Seventeenth Global Studies Conference

Abstract

The massive increase in labor migration to the Middle East during the past three decades has rivaled the historical trend in the West-bound migration of unskilled and semi-skilled workers. Using the framework of this temporary labor migration, member countries of the Gulf Cooperation Council (GCC) have coordinated policies on regulating the growing demand for labor while containing the broader social changes. This paper assesses how the policies on temporary labor migration have developed and impacted the landscapes of remittances and economic growth across the GCC countries. Despite paucity of time series data on labor migration and remittances and the associated methodological challenges, findings show that the experience with labor migration and its linkage with other aspects of economy have been quite diverse. Whereas labor migration has been a common policy strategy to expand the population and labor force, countries with higher incomes have sought to contain migration more tightly. The positive role of labor migration on personal remittances is detected, by addressing any endogeneity problem involving the levels of income and labor participation. The growth propelled by labor migration is associated with the declining reliance on oil revenues in the Gulf countries. While the goal of labor migration is to expand economic growth, economies with foreign workers at greater than 45 percent are likely to grow, with greater presence intensifying growth even further. The insights from this analysis covering the periods since 1990 are useful to understand the policy contexts and links of labor migration with remittances and economic growth.