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Title: Measuring the Spatial Misallocation of Labor: The Returns to India-Gulf Guest Work in a Natural Experiment
Citation Type: Working Paper
Publication Year: 2019
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Abstract: 'Guest workers' earn higher wages overseas on temporary low-skill employment visas. This wage effect can quantify global inefficiencies in the pure spatial allocation of labor between poorer and richer countries. But rigorous estimates are rare, complicated by migrant self-selection. This paper tests the effects of guest work on Indian applicants to a construction job in the United Arab Emirates, where a crisis exogenously influenced job placement. Guest work raised the return to labor by a factor of four, implying large spatial inefficiency. Short-term effects on households were modest. Effects on information, debt, and later migration were incompatible with systematic fraud.
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Authors: Clemens, Michael A
Series Title: CGD Working Papers
Publication Number: 501
Institution: Center for Global Development and IZA
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Publisher Location: Washington, DC
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
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