Possible Key Indicators of Labour Migration

1. Possible Key Indicators of Labour Migration

2. 1 Existing Labour Market Key Indicators For Labour Market Information Systems (LMISs), there are already international standards for indicators reflecting the overall labour market (ie, not focused particularly on the migration element). These are the ILO Key Indicators of the Labour Market (KILMs), as follows:- 1. Labour force participation rate 2. Employment-to-population ratio 3. Status in employment 4. Employment by sector 5. Employment by occupation 6. Part-time workers 7. Hours of work 8. Employment in the informal economy 9. Unemployment 10. Youth unemployment 11. Long-term unemployment 12. Time-related underemployment 13. Inactivity 14. Educational attainment and illiteracy 15. Average monthly wages 16 Hourly compensation costs 17. Labour productivity 18. Poverty, income distribution and the working poor There are also common standards for recording occupations (and qualifications), which is recommended to make comparisons between different sources of data. However, these indicators do not give information specifically regarding labour migration.

3. 2. What Sort of Questions are of Interest? - Source Countries There are a variety of labour migration policy interests that source countries may wish to be reflected by Labour Market Information Systems. For example:- • Skill loss during the period the migrant is absent (which could be permanent). • Source countries benefiting from the extra skills that returning migrants may have developed • Reduce unemployment • Avoiding brain drain, and ensuring a return on the investment in education of their nationals • Extent of remittances, and their role in increasing the standard of living of migrants and non-migrants • Migration patterns may indicate the health of the overall economy, or identify areas where job creation might be desirable • Depopulation (loss of tax revenue, etc) • Leaving behind an older population, due to the age profile of emigrants

4. 3. What Sort of Questions are of Interest? - Host Countries • Assessment of skills needed versus supply • Identifying areas where training is needed to up-skill workers to fill shortage occupations • Skill transfer from migrants to host countries • Regulating labour immigration to be restricted highly skilled workers, or to specific occupations where shortages of labour may exist • Effect on size of population • Protecting unemployed local/domestic workers from competition for jobs (Particularly where unemployment is high) • Maintaining or reducing salaries for local/domestic workers (depending on the state of a given economy) • Effect of large-scale immigration on social cohesion Migration has the potential for both opportunities and risks, for both the source country, and the host country. The extent to which these opportunities or risks are realized may depend upon the attributes of the migrant (such as their level of skill or qualification). Clearly, effective policy-making is facilitated by the availability of detailed data. The above questions require indicators to be subdivided by occupation, to address potentialmismatchbetween labour supply and demand at the occupational level.

5. 4. What sort of data are required? – Stocks Census, and surveys such as LFS can be a useful snapshot of the stock of foreign nationals in a country, and may give information about (for example) the length of residence in that country. However, these data sources have the following weaknesses:- • They give limited information about flows of new migrants • They may give no information about those who have emigrated (except in cases where the survey has a longitudinal element) For surveys, the sample size constraint, combined with the relatively small proportion of foreign nationals may limit the level of detail that information can be extracted for (for example, breakdowns of foreign workers by both occupation and qualification).

6. 5. What sort of data are required? – Flows Data focusing on the migration aspect of labour have the potential to benefit and augment LMISs in the following ways:- • It is directly related to flows of individuals, which represent dynamic aspects of labour market trends • It could specifically target groups which may be a statistically insignificant minorities in some survey data (such as foreign nationals in particular occupations). - This may particularly be the case where migration data are captured in administrative sources for almost all migrants. • Emigration data fills the biggest gap which surveys cannot usually address (as these groups would simply be absent from such surveys). • It could be compared to data on labour shortages to understand their interrelationships • It can help to predict what proportion of those who migrate will ever leave from the host and/or return to their country of nationality

7. 6. What sources of data exist that are relevant to labour migration? As detailed in the IOM Best Practices Paper, an Ideal LMIS might be composed of the following elements:- • Labour statistics • Labour market needs assessment • National qualifications register • Register of jobseekers • Register of job offers • Information by private placement agencies • Dissemination of international job offers • Register of nationals abroad • Register of foreign residents • Labour market observatories In addition to the above sources, there is a range of data related to:- • Passenger flows (surveys or administrative) • Visas granted (administrative) • Border Control (administrative)

8. 7. Extracting Migration-Relevant Indicators from these Data Sources Of the national data sources previously outlined it is possible to mainstream migration within some of these data sources, to provide the country with migration information, for example by providing nationality breakdowns in labour market statistics, especially with regard to some of the ILO Key Indicators of the Labour Market. However, given that many of the source countries examined in the IOM Best Practices Paper had limited capacity to produce this range of data, it makes sense for host countries to develop key indicators which can be shared with source countries to augment their own data sources. This can be done by providing nationality, residency or country of birth breakdowns of census, labour market and other national data, in addition to migration data. Some relevant migration data related to stocks and flows of migrants are already shared within the online OECD database. Because this data pertains to countries in the OECD region, it contains migration data for many of the large host countries, and is therefore of particular use to source countries, to augment their own migration data. Similarly, the UNECE has an online database containing some migration data for CIS countries.

9. 8. Exchange of Coherent Contextual Migration Data Before considering in detail indicators for each of the policy interests that have been identified, it is necessary to consider contextual migration variables, which facilitate a contextual understanding of migration between source and host countries. Whilst it is desirable to have single-dimensional indicators for the sake of simplicity, the fact that migration is a phenomenon that exists between pairs of countries means that nationality breakdowns must be made available in data that is shared between host and source countries. Furthermore, the fact that migrants can change their nationality necessitates country of birth breakdowns to be made available to allow a comprehensive understanding of migration. - For the purposes of the rest of this presentation, it is helpful to define host and source countries according to the country of birth of the individuals, rather than based on nationality. Whilst country of birth is irrelevant from the perspective of migration law, country of birth breakdowns are essential for fully understanding migration, and can be particularly useful in instances for individuals who possess multiple nationalities. Only by providing data by nationality and country of birth breakdowns, can coherency of data produced by source and host countries be established. Useful data to shared by each country on a yearly basis, to contextualize labour migration include:-

10. 9. Stock of working age resident population • The stock of working age resident population, by • occupation, • salary (if possible from sample size), • qualifications (if possible from sample size), • nationality, and • country of birth It should be noted that the foreign-born segment of this population may include individuals who did not enter the country as labour migrants, but may also include other groups, such as students or family members, who may also have the right to work in that country, possibly on account of gaining permanent residence or citizenship status.

11. 10. Inbound Labour Immigrants • Inbound labour migrants (ie, those intending to change country of residency for at least 1 year, for work purposes), by • occupation (if known –ie, where a job has been acquired prior to migration), • salary (if known), • qualifications, • nationality, • country of birth, • country of previous residence In source countries, nationality and country of birth are useful in identifying returning migrants, either in the case of retaining their nationality, or in the case where they have changed nationality. In host countries, nationality and country of birth can help to understand whether

12. 11. Outbound Labour Emigrants • Outbound labour migrants born in the country (ie, those intending to change country of residency for at least 1 year, who are either leaving for work purposes, and born in that country), by • nationality, • country of next residence • last occupation • last salary • qualifications,

13. 12. Leaving former Labour Immigrants • Former labour immigrants leaving the host country (ie, those intending to change country of residency for at least 1 year, who were not born in the country, and who originally entered for work purposes) • nationality, • country of birth, • country of next residence • reason for leaving • first occupation when they arrived in the country • occupation in country of next residence (if known - ie, where a job has been acquired in country of next residence prior to migration) • first salary when they arrived in the country • salary in country of next residence (if known) • qualifications when they entered, • qualifications upon leaving

14. 13. Returning former Labour Immigrants It should be noted that just because a former labour immigrant is emigrating from the host country does not imply that they are returning to the source country. – Instead, they may be emigrating to a third country, possibly after changing their citizenship. For this reason, we propose the following data to be shared by source countries: • Former labour immigrants re-entering the source country (ie, those intending to change country of residency for at least 1 year, who were born in the country, and who originally emigrated for work purposes) • nationality, • country of previous residence • first occupation in host country when they left the source country • new occupation now that they return to the source country (if known - ie, where a job has been acquired in source country prior to return migration) • first salary in host country when they left the source country • new salary now that they return to the source country (if known) • qualifications when they left the source country • qualifications upon leaving now that they return to the source country

15. 14. Individuals gaining permanent residency and citizenship This helps to get an idea of numbers of immigrants who will stay permanently in the host country, possibly by changing citizenship. However, this information is only useful if it can be restricted to those individuals who entered the host country for work purposes. • Individuals gaining permanent residency status, by • nationality (or nationalities, if recorded and significant) • country of birth • Individuals gaining citizenship status, by • Country of residency • former nationality (or nationalities, if recorded and significant) • country of birth

16. 15. Issues not addressed by this migration data Whilst the set of data proposed above would give an excellent and coherent understanding of labour migration stocks and flows between countries, it does not directly tackle the following questions • What are time time delays between migration and other events?, such as • leaving host country (duration of presence) • return to source country (duration of absence) • attaining permanent residency and/or citizenship status • What proportion of labour migrants never leave the host country, or never return to the source country? These questions have implications for the issues of brain-drain, control of population size, and social cohesion.

17. 16. Labour Immigrants who leave have different occupations to those who stay Whilst source countries are able to obtain data from returning migrants, this can only give a partial picture, and may have different attributes to those who stay. For example, UK research indicates that labour migrants who attain permanent residency after 5 years tend to engage in different occupations to their peers who don’t*. This allows brain drain to be compared across different occupational groups. For this reason, an ideal LMIS would involve host countries collecting cohort data of labour migrants to indicate labour migrants’ propensity to remain permanently in the source country, along with the typical duration in the host country for migrants who leave it. Some such data of this sort, subdivided by nationality of the migrant is already available**, which indicates that duration of stay can depend on nationality and purpose of immigration (work, study, etc). *Jones & Eaton (2012), “Analysis of Tier 2 General Migrants: Previous Salary and Occupation of those Eligible to Apply for Settlement”, Home Office, UK **Achato et al. (2011), “The Migrant Journey Second Report”, Home Office, UK

18. 17. L ongitudinal Labour Immigrant Cohort Information Therefore we propose the following cohort data be made available by source countries to share with host countries. • Estimated propensity of labour migrants to attain permanent residency status in the host country, by initial occupation salary, qualifications, nationality and country of birth. • Estimated average duration of stay for those migrants who never attain permanent residency staus in host country

19. 18. What policy questions are addressed? – Source Countries

20. 19. What policy questions are addressed? – Host Countries

21. 20. What further indicators are required? The tables on the previous slides indicate that extra labour market information is required, particularly in terms of labour demand and skills (mis)match. Given that host countries are likely to want to allow labour immigration in order to fill labour market shortages within that country, we now consider how to measure such labour market shortages. (We do not consider flows of migrants who are investors, or entrepreneurs for this exercise, as we do not regard them as being labour migrants.) Additionally, it is important to consider skill mismatch with occupations for those employed. The OECD runs a number of surveys (PISA and PIAAC surveys) focused on skills and skills mismatch, although these surveys are focused on OECD countries. Ideally, it would be desirable to have similar data available for migration source countries also. However, it may not be the case that over-qualification or over-skill of labour is a driver of migration from source countries, since many migrants engage in jobs for which they are over-qualified in host countries* *OECD (2009), “Managing low-skilled labour migration”, MAC International Conference

22. 21. Labour demand and supply indicators There is no universal definition of skilled labour shortages, and Labour shortages are not easy to measure*. However, the following examples illustrate some indicators used to monitor labour shortages in the UK (we recommend that all of these indicators be broken down by occupation):- • Proportion of skill shortage vacancies as identified by employers. (Through business surveys) • Growth in relative earnings in an occupation in the recent past (LFS) • Earnings return to vocational qualifications (LFS) • Price rises in product markets (Price index data) • Changes in number of vacancies in an occupation (recruitment agencies, or business or vacancy surveys). • Duration of vacancies before a post is filled (recruitment agencies, or business or vacancy surveys). *OECD (2003), “OECD Employment Outlook”, OECD Publishing Paris, p.103.

23. 22. Labour demand and supply indicators (continued) • Changing vacancy rate: Ratio of vacancies to employment, unemployment or number of economically active (LFS and recruitment agencies, or business or vacancy surveys) • Unemployment rate among people by previously occupations (LFS or unemployment records) • Evidence of skill supply and demand, including age profile of workforce and retirements etc. (A range of data could be used to look at skill supply and demand, including the OECD PISA and PIAAC surveys) • Prevalence of overtime working or changes in its prevalence. (LFS) • Rate of promotions (if available from any survey) • Rate of staff turnover (LFS or other survey) • Extent of outsourcing to/from other countries (if available from any source) • Training and training expenditure (LFS or other survey) • Changes in attractiveness of overall employment packages for an occupation (if available from any source) • Reason for leaving last job/ reason for looking for new job (LFS or other survey)

24. 23. Skill/Qualification Mismatch To understand skill mismatch, it would be useful to break this down between foreign and local workers, to understand its extent. Skill mismatch is the very reason why we recommend breakdown by occupation for our indicators. In particular, it can address the specific questions of • Does being over-qualified cause workers to emigrate for other work? • If so, why are so many immigrants over-qualified for the work they do in host countries? There is only limited data on mismatch between workers skills and the occupation they do. Whilst some data does exist from the OECD PISA survey, this is heavily focused on literacy and numeracy, rather than complex skill sets often requested for vacancies in developed economies. Although OECD are in the process of conducting a more developed survey of skills (the PIAAC survey), for the time being it is necessary to confine ourselves to examining mismatch between jobs and qualifications. We therefore propose the following indicator to represent qualification mismatch – both of immigrants in host countries, and of native workers in source countries:- • Percent of low-skilled jobs whose holders had at least upper secondary education • by occupation • by nationality • by country of birth

25. Summary To incorporate indicators that reflect migration into Labour Market Information Systems, it is necessary to include many indicators, along with many detailed breakdowns. This is because:- • To share migration data between host and source countries, it is necessary to understand links between:- • Migration and labour market outcomes • Past migration and current stocks of foreign-born individuals (related to brain-drain, and population sizes) • Current migration patterns and long-term migration outcomes (e.g., leaving the host country, returning to the source country, becoming a permanent resident, changing nationality) • When labour migration is measured in less detail, mismatches may exist • Between jobs held by migrants and their skills/qualifications (both native-born and foreign) • Between job vacancies and the skills/qualifications of immigrants and existing unemployed workers • There is no universally-agreed way of measuring labour market shortages* In short, an economy is an ensemble of different professions and groups of workers, so understanding its interaction with migration requires detailed information, to represent this internal structure. *OECD (2003), “OECD Employment Outlook”, OECD Publishing Paris, p.103.