The World Development Report released on Tuesday has revealed that Indian low-skilled workers who migrate overseas stand to gain a 120% increase in income, compared to just 40% in the case of internal migration.
The report indicates that those who migrate to the US could see a nearly 500% increase in income, with the UAE following at almost 300%. While highly skilled workers stand to gain the most, low-skilled workers can also experience a significant increase in income, depending on factors such as age, destination, language ability and skills.
According to the recently released World Development Report 2023, migration can result in significant wage increases for individuals whose skills and attributes align with the needs of the destination society. These gains can surpass what could be earned in the country of origin, even through internal migration to better-off locations.
The report highlights that the gains are so substantial that it could take decades for low-skilled workers to earn a similar income in their home countries, even with current rates of economic growth. Additionally, the benefits of migration can be shared with families and communities through remittances.
However, the report also acknowledges that migration has its costs, albeit smaller. For example, Indian workers going to Qatar spend two months’ earnings to cover migration costs, and it is even more expensive for Bangladeshi workers migrating to Kuwait, with costs estimated at almost nine months’ earnings.
The World Development Report 2023 estimates that there are currently 184 million migrants globally, equivalent to 2.3% of the population, including 37 million refugees.
The report categorises migrants into four groups: economic migrants with strong skills match (such as Indian IT professionals in the US or construction workers in GCC nations), refugees with skills in demand at their destination (such as Syrian entrepreneur refugees in Turkey), distressed migrants (such as poorly skilled migrants at the US southern border), and refugees (such as Rohingya in Bangladesh).
The World Development Report 2023 has identified India-US, India-GCC, and Bangladesh-India as among the top migration corridors worldwide, alongside Mexico-US, China-US, Philippines-US, and Kazakhstan-Russia.
The report highlights how remittances have increased in some countries with significant migrant populations, including India, Mexico, China, and the Philippines. It notes that Indian migrant workers in the UAE send nearly 70% of their income to their families, with women often remitting more.
Furthermore, the report points out that the migration of Indian workers from certain regions has led to internal migration. For instance, emigration from Kerala has resulted in relocation opportunities for workers from Kolkata.
The World Development Report 2023 also mentions that ageing and lower fertility rates in countries have resulted in migration. It argues that proper management of migration can provide benefits for both origin and destination societies.
The migration of talented Indians to developed countries has often been referred to as a brain drain by the media. However, according to the World Bank report, this phenomenon may have played a significant role in India’s IT revolution.
The report notes that many Indian techies have not only thrived in Silicon Valley but have also become an essential part of the Indian diaspora, which is the largest in the world. Individuals such as Sundar Pichai, Satya Nadella, and Arvind Krishna are prime examples of Indian migrants who have achieved great success in the US.
The report argues that these accomplished individuals have contributed to the development of industries in India by transferring knowledge and promoting innovation. For instance, the report notes that Indian migrants in California’s Silicon Valley have launched significant IT-related firms in India. In 2006, firms established by returnees accounted for approximately 90% of firms in software technology parks in Bangalore.