Get rich or die tryin’

Maheshwor Shrestha

The World Bank

March 28, 2017

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 1 / 19

Introduction Motivation

Motivation

Over 1 billion individuals want to migrate abroad for temporary work(Gallup 2011).

Frequent reports of ‘bad’ migration outcome:About 500 die every year crossing the US-Mexico border.Over 5,000 individuals died in 2016 in the Mediterranean.Almost 1,000 migrants from Nepal, India and Bangladesh died in Qatarin 2012 and 2013.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 2 / 19

Introduction Motivation

Motivation

Over 1 billion individuals want to migrate abroad for temporary work(Gallup 2011).Frequent reports of ‘bad’ migration outcome:

About 500 die every year crossing the US-Mexico border.Over 5,000 individuals died in 2016 in the Mediterranean.Almost 1,000 migrants from Nepal, India and Bangladesh died in Qatarin 2012 and 2013.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 2 / 19

Introduction Motivation

Priors and beliefs on migration

Policymakers: there is over-migrationIndividuals overestimate the gains from migration.And underestimate the risks of migration.

→ with proper information, fewer people would choose to migrate.

Academic literature: observed migration is too lowHigh observed earnings disparity across locations

even within a country where institutional barriers to migration areabsent.

Migration improves income and welfare (example: Bryan et al. 2014,McKenzie et al. 2010, Clemens 2011).→ Individuals are not migrating to take advantage of the opportunities.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 3 / 19

Introduction Motivation

Priors and beliefs on migration

Policymakers: there is over-migrationIndividuals overestimate the gains from migration.And underestimate the risks of migration.

→ with proper information, fewer people would choose to migrate.

Academic literature: observed migration is too lowHigh observed earnings disparity across locations

even within a country where institutional barriers to migration areabsent.

Migration improves income and welfare (example: Bryan et al. 2014,McKenzie et al. 2010, Clemens 2011).→ Individuals are not migrating to take advantage of the opportunities.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 3 / 19

Introduction Overview

This presentation

Are potential migrants misinformed?misinformation on earningsmisinformation on mortality rate abroad

How does misinformation affect migration choices?

Answer these questions in the context of potential work migrants fromNepal to Malaysia and the Persian Gulf countries.

Randomized controlled trial (RCT) that provides information in thesedimensionsExamines the impact on:

expectations of earnings and mortality ratesactual migration decision

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 4 / 19

Introduction Overview

This presentation

Are potential migrants misinformed?misinformation on earningsmisinformation on mortality rate abroad

How does misinformation affect migration choices?

Answer these questions in the context of potential work migrants fromNepal to Malaysia and the Persian Gulf countries.

Randomized controlled trial (RCT) that provides information in thesedimensionsExamines the impact on:

expectations of earnings and mortality ratesactual migration decision

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 4 / 19

Introduction Overview

Presentation outline

1 Introduction

2 Context

3 Experiment design and empirical strategy

4 Does providing information affect perceptions?

5 Does information affect migration?

6 Conclusion

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 4 / 19

Context

Presentation outline

1 Introduction

2 Context

3 Experiment design and empirical strategy

4 Does providing information affect perceptions?

5 Does information affect migration?

6 Conclusion

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 4 / 19

Context Context

Recent international migration has surged drastically

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Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 5 / 19

Context Context

International migration from Nepal

Migration to countries outside India has increased drastically in recentyears.

driven by low-skilled male migration to Malaysia and the Persian Gulftemporary migration (each episode lasts 2 to 3 years).in many countries visa is tied with specific employer

Migration process is heavily intermediated:Potential migrants typically contact independent local agents.Local agents put them in contact with recruitment agencies.Recruitment agencies match the workers with firms or agencies abroad.

also arrange for visa, travel, clearances, permits, and other paperwork.

Both agents and manpower companies receive a commission.Potential for misinformation: financial incentive to distort information.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 6 / 19

Context Context

International migration from Nepal

Migration to countries outside India has increased drastically in recentyears.

driven by low-skilled male migration to Malaysia and the Persian Gulftemporary migration (each episode lasts 2 to 3 years).in many countries visa is tied with specific employer

Migration process is heavily intermediated:Potential migrants typically contact independent local agents.Local agents put them in contact with recruitment agencies.Recruitment agencies match the workers with firms or agencies abroad.

also arrange for visa, travel, clearances, permits, and other paperwork.

Both agents and manpower companies receive a commission.Potential for misinformation: financial incentive to distort information.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 6 / 19

Context Context

International migration from Nepal

Migration to countries outside India has increased drastically in recentyears.

driven by low-skilled male migration to Malaysia and the Persian Gulftemporary migration (each episode lasts 2 to 3 years).in many countries visa is tied with specific employer

Migration process is heavily intermediated:Potential migrants typically contact independent local agents.Local agents put them in contact with recruitment agencies.Recruitment agencies match the workers with firms or agencies abroad.

also arrange for visa, travel, clearances, permits, and other paperwork.

Both agents and manpower companies receive a commission.Potential for misinformation: financial incentive to distort information.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 6 / 19

Context Context

Policymakers feel that there is misinformation

Potential migrants may overestimate earningsIntermediaries have financial incentive to distort information to makemigration more attractiveAnecdotes about migrants dissatisfied with the job or payContracts may not be honored, or does not have enough informationabout over-time payNo publicly available and accurate source of information on actualearnings

Potential migrants may be facing high mortality risk‘Large’ death tolls reported in the media (2 coffins a day).Data on the number of deaths may be available, but difficult to findthe mortality rate

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 7 / 19

Context Context

Policymakers feel that there is misinformation

Potential migrants may overestimate earningsIntermediaries have financial incentive to distort information to makemigration more attractiveAnecdotes about migrants dissatisfied with the job or payContracts may not be honored, or does not have enough informationabout over-time payNo publicly available and accurate source of information on actualearnings

Potential migrants may be facing high mortality risk‘Large’ death tolls reported in the media (2 coffins a day).Data on the number of deaths may be available, but difficult to findthe mortality rate

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 7 / 19

Context Context

Example of media report of migrant deaths

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 8 / 19

Experiment design and empirical strategy

Presentation outline

1 Introduction

2 Context

3 Experiment design and empirical strategy

4 Does providing information affect perceptions?

5 Does information affect migration?

6 Conclusion

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 8 / 19

Experiment design and empirical strategy Study setting

Field study (January 2015)

Field study at the Department of Passport in Kathmandu.Sample: 3,319 males who intend to migrate for work in Malaysia orthe Gulf countries.

1,411 inexperienced potential migrants: have never migrated for workabroad.1,341 experienced potential migrants: Migrated before, but need tosearch for work567 have an existing job abroad, and are back on holiday.

Average age 27.5, average schooling of 7.5 yearsSimilar to current migrant population in the census

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 9 / 19

Experiment design and empirical strategy Study setting

Department of Passport in Kathmandu

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 10 / 19

Experiment design and empirical strategy Experiment design

Order of events

1 Collect data on basic demographics, contact information, previousmigration experience.

2 Ask their intended destination country.3 Information treatment provided on their chosen destination.

Verbal as well as shown in a card.4 Elicit beliefs about earnings and mortality rate abroad.

5 Follow-up phone survey 3 months later.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 11 / 19

Experiment design and empirical strategy Experiment design

Order of events

1 Collect data on basic demographics, contact information, previousmigration experience.

2 Ask their intended destination country.3 Information treatment provided on their chosen destination.

Verbal as well as shown in a card.4 Elicit beliefs about earnings and mortality rate abroad.5 Follow-up phone survey 3 months later.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 11 / 19

Experiment design and empirical strategy Experiment design

Randomized information treatment

Types of informationBasic information on national flows: provided to everyone.

Wage information: randomly assigned to one of 3 groupsNo wage information‘high’ information (average reported wages in 2013)‘low’ information (average reported wages in 2010)

Death information: randomly assigned to one of 3 groupsNo death information‘high’ information (death toll from a high incident district)‘low’ information (death toll from a low incident district)

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 12 / 19

Experiment design and empirical strategy Experiment design

Randomized information treatment

Types of informationBasic information on national flows: provided to everyone.Wage information: randomly assigned to one of 3 groups

No wage information‘high’ information (average reported wages in 2013)‘low’ information (average reported wages in 2010)

Death information: randomly assigned to one of 3 groupsNo death information‘high’ information (death toll from a high incident district)‘low’ information (death toll from a low incident district)

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 12 / 19

Experiment design and empirical strategy Experiment design

Randomized information treatment

Types of informationBasic information on national flows: provided to everyone.Wage information: randomly assigned to one of 3 groups

No wage information‘high’ information (average reported wages in 2013)‘low’ information (average reported wages in 2010)

Death information: randomly assigned to one of 3 groupsNo death information‘high’ information (death toll from a high incident district)‘low’ information (death toll from a low incident district)

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 12 / 19

Experiment design and empirical strategy Experiment design

Intervention message

Basic information:

Every month, XXXX people from Nepal leave for work inDEST

Wage information:

In YYYY, migrants to DEST earned NRs EEEE only in amonth

Death information:

Last year, NN individuals from DIST, one of Nepal’s 75districts, died in DEST

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 13 / 19

Experiment design and empirical strategy Experiment design

Intervention message

Basic information:

Every month, XXXX people from Nepal leave for work inDEST

Wage information:

In YYYY, migrants to DEST earned NRs EEEE only in amonth

Death information:

Last year, NN individuals from DIST, one of Nepal’s 75districts, died in DEST

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 13 / 19

Experiment design and empirical strategy Experiment design

Intervention message

Basic information:

Every month, XXXX people from Nepal leave for work inDEST

Wage information:

In YYYY, migrants to DEST earned NRs EEEE only in amonth

Death information:

Last year, NN individuals from DIST, one of Nepal’s 75districts, died in DEST

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 13 / 19

Experiment design and empirical strategy Experiment design

Sample information cards

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 14 / 19

Does providing information affect perceptions?

Presentation outline

1 Introduction

2 Context

3 Experiment design and empirical strategy

4 Does providing information affect perceptions?

5 Does information affect migration?

6 Conclusion

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 14 / 19

Does providing information affect perceptions? Impact of information on perceptions

‘Low’ death information lowers expected mortality rate

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Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 15 / 19

Does providing information affect perceptions? Impact of information on perceptions

Wage information lowers net earnings for the inexperienced

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Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 16 / 19

Does information affect migration?

Presentation outline

1 Introduction

2 Context

3 Experiment design and empirical strategy

4 Does providing information affect perceptions?

5 Does information affect migration?

6 Conclusion

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 16 / 19

Does information affect migration? Follow-up survey

Telephone follow-up survey (April 2015)

Conducted 3 months after the interventionhad collected the respondent’s, his wife’s and a family member’s phonenumbers.

Key purpose was to get information on their migration status.

Individual considered migrated if1 already migrated or will do so in 2 weeks2 phone is switched off or unavailable

not defined for refusals or confirmed wrong numbers.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 17 / 19

Does information affect migration? Follow-up survey

Telephone follow-up survey (April 2015)

Conducted 3 months after the interventionhad collected the respondent’s, his wife’s and a family member’s phonenumbers.

Key purpose was to get information on their migration status.Individual considered migrated if

1 already migrated or will do so in 2 weeks2 phone is switched off or unavailable

not defined for refusals or confirmed wrong numbers.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 17 / 19

Does information affect migration? Effect on migration

‘Low’ death information increases migration

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 18 / 19

Does information affect migration? Effect on migration

Wage information lowers migration for the inexperienced

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 18 / 19

Conclusion

Presentation outline

1 Introduction

2 Context

3 Experiment design and empirical strategy

4 Does providing information affect perceptions?

5 Does information affect migration?

6 Conclusion

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 18 / 19

Conclusion

Concluding remarks

Beliefs are crucial determinants of migration decision.Potential migrants (or, policymakers) may not have correctinformation on the risks and rewards of migration.

Misinformation persists even if a large segment of the populationmigrates.

May stem from the nature of the intermediation market.May stem from the inherent difficulty to learn about some risks.

Potential migrants do respond when information is provided.Large (welfare) benefit of providing information that matters to them.In this setting, on the net, misinformation has lowered migration.

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 19 / 19

Conclusion

THANK YOU!

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 19 / 19

Bibliography

Bryan, G., Chowdhury, S. & Mobarak, A. M. (2014), ‘Underinvestment in a profitabletechnology: The case of seasonal migration in Bangladesh’, Econometrica82(5), 1671–1748.

Clemens, M. A. (2011), ‘Economics and emigration: Trillion-dollar bills on thesidewalk?’, The Journal of Economic Perspectives pp. 83–106.

McKenzie, D., Stillman, S. & Gibson, J. (2010), ‘How important is selection?Experimental vs non-experimental measures of the income gains from migration’,Journal of the European Economic Association 8(4), 913–945.URL: http://dx.doi.org/10.1111/j.1542-4774.2010.tb00544.x

Shrestha (The World Bank) Get rich or die tryin’ March 28, 2017 19 / 19