Methods for Assessing the Impact of Temporary Labour Emigration

Abstract

Over the last three decades temporary emigration I of labour force has gained considerable importance for the economic development of many labour-rich and capital-short countries. As most of these countries have little influence on the volume, timing, and structure of their migrating labour· force, labour outflow, fluctuating remittances, and remigration often result in external shocks on their vulnerable economies. Given the strong influence which labour emigration bears on key macro-economic aggregates and on the well-being of the population, its integration into the overall development planning is a sine qua non for sound economic strategies of the source countries. As a rule, however, migration policy largely consists of trial and ~rror reactions to already on-going developments. Over the last years, much empirical research effort has been devoted to the impact of labour migration on sending regions. Most of it is based on micro-level surveys, and on descriptions of economic changes which have occurred over a migration boom, without exact specification of causal relationships. The deduction of macro-economic changes from observed household behaviour is difficult and implies much speculation, yet. Therefore, maximizing the economic benefits from labour migration for the source country requires the application of quantitative methods based on macro models which can be used for assessing its impact and for stimulating alternative policy strategies considered for accompanying the process. The paper presents four methods which seem appropriate for that purpose, namely partial sectoral analysis by regression computations, cost-benefit analysis, social accounting matrices, and computable general equilibrium models. It considers their respective advantages for different ends, questions, and policy goals, and explains their data requirements.