Wednesday, 18 December 2013

Migrating out of Necessity: A sad story from Indonesia

Endang Sugiyarto

We all know that poverty is multidimensional and people become poor for various reasons. It then follows that to break the vicious circle of poverty and to escape from the poverty trap, there must be many different ways too. Many have suggested that education (and human capital development) is one of the long term solutions while micro finance can help the poor to build up badly needed capital to earn extra income to have a chance building up economic capacity to break out of poverty. Migration is another such route, seen by many poor people as a golden opportunity to get a (much) better paying job and earn extra income in destination countries so that they can escape poverty now, or at least in the next generation. I must stress that this migrating out of poverty is NOT something new but it’s been practiced for hundreds of years in Indonesia. Migration to expand one's horizon and human capability is something that is encouraged and praised in the traditional culture decorated with success stories.
In the above context, Indonesia is currently one of major labour exporting countries in the world, sending hundreds of thousands migrant workers annually to the Middle East and neighbouring countries, and receiving a significant amount of remittances estimated around $7 billion annually or 1.3% of country’s GDP (World Bank, 2011). These are just official figures as the actual number of migrants and amount of remittances must be much higher due to the significant number of irregular migrants from Indonesia. They send remittances through informal channels that make them undetected and unrecorded in the official statistics.
International migration from Indonesia has a long history and currently labour exporting has been acknowledged as part of the government’s policy to reduce unemployment and channel the increasing number of labour force in the domestic economy. The government has developed programs to facilitate the migration and new institution to manage the migration process. As a result, about 3% of all households in Indonesia now have at least one person who has migrated. These rely on remittances as their main source of income which contribute around 30 percent of their total income.
My research is focusing on the reasons behind the choice to migrate and the effectiveness of policies to maximise the benefits of migration. I am using economic and other data available from the National Socioeconomic Survey (Susenas) 2007 to examine the underlying migration dynamics including their determinants and characteristics at household and region levels.
I started working on this in September 2012 . My results so far indicate that there are strong factors in Indonesia that push people to migrate internationally. They seem to be driven out by factors representing “burdens” to the household which are negatively associated with “better socio-economic indicators”. They seem to be driven to migrate out of necessity, in a desperate attempt to make a better life regardless of all obvious limitations, especially in relation to their human capital. For example, in rural areas, older and female headed households (associated with poor households), and households with a higher number of children and older people tend to have a higher number of members who have migrated abroad, while households with higher per capita expenditures, having more infant, productive age and educated members, tend to send less numbers of migrants. The finding that better-off and more educated households tend to send less migrants is further confirmed by the job status of migrant household heads, which are relatively more in non-employee categories with the main source of income from agriculture sector.
An analysis of different regions reveals a consistent feature. Agriculture as main source of household income is influenced by rural variable while the per capita expenditure and average length of study of household members are affected by region. The findings also suggest that migrant households are not among the poorest ones conforming to the results of previous studies that highlighted international migration cost is still relatively very expensive for the poor that reduces the likely of them to participate directly in the migration process. For example, placement fee for an Indonesian to migrate to Singapore would be S$3000-S$3600 (equivalent to approximately $2,391 – $2,870), which is very expensive and beyond the reach of the poor (Platt, M. et. al. 2013).
Therefore, my research will provide evidence to maximize the benefits of migration and remittances. I will help policy makers to develop more comprehensive and proactive policies, which have a stronger pro-poor impact. This includes addressing the dynamic factors driving migration, improving the human capacity of the migrants, and better facilitating migration as a free choice - not one of necessity- for migrant workers.
Endang Sugiyarto is a doctoral candidate in Migration Studies at the University of Sussex, funded by the Migrating out of Poverty Research Programme Consortium.

Research on migration – still so much to learn

Eva Maria Egger

I have been working on my PhD in Economics for the past year, alongside working as a Quantitative Research Assistant for the DfiD-funded Research Program Consortium ‘Migrating out of Poverty’ (RPC) which supports my studies. I decided to come to the University of Sussex because of its strong focus on research related to development. During my undergraduate degree in Germany I studied development issues, aid and politics. I later spent a short period living and working in Brazil, which is a country with high levels of migration and high levels of socio-economic inequality. Living in a city of more than 7 million inhabitants, I became fascinated by the fact that cities attract so many people, offer the potential of better prospects, but are challenged by fast population growth. I gained quantitative research skills during my MSc in Economics at Sussex, which laid the foundation that my PhD is going to build on. I am currently working on my first PhD-paper where I am asking: What do we know about urban labour markets in emerging and developing economies? What do migrants do in urban destinations? Does moving to the city yield better opportunities? What is the role of the informal sector? There is a lot of speculation and theory out there, and I aim to shed light on these questions with empirical evidence of the dynamics of urban labour markets and the role of workers’ mobility. Inspired by my time there, I am focusing on Brazil, which is a large country with many big cities and lots of people who migrate internally for work. Plus, there is a large informative dataset available to explore my question – an important determinant for quantitative research.

The Migrating out of Poverty RPC aims to combine quantitative and qualitative research to explore the nexus between migration and poverty in Africa and Asia. To contribute to the quantitative research, the core partners in all 5 regions (east, west and southern Africa and south and southeast Asia) are conducting a household survey covering migrant and non-migrant households. The most unique part of the survey is, in my opinion, that we will collect a lot of information on the subjective perception of wellbeing and of changes in the welfare of the households. My responsibility is to use the data from these surveys to calculate descriptive statistics, which can draw a picture of the general migration patterns in each country. Working with Julie Litchfield from the Economics Department at Sussex I also develop econometric strategies to answer more specific research questions and I then run these models in the software.

In the past few months I have worked on the first dataset from our partners in Ghana, the Centre for Migration Studies (CMS) based in Accra. Our aim is now to explore the connection between migration and subjective wellbeing at the household level. These results can then be used as the starting point for further, more detailed qualitative exploration of the migration-poverty nexus.

The experience of working with a ‘fresh’ dataset no one else has used before is really exciting for me. It is a great opportunity to learn about migration and the experience of migrants as well as their households from this data and from the data, which will be collected in the other partner countries. I hope, that we can gain some more knowledge about the migration and poverty nexus from this.

While I focus on the experience at destination of migrants in my PhD, my research for the RPC has gathered rich information on the origin households of migrants. By combining these two strands of research I hope to understand better why migration is such a commonly observed household strategy to improve wellbeing.


Eva Maria Egger is a doctoral candidate in Economics at the University of Sussex, funded by the Migrating out of Poverty Research Programme Consortium.

Internal migration as a strategy for dealing with economic shocks: the case of Indonesia

L. Alan Winters

I was recently asked ‘what existing notion or belief do you think we need to shake off in order to foster a more sensible discussion of migration?’ The question was about international migration, but my suggestion was equally applicable to internal migration – migration from one part of a country to another. It was to inculcate the idea that migration is an entirely normal piece of human behaviour. It is not special or abnormal, but since the beginning of time people have moved to make the most of their circumstances. This is not to say that migration is comfortable or even desirable, but that it is – or at least is expected to be – better than the alternative. For all the discomfort of leaving your home and family and often living in very cramped and uncertain circumstances, migrants continue to make the move because it seems to offer better prospects for them and/or their families than staying put. A very rough estimate is that at least 700 million people (over ten percent of the world population) are internal migrants. One can hardly pretend that this is not a major phenomenon or that it should not be the subject of a good deal of research and analysis.
Having recently become Chief Executive Officer of the Migrating Out of Poverty Research Programme Consortium, based in the University of Sussex, I have been thinking quite a lot about internal migration recently. Internal migration is a great deal cheaper than international migration and so is much more accessible to poor people in developing countries. As a result, it tends more immediately to boost the incomes of poor people directly and of their families back home if they remit money (as most do) or return home with new capital, connections and capacities for economic activity.
An interesting example of internal migration was the way in which people in Indonesia migrated in response to the Asian financial crisis which devastated the Indonesian economy in 1998. Duncan Thomas (of Duke University) and his colleagues documented the considerable extent of migration during the crisis, much of it from urban to rural areas as the latter suffered less badly than the former. Matteo Sandi, one of my research students in Sussex, and I have been looking at whether this was a successful response to the crisis, especially over the long run (up to 2007). Using data from the Indonesian Family Life Survey, which allows us to observe the same people in 1997, 2000 and 2007 (and often before as well), we asked how the consumption of people who were affected by migration over the crisis grew compared with those who were not. We were able not only to look at the migrants and the households they left, but also at the households they joined as well as cases where the whole household moved.
Our preliminary results – which will be written up quite soon – suggest that in the long run, households that lost people experienced faster per capita consumption growth than non-migration affected households in both the short and long runs (from 1997 to 2000 and 2007 respectively). That is, migration seems to have alleviated pressure on family consumption. Households that were net receivers of people suffered reductions in per capita consumption relative to non-migrant ones in the short run but no significant adverse effect in the long run. This suggests that receiving households had to share their resources over more individuals at first, but that over the subsequent seven years they were able to adjust to get back to the ‘average’ trajectory. There is at least some evidence that such receiving households set off in 1997 with higher consumption than the people-exporting households, so this pattern was not necessarily inequitable as some people have suggested. We also look at households which experienced in and out migration of equal magnitude – i.e. which kept the same composition but with (some) different individuals: they showed significant gains in the long run and no significant difference from non-migrant households in the short run. (Although these households experienced both inflows and outflows of migrants over the crisis, we should not necessarily expect their experience to equal the sum of those who were net receivers and net losers of people, so there is no conflict with the results above.)
We are yet to unpick the details of how these results came about, but the overall story seems to be that migration helped families cope with a very major income shock in the short run and that in the long run that response had only positive or zero effects on consumption growth. That is, migration helped.

Professor L. Alan Winters is interim CEO of the Migrating out of Poverty Research Programme Consortium.

Tuesday, 17 December 2013

Migrants: victims or agents of change?

Priya Deshingkar

How can 66% of Indonesian migrant domestic workers saying that they were able to educate their children and 88% of Indian migrant construction workers’ children being in school be bad news?  This is exactly what is emerging from research conducted by the Migrating out of Poverty Research Consortium in South and Southeast Asia.  It shows how migrants’ own accounts of the motivations, costs and benefits of migration are often at variance with mainstream narratives of slavery and trafficking.  Interviews with migrants and their families tell a much more complex story of hardship and deprivation but also of achievements and tangible improvements in living standards that may not have been possible without migration.  
By all accounts such migration into the lowest jobs has continued unabated or even grown, with urbanisation, a growing middle class and the spread of recruitment agents.  Construction work for example, provides employment for poor and low-skilled migrants all over the world according to Building and Woodworkers International, the global federation of trade unions in the construction industry .  Similarly domestic workers are predominantly but not always female and poor and many are migrants from rural areas according to various studies commissioned by the ILO. 
Both of these occupations have been in the news recently; construction workers because of the slave-like conditions in which they have been employed in the Middle East and domestic work with cases of abuse and exploitation emerging from several countries.  Human rights organisations  and anti-slavery movements have done well to attract attention to these issues but there is a danger that the debate is becoming too polarised; more like a moral discourse with migrants being viewed as “victims” who need to be “rescued” from their employers.  Market intermediaries such as recruitment agents are also suspect because they have a great deal of power over poor and vulnerable workers and can control and exploit them in a number of ways – for example, by confiscating their passports or underpaying them.  The worst cases of exploitation and abuse have become so visible that recruitment agents are now no more than traffickers in the public eye, and migrants, especially if they are poor, young or female, helpless victims. 
The research in South Asia examined the impacts of rural-urban migration for construction work in Nepal, India and Bangladesh through interviews with 150 migrants in the capital cities, and a small number of rural families in source areas.  In India, 98% had saved and remitted part of their incomes even though they lived and worked in extremely inadequate and hazardous conditions. These remittances were critical for the receiving families in improving consumption, upgrading housing, investing in education and assets.  While most migrants felt their living conditions had deteriorated, they felt that migration had opened up more opportunities for employment and higher remuneration which they hoped would support them out of poverty. Interviews with source families in Bihar and West Bengal indicated that 88% of the children from migrant households were in school compared to 77% among non-migrants, more durable assets, better housing and higher levels of expenditure on consumption compared to non-migrants from a similar socio-economic background.
The research in Singapore, based on interviews with 201 Indonesian migrant women working as domestic workers, also highlights the need to understand the process from a broader perspective.  There, despite the precarious and unregulated nature of recruitment and employment processes, with employers and agents exercising a great deal of power over workers, 66 per cent of the migrants in the sample said that remittances had contributed to the education of their children and other uses that have the potential to reduce poverty and improve well-being in the longer term.  However the impacts of such migration on poverty would be significantly faster and greater if the industry could be better regulated.
The results so far indicate that migration presents a number of possibilities for the poor to exit poverty in the longer term through human development and asset building, especially when compared to options available locally. Where setbacks and losses are experienced, this is more to do with the hostile policy environment that leaves migrants with few sources of insurance against risk or the inability to access services that should rightfully be theirs.  There is a need to move beyond the incomplete and biased analysis that views the migration of the poor only through an exploitation lens to one that examines the counterfactual i.e. what they would have done in the absence of such employment.  
Dr Priya Deshingkar is Research Director of the Migrating out of Poverty Research Programme Consortium.