Seize the Spotlight: A Case for Gulf Cooperation Council Engagement in Research on the Effects of Labor Migration

Labor migration to the countries that make up the Gulf Cooperation Council (GCC) has enormous effects on the region, the countries migrants come from, the migrants themselves, and their families. Migration is one of the main ways the GCC interacts with the rest of the world, but there is very little research on any of these effects. What little research on GCC migration does exist is primarily descriptive and anecdotal, allowing little inference about the systematic effects of migration. It is also highly critical and principally originates from outside the region; almost none of this research is carried out by institutions based in the Gulf. Given that state of affairs, Gulf-based think tanks are missing a major opportunity to engage policy research on labor migration from a regional perspective.

In this essay, I summarize the importance of the migration phenomenon, measure the extreme scarcity of research capable of elucidating the systematic effects of Gulf migration on the GCC and the rest of the world, and offer an example of a new research approach. I close by suggesting elements of a new research agenda that Gulf-based policy research institutions should claim, support, and advance. Gulf institutions can seize and broaden the spotlight of research to illuminate more useful questions.

Labor migration to the Gulf has very large, global effects, but we know little about them

By any of several measures, labor migration to the Gulf is a phenomenon of vast importance. First, it is large relative to the size of the destination countries. The population of the GCC as a whole is approximately 41 percent foreign-born (EIU 2009). This rate is much higher than that seen even in high-immigration OECD countries such as the United States and France (both 13 percent), Canada (21 percent), and Australia (27 percent) (OECD 2013, p. 25). In all GCC countries except Saudi Arabia, foreign workers make up around 90 percent or more of the entire private sector labor force (Fasano and Goyal 2004). The large majority are from developing countries, principally South Asia and the Philippines.

Second, migration to the Gulf is large relative to the areas that migrants come from. India is the principal country of origin for the 17 million migrants in GCC countries. In the Indian state of Kerala in 2004, 26 percent of all households had at least one temporary international migrant, and 89 percent of these were in GCC countries (Zachariah and Rajan 2009, pp. 35, 162). The Philippines reports that in 2011 there were about 1.5 million temporary Overseas Filipino Workers (POEA 2011) working abroad through the Philippine Overseas Employment Administration—about 4 percent of the entire national labor force (BLES 2012). Of these, 64 percent of new land-based hires went to GCC countries (POEA 2012, Table 4).

Third, international financial flows arising from Gulf migration are vast. In 2010, South Asia received about US$83 billion in remittances from migrants in all countries—compared to about US$56 billion in Foreign Direct Investment (FDI) and foreign aid combined (World Bank 2012)—and a large portion of this came from the GCC. [1] Outward remittances from GCC countries totaled US$75 billion in 2011, almost double its outward FDI (IMF 2011). India receives about as much in workers’ remittances from GCC countries alone as it receives in FDI from the whole world (Figure 1).

Figure 1: India receives about as much in remittances from the GCC countries as it receives in FDI from the whole world

The UAE Exchange Center estimates that GCC remittances to India in 2012 were approximately $30 billion, including informal remittances ( http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/uaebusiness/2013/January/uaebusiness_January42.xml&section=uaebusiness). Average annual FDI received by India from all countries on earth 2009–2011, $31.4 billion per year according to the World Bank. ( http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD).

Nonetheless, researchers know very little about the effects of labor migration to the Gulf. Those effects are very difficult to measure accurately. What has been the effect of low-skill foreign workers on the economic productivity of GCC capital and GCC labor? This requires estimating what would happen to GCC economies with a smaller or different labor force. What has been the effect of GCC-bound migration on India or Pakistan? This requires estimating what would happen to South Asian societies and economies without the jobs, remittances, work experience, and time abroad that come through jobs in the GCC. What is the effect of work in the GCC on a particular migrant or that migrant’s family? This requires estimating what would have happened to the worker or family had migration not occurred. In short, measuring effects on countries or households requires estimating things that cannot be directly observed because they did not happen; economists call these things a “counterfactual.”

The principal focus of scholarly and popular writings on labor migration to the Gulf is the harms and abuse perceived to be associated with the phenomenon, not the benefits to workers or countries. The foremost theme of scholarly research on Gulf migration, Gardner (2012) writes, is “the problematic and exploitative labor relations that seemingly characterize the experiences of many of the poorest transnational labor migrants who spend time in the Gulf states.” To take two of numerous examples of academic research on foreign workers in the UAE, Keane and McGeehan (2008) describe “appalling” conditions in “a form of slavery,” while Zachariah et al. (2003) find that “nearly one-fifth of the Indian migrants have not received the same job, wages, and non-wage benefits as stipulated in their work contracts.”

An even greater focus on perceived harms to workers emerges in more popular writings on migration to the GCC. For example, Human Rights Watch (2006) describes workers in the UAE as subject to “wage exploitation, indebtedness to unscrupulous recruiters, and working conditions that are hazardous to the point of being deadly.” Of all internet pages in English that mention migrant workers in Dubai, almost one-third contain the words “slave” or “slavery.” [2]

There are nascent attempts to fill this very large gap in research on a phenomenon tremendously important to the GCC and its effect on the world. Zachariah and Rajan (2009) have conducted repeated, large-scale surveys of migrant households in India that have advanced our understanding of the correlates of migration. Elbadawi and Vásquez-Álvarez (2011) have explored the effect of foreign labor on the productivity of the UAE economy. But it is clear that, as Gardner (2012) writes, “in comparison with the scholarly literature concerning the larger migration flows to North America and Europe, our collective understanding of migration to the Gulf states remains in its infancy.”

In sum, there are two clear characteristics of policy research on labor migration in GCC countries: it is exceedingly scarce, and what does exist focuses on documenting anecdotes of costs and harms experienced by some migrants. A third characteristic is the subject of the next section: virtually none of this research is produced in the Gulf region.

Gulf-based policy institutions largely ignore or deprecate labor migration in their research

Very few research products originating in Gulf-based institutions have influenced the international policy research discussion on labor migration to the Gulf—largely because Gulf-based policy research institutions produce almost no research on the subject. They tend to focus their research on other issues, such as macroeconomic issues of petroleum management or education of GCC citizens. When they do produce research on labor migration, that research is typically designed to document negative aspects of migration and explore ways to reduce it.

According to Google Scholar and the academic research database JSTOR, very few of the most influential research articles on low-skill labor migration to the Gulf region originate in the Gulf region. In Google Scholar, the top 50 most influential published papers [3] on this subject only include five papers by authors clearly based at Gulf institutions, [4] and four of these five are by the same author. These papers, which originated from one medical school in Kuwait and one department of anthropology in the UAE, describe how workers get to the Gulf and correlates of their experiences there. None of these papers address the overall effects of migration on workers and their families, the destination economy, or the origin economy. Almost all of the other 45 most influential papers in Google Scholar originate from institutions in Europe, the United States, and Australia. And in JSTOR, of the 15 listed articles in academic social science journals that contain “migration” and “Gulf” in the title or abstract, not one originates from a Gulf-based institution. [5]

Why is Gulf-based research essentially absent from the policy research literature on the effects of labor migration? It is not because international researchers are ignoring the Gulf-based research that is produced. Gulf-based policy research institutions are simply producing almost no research in this area.

Not one leading Gulf-based policy research institution has produced a portfolio of serious research products regarding the effects of labor migration to the region. I searched the English-language internet sites of all leading policy research institutions in GCC countries, [6] looking for any research product—papers, books, or multimedia—discussing the issue of international labor mobility and providing substantial new objective information about the effects of the phenomenon (short opinion pieces are not included). In each case I both searched the site for a standard list of terms (‘migration,’ ‘migrant,’ ‘expatriate,’ ‘foreign,’ ‘labor,’ ‘India,’ ‘Pakistan’) and reviewed individually all publications within potentially relevant subject areas of the site (such as ‘labor markets’). I report the results in Table 1. Among the hundreds of research products produced by these organizations, I was only able to find ten research products of any kind reporting new, objective information about overseas labor migration. All of these were produced in just two of the six GCC countries.

Table 1: GCC policy think tanks and their research output on labor migration to the region

^a Listed in Nada Tarbush (2010), Strategic Mapping of Think Tanks: Mediterranean Countries & Beyond , Marseille: Center for Mediterranean Integration. ^b Listed as one of the “Top 45 Think Tanks in Middle East and North Africa (MENA)” in James G. McGann (2012), Global Go-To Think Tanks Report and Policy Advice 2012 , Philadelphia: University of Pennsylvania. ^c Think tanks listed by Gulf Research Council as reported by the George Washington University library, “ Think tanks in the Middle East and North Africa by GRC”. I omit the Bahrain Upcoming Green Energy Think Tank and the UAE Arab Water Academy because labor mobility research could not fall within their missions. Studies are those available on English-language internet pages for each institution visited April 27, 2013. The ten research products in the rightmost column are: 1) Kamrava and Babar (2012) published by the Center for International and Regional Studies. 2) GSDP (2008) and 3) Qatar National Vision (2012), both published by Qatar General Secretariat for Development Planning. 4) Diop, Le, and Alemadi and 5) Seshan and Yang (2012), which received support from the Qatar Foundation. 6) Al Awad (2008) and 7) Elbadawi and Vásquez-Álvarez (2011), both published by the Dubai Economic Council. 8) Al Shamsi (2010), published by ECSSR. 9) Jain (2006) published by the Gulf Research Center. 10) Chaaban and Mansour (2012), co-published by the Middle East Youth Initiative.

Even this tiny output is often carried out by researchers based outside the Gulf. In addition, these research products are mostly designed to describe labor migration’s causes, rather than its effects; they frequently make unsupported claims about the negative effects of labor migration on Gulf countries; and they are nearly silent about the effects of migration to the Gulf on other countries or overseas households.

Of the ten research products in Table 1, the most substantial is a volume of collected papers (Kamrava and Babar 2012) published via the Center for International and Regional Studies at the Georgetown University School of Foreign Service campus in Doha. Of 16 authors represented in the book, only three are based in the Gulf (two in Qatar, one in the UAE). The papers collected there primarily use anecdotal interviews to describe aspects of migrants’ experiences while they are in the Gulf.

Most of the other nine research products from Gulf-based think tanks likewise do not seek to measure the effects of labor migration but instead describe it. A few primarily report the numbers of foreign workers who move and legal frameworks governing that movement (Jain 2006, Al Awad 2008, GSDP 2008, Qatar National Vision 2012). Al Shamsi (2010) focuses on the causes of labor migration to GCC countries, rather than the effects. Diop, Le, and Alemadi (2010) describe Qatari nationals’ attitudes toward foreign workers.

Three of these ten products use transparent quantitative methods to assess the impacts of labor migration. One of these is a macroeconomic study of the overall impact of foreign labor on the UAE (Elbadawi and Vásquez-Álvarez 2011). The other two are microeconomic studies of remittances by foreign workers in the Gulf. Seshan and Yang (2012), with support from the Qatar Foundation, explore the effects of financial literacy training on remittances by Indians in Qatar. Chaaban and Mansour (2012), published by the Middle East Youth Initiative, explore the correlates of remittance receipts by households in Jordan, Syria, and Lebanon with members in the Gulf. [7]

Many of these ten research products make claims about negative effects of labor migration, claims that are not supported by transparent measurement. Qatar National Vision (2012, p. 15) states that “[H]igh levels of immigration support a low wage, labour-intensive, low-productivity economy,” arguing that large-scale labor migration is substantially the result of government subsidies. Al Shamsi (2010) asserts that the UAE economy will benefit from “avoiding the employment of cheap, unskilled workers” and “Emiratizing” the labor force. While these and other statements imply that current forms of migration are harmful to Gulf economies, there is no economic evidence offered to support that conclusion. Indeed, Elbadawi and Vásquez-Álvarez (2011) find that large-scale labor migration has been fundamental to rising productivity and economic growth in the UAE. Nonetheless, most research on this subject produced in the Gulf takes as axiom the expressed belief of many Gulf governments that labor migration is somehow too large (Shah 2006), and appears designed exclusively to consider ways to reduce it.

Describing some migrants’ experiences is not the same as measuring the effects of migration

It is important to clarify what I mean by measuring the ‘effect’ of migration, and why I assert that ethnographic interviews such as some of those in Kamrava and Babar (2012) do not allow us to make conclusions about the general effects of migration. Research methods that describe the experiences of limited numbers of migrants can certainly play a small role in informing research about the effects of migration. But these methods are not designed to capture, and cannot capture, the full effects of migration—on workers, their families, or whole countries. This is for two reasons. First, even numerous anecdotes may not capture typical experience. Second, even representative data about typical experiences at the destination do not represent the effect of migration, which must be measured relative to an alternative scenario in which migration does not occur.

Consider what would happen if an ethnographer in the United States during the 1950s sought to measure the impact of labor force participation by US women. That ethnographer could gather numerous rich, contextual stories of women who entered the workplace and had bad experiences, including discrimination, verbal abuse, physical abuse, and low wages. These might be important and informative stories. Yet few would regard these stories, however vivid and compelling, as a full account of the effect of work by US women in the 1950s. Women’s entry into the American labor force transformed their lives; most enjoyed the new career possibilities they acquired; their work greatly altered their families’ relationships and prospects; and their massive entry into the labor force transformed US workplaces for the better. Almost none of this can be captured by documenting numerous women’s bad experiences in workplaces. (This claim does nothing to invalidate those bad experiences, or to diminish the importance of punishing those responsible for such abuses.)

Instead, understanding the full effects of work by US women would require measuring and understanding what would have become of those women, their families, and the US economy and society had they been unable to work. For example, if an American woman chose to work rather than stay home so that her daughter could attend an expensive private school that could change the daughter’s life, researchers could not understand the full impacts on her household only by documenting harassment she endured in a male-dominated firm. This would continue to be true even if numerous case study interviews confirmed that she and many other women had bad experiences in the workplace, because that may or may not be the experience of the large majority of women who worked. And even if it were the experience of most women who worked, we would not understand the effect of work without knowing what would have become of her had she not worked.

Likewise, although case study interviews about migrants’ experiences are one of many valuable sources of information for research, they are not designed to address questions about the overall effects of migration on workers, households, and nations. Even when ethnographers speak to hundreds of migrants (e.g. Gardner 2012), it remains unclear whether or not those migrants’ experiences are exceptional. Beyond that, even when data on migrants’ experiences at the destination are representative of the whole statistical population (e.g. Al Qudsi 1985), their experience at the destination does not capture the generalized effect of migration. The effect of migration on a worker is the difference between what happened to that worker with migration and what would have happened to him or her without migration. That requires a clear comparison to what the worker’s life would have been like without migration. This is difficult to do, but I will give one example of how it can be done.

One way to measure effects of Gulf migration on South Asian workers and their families

In a new paper, I employ one of many research methods that can be used to more confidently estimate the effects of Gulf migration on Indian workers and their families in particular settings (Clemens 2013). [8]

There are many ways to approach this evaluation problem. We might roughly approximate the effect with a simple comparison of observed workers and families with a UAE job to those without a UAE job. But this can be misleading, since those groups might differ in other ways that are difficult to observe. For example, if more indebted workers tend to seek high-wage work overseas, it can be difficult to tell whether any differences in indebtedness associated with working overseas—at a single point in time—are the result of working overseas or the cause of working overseas.

A scientifically more valid approach would be to follow observably identical Indian workers and families over time, and compare outcomes among those who later work overseas to outcomes among other workers and families. But this too has disadvantages. Families that later send workers overseas might differ at the outset from other families, in ways that are difficult to observe but affect their later decisions, such as their tolerance for risk or their foreseen ability to repay debt. Again, it could be difficult to attribute any differences between the groups strictly to the experience of overseas work. Additionally, the approach of tracking over time is an expensive research enterprise. Because most Indians do not migrate, one must track a very large number of Indian households initially without migrants in order to end up with a substantial sample of households with migrants.

I take a different approach. I wish to ensure that when I compare households with and without migrant workers, those households are essentially identical in all other ways, observable and unobservable. Hypothetically, this could be accomplished by a designed experiment in which randomly selected groups of Indian workers are encouraged to take a job in the UAE. But I can accomplish nearly the same goal without any designed experimental intervention, by taking advantage of past natural events—a natural quasi-experiment. This approach has two parts.

First, I analyze a highly homogeneous group. I ran a survey in India where the sampling universe comprises only a group of Indian workers who applied for and were selected for construction jobs in the UAE through one multinational construction firm in 2008 and 2009. Every household in the universe has a member who was willing to apply for a construction job in the UAE, was able to express that desire by applying for the job in one of four recruitment centers in India, and was selected to receive a job offer in the UAE. All workers and households sampled have the observable and unobservable traits that led them to demand and be offered such a job.

Second, within that group, the actual arrival of each worker in the UAE was determined largely by a force majeure that is unlikely to correlate with any observable or unobservable difference among households that pre-dates migration. During the period of job offers I analyze, the UAE construction sector experienced a sudden, major, and unexpected negative shock. At the end of August 2008, the UAE faced a sudden and severe slowdown in economic activity due to the international financial crisis and the bursting of a speculative bubble in the Dubai property market. This led to the rapid freezing or cancellation of large numbers of UAE construction projects, particularly in Dubai. Debt service quickly became difficult for the highly leveraged construction sector. International finance dried up amidst the wave of instability, and domestic finance dried up as the price of the UAE’s chief export—petroleum—plummeted 60 percent in two months. Hundreds of construction projects halted, some for months and others for years.

As a result, many UAE construction firms canceled orders for new construction hires from India and elsewhere, including hires already in process for a UAE visa. It thus happened that small differences in the date when an Indian worker applied for the UAE job he was offered are associated with large differences in the probability that he successfully arrived in the UAE. But small differences in the date that he applied for his job are unlikely to be associated with large differences in the observable or unobservable traits of that worker and his family. Together, these two methods allow us to observe Indian workers and their families in a setting where work in the UAE has been as-good-as-randomly allocated among them.

Such a research design has the advantage of keeping to a minimum any expected observable or unobservable differences between these workers and families other than the fact of having worked temporarily in the UAE. This allows confident identification of the true effects of UAE work. The natural experimental approach has the advantage of using naturally occurring events rather than a scenario contrived by researchers, alleviating concerns that research subjects are reacting to an artificial setting. It is also much less expensive than a designed experiment. The approach of limiting the analysis to job applicants through one firm has the advantage of more reliably measuring the effects of UAE work on this population, but it has the disadvantage that its conclusions cannot uncritically be extended to other populations.

The data for the study come from three matched sources: Indian hiring records of a major UAE construction firm, a purpose-built survey conducted in nine Indian states , and administrative records from the UAE Ministry of Labor. I individually matched hiring data on successful Indian applicants to UAE construction jobs from 2008–2009, survey data on those workers’ families collected in 2011, and the UAE work history of each job applicant in all years. The resulting database covers 2,727 Indian households across 10 states in India.

Three key results emerge from analysis of these data. First, the economic benefit to migrant workers is extraordinarily and systematically large: migration to the UAE for basic construction work causes their daily wage to rise by a factor of five, and causes employment to rise by at least 20 percentage points. Second, there is no sign that many of the commonly-mentioned costs of migration are systematically experienced by migrants’ households; migration to the Gulf causes the fraction of households in debt to sharply decline, and there is no evidence of labor force entry by school-age children or labor-force exit by adult family members. Third, households are generally well-informed about working and living conditions in the UAE, and there is no evidence that they enter into migration systematically overestimating the benefits. Households with migrants give estimates of migrants’ income that closely reflect true income in UAE administrative records; households without migrants do not guess that their family members could earn more than they would have if they had been able to migrate; and households’ estimates of non-wage working/living conditions in the UAE change little whether or not that household has a migrant.

These numbers reflect only the experiences of applicants to one important construction firm in one GCC country. Much more research is needed. If future research shows such findings to apply more broadly, they imply that the migration of workers from South Asia to the UAE has been an important force for employment and poverty reduction for South Asians. It generates employment for hundreds of thousands who would otherwise be without work and creates billions of dollars in earnings each year for low-income South Asian workers, even after accounting for the economic effects of their migration on the families they leave behind. The findings suggest that concerns about overindebtedness, regret, and unrealized aspirations should be regarded as anecdotal rather than systematic. Indeed, they raise questions about continuing to place top research priority on “problematic and exploitative labor relations” (Gardner 2012) and suggest instead exploring other aspects of the effects of Gulf labor migration.

Conclusion: A new, crucial research agenda for Gulf policy research institutions

I have argued that careful policy research on the effects of labor migration to the Gulf has been extremely scarce, has typically used methods incapable of capturing the full effects of migration, and has originated principally from outside the Gulf. Gulf-based policy research institutions could remedy all of these problems at once by devoting more resources to research on the full effects of migration. My own experience suggests that when the policy debate lacks evidence, a few pieces of solid research can go a long way to transform the discourse.

Institutions based in the Gulf are best-placed to carry out this research. They are better-placed than researchers at non-Gulf institutions to intuitively grasp some aspects of migration, they can access much better data than those outside the region—particularly underutilized government surveys and administrative data—and many have sufficient financial resources for the task. It is true that Gulf-based institutions will face challenges in this endeavor, including attracting and retaining researchers in residence who are trained in the latest social scientific methods of measuring policy effects. These challenges can be lessened by actively seeking international research partners.

What is the agenda? The old agenda has been to interview migrant workers and document the difficulties that some of them face, with a view toward protecting their rights, and to encourage GCC countries to rely less on foreign labor. We now have numerous studies documenting difficult working conditions for certain numbers of migrant workers, as well as studies urging GCC countries to create more incentives for their own nationals to work in the private sector. The greatest marginal gain from new research does not lie in these areas.

Instead, here is a sampling—very far from exhaustive—of important questions on which we have almost no research that extends beyond anecdotal interviews and opinion pieces: How does prior experience working in the Gulf affect South Asian workers’ experiences in labor markets back home? How do Gulf workers’ children back home typically fare when their parent is away for extended periods, and what is the effect of large increases in that workers’ income on child welfare? What exactly do typical Gulf migrant workers expect before they arrive? What types of borrowing do typical migrants do, and how do they finance that debt? What specific features of GCC labor migration can we deploy to go beyond documenting correlates of migration and be more confident that we are recording the effects of migration?

Other questions address effects more broadly: What are the comprehensive, systematic community and neighborhood effects of high rates of migration to the Gulf? How do remittances by Gulf workers, spent largely on consumption of locally-produced goods and services, affect investment in the places remittances are spent? Without migration from South Asia and the Philippines to the Gulf, how would economies and societies in Asia and the Gulf be different? What can we learn about these questions from real-world experiences, such sudden changes in migration (as when many Jordanians departed Kuwait at its occupation by Iraq, and when many South Asians stopped arriving in Libya after the fall of Colonel Gaddafi)? How do worker protections affect flows of workers (see for example McKenzie et al. 2012)? Under what realistic conditions will GCC citizens fill most of the private sector jobs that are available in the GCC? For example, what wages and benefits would induce GCC citizens to work as drivers, nursing aides, and retail clerks? If that wage is prohibitively high, then what are the economic consequences of different labor market regulatory regimes going forward?

The fundamental difference between the old research agenda and this new one lies in what we are comparing migration to . The difference can be clearly seen in this lament about Gulf migration from Jean-François Seznec of Georgetown University: “Unfortunately, even if India improves and stops sending so many laborers, there will be no shortage of other poor people. The sources may change to more Bangladeshis, more Filipinos, more Africans, etc.” (EIU 2009, p. 17). In what sense is this “unfortunate”? It is certainly unfortunate that all Bangladeshis, Filipinos, and Africans do not have high-paying job opportunities at home, as they would in an ideal world. Likewise, much of the research on labor migration to the Gulf seems to compare it to an ostensibly ideal world in which GCC countries did not require foreign labor.

But compare instead to what is likely in the real world, and read Seznec’s statement again: if better jobs were available in India than are now available, freeing up Gulf jobs for low-income people in other countries to have their turn at life-changing rises in income that they cannot access now, then all of the poor people being discussed are better off than they otherwise would be. What is unfortunate about that? One research perspective compares to an unlikely but more desirable utopia; another perspective compares to a more likely but less desirable real world. Research methods that determine effects by comparing to real alternatives are more informative for this second perspective.

This perspective can be helpful. When we compare migrants’ experiences in the Gulf to their realistic alternatives, for example, we are less likely to wonder, “Why do they keep coming?” (Gardner 2012), and more likely to understand migrants’ choices and their full effects. Gulf-based research institutions have the opportunity now to carry forward this new agenda. The issue is of growing global importance, demand for this research is high all over the world, and organizations that foster this research will raise their international profile.

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