor migration on labor market

29

Emigration as well as immigration render contradictory consequences both for the donor
countries, and for the recipient countries, because the international migration of labor has
contradictory impact on these countries. It must be kept in mind that international labor
migration is a not only economic, but it is also a difficult political, social and economic
phenomenon. It considerably influences the structure of workforce for both donor and recipient
countries, it aslo creates a new situation in labor markets, introduces many changes (and not only
positive ones) in social and political life of many host countries.
Table 2.4. Number of workers deployed by destination, 2012 [5, p.30]
Destination

Males

Females

Both sides

136
899
481
3
1.450

6.081
8.308
8.136
8.090
9.485

82

2.929

3.011

2.787
2.476
12.264
4.744

396
1.163
455
682

3.183
3.630
12.719
5.426

Middle East
Qatar
UAE
Israel
Libyan Arab
Other

5.945
7.409
7.655
8.087
8.035

Asia
Hong Kong,
China
India
Malaysia
Singapore
Other

Europe

Finland

1.599

353

1.952

Sweden

2.913

416

3.329

2.291

2.156

4.447

66.290

11.519

77.797

Other
Total

Immigration, in particular, can cause a number of the problems connected with ethnic,
racial, religious and cultural differences of immigrants from indigenous people. As we can see in
table 2.4. there is totally different workforce structure in different countries, primary because of
religion, beliefs and cultural particular qualities.
This identifies that in some countries women have to work less and do not need to work
at all, and all jobs are taken by men. The examples of such and other features are practically in
all host countries.
The international migration has economic consequences for both recipient country and
for the sending country. In the USA and Australia it is generally considered that the host
30

country wins, eventually the other countries have a different view on this situation. The opinions
about the benefits of migration differ depending on the type of migrants (whether its qualified or
unskilled labor), it also depends on the condition of labor market in the sending and recipient
countries.
About 70% of their universal volume of remittances are the share of 20 largest countries
recipients (in 2012 - 69%, in 2013 - 68%). In recent years about a third of global volume of
remittances are from India, China, Philippines and Mexico. In 2012-2013 more than 60 billion
US dollars came to India and China [8, p.151].
In year of 2013 the list of the countries with the highest rate of remittances are: India (71
billion US dollars), China (60 billion US dollars), as well as other developing countries Philippines (26 billion US dollars), Mexico (22 billion US dollars), Nigeria (21 billion US
dollars) and Egypt (21 billion US dollars) [pic.2.4.]. These countries have more than a half
(53%) of all the money transfers sent to developing countries worldwide.
South Corea
Vietnam
Spain
Belgium
Germany
Bangladesh
Pakistan
Egypt
France
Nigeria
Mexico
Philippines
China
India
0

10

20

30

40

50

60

70

80

Pic. 2.4. 12 recipient countries with the biggest amount of remittances in 2013 [6, p.58]
Along with it, the largest recipient countries of money transfers among developed ones
are: France, Germany, Spain, Belgium and South Korea, - to which these financial streams come
generally from the other developed countries. However, being powerful on the absolute value,
these means are insignificant for these countries in relation to the volume of the gross domestic
product (GDP), making from 0,4 to 0,8% of the GDP and only in Belgium more significant size
2,1% of GDP [6, p.93].
31

In developing countries, remittances sent by emigrants, on the contrary, are very essential
in comparison with the total amount of GDP [pic.2.5.]. The money transfers which are sent by
migrants to Tajikistan are equivalent to nearly a half of GDP, in Kyrgyzstan it is almost a third, in
Nepal and Moldova it is nearly a quarter.
Gambia 15,4%
Gonduras 15,7%
Salvador 16,5%
Cosovo 17%
Livan 17%
Liberia 20,4%
Armenia 21,4%
Moldova 24,5%
Nepal 24,7%
Kyzgyzstan 31,4%
Tajikistan 48,1%
0

10

15

20

25

30

35

40

45

50

Pic. 2.5. 12 countries with the greatest relative volume of remittances in 2012, % of GDP
of the respective countries [6, p.62]
Besides already listed countries - the former federal republics of the USSR, this group
aslo includes Armenia and Georgia [2.6.]. The volume of remittances to Armenia exceeds 20%
of GDP and to Georgia - 10% of GDP. The volume of money transfers to other former federal
republics of the USSR doesn't reach 5% of GDP.

32

Kazahstan 0,1%
Russia 0,3%
Belorussia 1,6%
Estonia 1,7%
Latvia 2,8%
Azeyrbadzhan 2,9%
Lithuania 3,6%
Ukraine 4,8%
Georgia 11,1%
Armenia 21,4%
Moldova 24,5%
Kyrgyzstan 31,4%
Tajikistan 48,1%
0

10

15

20

25

30

35

40

45

50

Pic. 2.6. Remittances to the former federal republics of the USSR in 2012, % of GDP of
the respective countries [6, p. 64]
* Turkmenistan, Uzbekistan - no data.
To put it in a nutshell, India, China and Mexico become undisputed leaders. Money
transfers to China and to India continued to accrue quickly. Growth remittances to Philippines
proceeded, but it was more moderate.

2.3. Costs and benefits of international labor migration

The immigration plays a key role in the development of the states, it also has an essential
impact on the population. Here are distinguished the key parameters of the population of the
country:
1.
2.
3.
4.

Ethnic structure.
Age and sexual structure.
Number.
Dynamics.

Each immigrant who arrived to the country (both legal and illegal) has a considerable
impact on all these parameters. Such countries as the USA and Canada were founded almost
completely thanks to the immigration. However, the history remembers some cruel oppositions
between early and late waves of the immigration. Its enough to remember about the USA in the
end of the 19th century. At that time so-called "indigenous" Americans who arrived to the
continent slightly earlier, clashed with the immigrants arriving to the USA from Ireland.
33

Practice showed that if the immigration is taken under control, each immigrant will be
able to bring benefit to the state. For example, as it was made in Germany and Israel, where there
are some effective programs of repatriation, and every migrant returns home regardless of
capacity and age.
It is difficult to overestimate the importance of immigration in such countries as Australia
and New Zealand. The governments of these countries constantly invite foreigners to immigrate
for the purpose of receiving residence permit and nationality, with the subsequent legal
employment. By itself, the government invites to immigrate so the called "white" immigrants,
who are going to work officially and constantly pay taxes.
It goes without saying that immigration has a lot of positive influence on host countries.
It is written much about the process of "brain drain", which for example, benefits for economy of
the USA. It is enough to tell that 40% of immigrants who came to the USA in the 80th are
doctors of science in the engineering field and computer disciplines. Also, 25% of technical
disciplines teachers in institutes are immigrants too. In the nineties more than 11 million
immigrants lived in the USA. By estimates, they earned $240 billion a year. Thus they paid
taxes of $90 billion a year.
Its clear that the return from immigrants is very high, even if we think only in the terms
of money. Let alone the

contribution which is made by highly skilled immigrants in

development of science, medicine and arts, which is immeasurably higher.

As well as any social phenomenon, migration has the its costs and benefits. Emigration
reduces pressure upon sending country labor market, while reducing unemployment. Labor
migrants, as a rule, send a considerable part of the earned money home, providing remittances.
Migration gives the chance of using the educational potential of the qualified foreign workers
without any costs of preparation to the recipient country. Lower all the costs and benefits will
considered in more details.
Positive consequences for recipient countries:
One of the positive consequences of foreign labor inflow for recipient countries is that the
foreign labor is qualified and this recipient country didn't spend neither financial means, nor
school hours for workforce preparation and education. Moreover, there is an economy on salaries
too, while foreign workers are usually paid less than native workers.
Also, foreign workers participate in the creation of economic product in the country of
residence. At the same time there is another positive factor too, while the capacity of domestic
market of consumer goods extends at the expense of the immigrants.

34

In a number of economically developed states and, first of all, in the European Union
countries, the migrants are quite often engaged in unskilled types of work on low-wages. To earn
the money these people do some not really prestigious jobs, they work like builders and general
workers, are engaged in service industry, public catering, public transport. So this helps to fill the
vacancies in some branches of the economy, that are not very prestigious.
Attraction of poorly educated, unskilled labor creates the opportunity for local population
to be engaged in a more intellectual work.
Here are more positive consequences for recipient countries:

Increasing the
competitiven
ess of
production

while there are more people working in certain

branches of the economy and the production
costs are reduced

Increasing in
tax revenues

while migrants work and benefit the economic

situation, they also pay taxes to the
government. Foreign workers aren't provided
with pensions and not considered at
implementation of social programs.

Improvement
of a
demographic
situation

immigration also provides some rejuvenation

of the population, as the average age of
migrants most often is less, than the age of
indigenous people. To that, immigrants usually
have more children.

Pic. 2.7. Positive consequences of labor migration for recipient countries [developed by the
author]
There are some negative consequences for recipient countries too:
It happens that mass inflow of foreign workers complicates unemployment rates, housing
problems and makes the general level of salaries lower. Due to that there is a discontent of
indigenous people and emergence of the social tension elements. Here comes the emergence of
discrimination in relation to foreigners and international hostility.
Recently, the illegal labor migration increases. The illegal immigrants are trying to
remain in the host country as much as it is possible, especially after their employment contracts
end. The worst part of is that sometimes they are involved in shadow economy, including traffic
in arms and drugs.
Illegal immigration is the worst factor in consideration about the costs and benefits the
country may have. Illegal migration doesnt have a good influence on the budget of any state.
35

This is why the public regularly demands to reconsider and toughen the immigration laws. The
foreigners who illegally crossed the border and who are informally employed, don't bear any
advantage to the country but on the contrary, bring notable losses.
From year to year the migrants are taking home loads of cash which they earned illegaly
in the host country. And these indicators are only growing, while the foreigners continue to
immigrate.
Its self-evident that phenomenon of illegal immigration needs to be considered more
carefully, while its important to know the reasons of it and the consequences it may bring to host
countries.

Moral and
cultural
environment
Unemployme
nt, lowering
level of
salaries
Illegal
immigration

the mass inflow of foreign labor complicates the moral and

cultural environment. It happens because migrants have
absolutely another culture, religion, beliefs, customs, traditions
and mentality.

migration is usually followed by strengthening of

unemployment and lowering of the general level of salaries,
while the immigrants are ready to work for a low wage.

they don't pay taxes

they use medical care which is paid by the citizens of the
country
they send their children to school which is also at the citizens
expense
they also reduce wage standards, thus taking local citizens
workplaces

Pic. 2.8. Negative consequences of labor migration for recipient countries [developed by
the author]
Illegal migration is a type migration that violates the migratory legislation of a country.
There are the following categories of illegal migrants:
-

the foreigners going to the country or being in its territory already without any

identification papers or in some cases with counterfeit documents.

the migrants who illegally crossed the border of the state
the foreign citizens who are at the territory of the state with an expired visa
the foreign students who didn't leave the country on the expiration of their study
the workers with expired employment contracts.
Children which were born by foreign illegal citizens in the territory of the state. This

point depends on the legislation of the state, for example in Russia the child becomes a citizen if
36

at least one parent is Russian. If both parents are foreigners, their child can become Russian
citizen, but it will be refused in nationality of its parents home-country.
It is well known that the main factor of illegal immigration is the intention to live a better
life, to maintain ones family and to get away from the poverty. At the same time, there are some
migrants who attempt to avoid criminal liability (especially when using false identification
papers).
It is obvious that illegal immigration has negative consequences for host countries. First
of all, the migrants create an extremely low standard of labor relations with the employers who
are hiring them. Moreover, they violate some house rules because of the overpopulation of
occupied living spaces, as illegal immigrants are trying to save their money on rent. Because of
the fact that migrant workers are all the time far away from their families, trying to earn some
money, they destruct their families too.
Illegal migrants do not pay taxes, however they use medical services in public medical
institutions, their children attend public schools, thus the expenses of municipalities on law
enforcement increase.
The consequences of illegal immigration for host countries:
USA. It is a huge problem of illegal immigration in the USA. By official estimates there
are more than 13 million (informal it is about 40 million) illegal migrants in the country. There
are two categories of illegal immigrants there: first of all there are those migrants who arrived
legally, and then remained in the USA with expired visas, also there are those who crossed
country borders illegally. Most of the illegal migrants got to the USA through the southern
border with Mexico, so generally from the country of Mexico and other countries of Latin
America.
Australia. The number of legal migrants grows annually on 300 thousand people, while
the quantity of illegal migrants decreass by 9% annually.
Japan. Japan has a low level of legal immigration and there is almost no illegal
immigration there.
China. 8 million of people legally work in China, illegal migrants are generally from
Pakistan and India.
South Korea. 2 million migrants are working in the country, they are generally from
China and India.The amount of illegal migrants is about 3 000 000 people, and they are generally
from the Arab countries, China and Democratic People's Republic of Korea.
Europe. Migrants from Africa are the special problem for European continent. The
migrants from Africa are looking for a better life on the European continent, they pay a lot of
37

money for the transportation through the Mediterranean Sea, but however they dont always
reach the continent because it often happens that they sink or perish from exhaustion.
Switzerland. On September 24, 2006 at the referendum in Switzerland, two thirds of
inhabitants (which is about 70%) supported the decision of immigration restriction. So the laws
became a barrier to those who want to get a higher standart of living under the pretext of a
political asylum. At the same time, the accession to the Schengen agreement, which came into
force on January 1, 2007 can prevent the decision of Switzerland inhabitants and will create
certain opportunities for people interested to remain in the country [9, p.46].
It differs from when states are welcoming the experts from other countries. For example,
Australia and Canada have developed systems which facilitate the entrance of experts from
developing countries as immigrants. In order to entry into the USA, it is allowed to receive
temporary visas rather easily if they are requested by the local employer. As we can see illegal
immigrants don't bring any benefits to the host country, only losses. While legal imigrants are
welcomed and appreciated in the host country.
The international labor migration has positive and negative consequences for sending
countries too. The positive ones are:

Relative
balance of
domestic
labor market

Emigration reduces socio-political

intensity in society, thus partially
decreasing unemployment and social
tension in the country

Remittances

Migrants send foreign currency transfers

to maintain their families. This became
an important source of foreign currency
in the country

Knowlege
and abilities
acquisition

When migrants come back home,the

yuse the production culture from abroad,
they also gain new abilities and
knowledge which after they apply in their
home country.

Pic. 2.9. Positive consequences of labor migration for sending countries [developed by the
author]
Remittances became an important factor of foreign currency inflow to the donor country.
For example, in Pakistan the remittances from labor migrants exceeded by $5 billion a year.
38

People's Republic of China carries out an organized labor emigration, earning on it more than $2
billion a year [15, p.83].
Negative consequences:
O
utfl ow of
Outflow
w
ork force
workforce
T he re is an
o utfl o w of
w ork fo rce a t
m ost w orkin g a ge , th u s a la rg e
p art w o rkfo rce
d istra cts from
n atio na l
p rod u ction an d
d oe sn 't
p articip ate in th e
crea tion of G D P

"B
ra in Drain"
D rain "
"Brain
T he g re ate r p art
o f w o rke rs w h o
p ositive ly p ro v e d
th e m se lve s in
fore ig n firm s,
d e cid e to sta y in
fore ig n cou n try
m ore or re m a in
th e re on
p e rm an e n t
resid en ce .
T hu s th e d on o r
cou n try lose s a
ce rta in p a rt o f
th e q ua lifie d
lab or.

M
ora l u
p se t fo
Moral
upset
forr
d
o n o r country
co un try
donor
p
op u lation
population
S u cc essfu lly
settle d m ig ra n ts
a ct like a m o ral
u p se t for a
ce rta in p art o f
th e p op u lation ,
w h ic h
rep re se n tative s
w ork on th e
h om e la n d w ith
th e sam e re tu rn
o f force s an d
p rofe ssio na l
k no w led g e , b u t
rece ive a low er
sala ry a n d le ss
o pp ortu n itie s to
g row an d to
b u ild up o n th e
succ e ss.

Pic. 2.10. Negative consequences of labor migration for sending countries [developed by
the author]
Despite the Convention on protection of migrant workers adopted by the ILO, the social
protection of the foreign workers leaves to wish a lot of the best. Small wonder that the amount
of money that migrants are paid is less than native people get, even if they do the same job as
quickly and qualitatively. Also, foreign workers are often considered as of little worth and so
they are the first ones that can be dismissed in case of crises and unemployment.
Another negative consequences that are possible for donor countries can be decrease
of qualification of hired migrant workers, while they are working like handymen abroad.

CONCLUSIONS AND RECOMMENDATIONS

39

Labor migration represents the resettlement of able-bodied population from one state into
the other mainly caused by economic reasons and is divided into emigration (departure) and
immigration (entrance). Labor migration conducts to alignment of wage levels in various
countries.
As a result of migration the total volume of world production increases due to more
effective use of workforce and its intercountry redistribution. Another positive economic effect
which is caused by migration is the growth of migrants income, money transfers home
(remittances), which resulting the decrease in costs of production in these countries getting
money transfers.
The developed countries are considered as the main direction for immigration, and
developing ones are the emigration source.
State regulation of international labor market is carried out on the basis of the national
legislation of the host countries and the countries exporting workforce, also on the basis of
interstate agreements between them. This regulation is carried out through adoption of certain
programs

which are directed on restriction of foreign labor inflow (immigration) or on

stimulation of immigrants to homecoming (reemigration). The majority of host countries usually

use selective approach for immigration regulation.
Elimination of undesirable immigrants is carried out on the basis of requirements
imposed to migrants qualification, education, state of health, age, on the basis of quantitative
and geographical quoting, temporary and other restrictions. Stimulation of reemigration is
carried out through payment of compensations to the leaving migrants, the creation of
workplaces, rendering an economic help to the countries of mass emigration.
International Organizations for migration, donor countries and host countries improve the
legislation, the regulation mechanism of migratory processes, being guided by the principles of
freedom and democracy, also taking into account certain national interests.
International Labour Organization is an unigue one with the respect that, representatives
of workers and businessmen possess equal number of votes with representatives of the
governments. One of its most important functions consists in the adoption of conventions and
recommendations establishing the international labor standards in such areas as freedom of
associations, salaries, duration of the working day, social insurance, paid holidays, labor
protection, hiring services and working inspection.

40

The main reason for this research was a need to understand and distinguish the costs and
benefits of international labor migration. Certain analyses concerning the main reasons and
consequences of migration as for the accepting and sending countries were carried out.
So as it was shown above, the international labor migration arises because of a certain
contrast in levels of economic and social development of the states. At the same time, the world
practice shows that labor migration provides undoubted advantages to the countries both
importing workforce, and exporting it. But thus arise certain social and economic issues.
Nowadays there are a lot of positive consequences of labor migration like reduction of
unemployment , remittances from emigrants which is a huge benefit for donor countries, while it
is an additional source of the currency income, and also migrants get knowledge and experience
after working in a foreign country. As a rule, when migrants are coming home, they invest earned
money into own business, thus creating additional workplaces.
Among the negative consequences of labor migration it is necessary to remember about
the desire to hide the gained income, the phenomenon of "brain drain", and sometimes even th
edecrease of working migrants qualification.
Also, one of the features characterizing a modern stage of migratory processes consists in
significant increase of illegal migration. Many countries regulate the inflow of foreign labor in a
legislative way, so far the illegal penetration through the borders strongly increased. Thus,
illegality of labor migration became a world problem. The other aspect of this problem consists
in the fact that the illegal workers represent the cheapest workforce.
So, labor migration is an integral attribute of modern labor market. Also, labor migration
positively affects many aspects of the economy like softening the problems of employment and
creating additional workplaces, increasing productivity and efficiency of work.
In turn, the import country faces the deterioration of demographic situation, deficiency of
professional labor and the growth of inflation because of workforce outflow. However, the
decrease of unemployment and investments into the donor country economy will promote the
improvement of economic indicators. The convergence of compensation levels in the donor
countries and the recipient countries can reconcile these ambiguous consequences of labor
migration. Similar levels of salaries smooth and harmonize the costs and benefits of labor
migration, gradually leveling economic development of the countries.

41

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