Migration and Remittances : The Impacts of a Government Intermediated International Migration Program

This report evaluates the impacts of a government intermediated temporary international migration program on the migrants and their families. In 2012, governments of Malaysia and Bangladesh initiated a government intermediated worker recruitment scheme for Bangladeshi men to migrate for work in the palm-oil sector of Malaysia. To fairly allocate limited recruitment spots to an overwhelming number of interested applicants, the government of Bangladesh conducted a lottery in early 2013. This report exploits the lottery design to evaluate the impacts of temporary international migration for low-skilled work. Migration drastically improves the welfare of the migrants and their families in Bangladesh. Migration more than triples the migrant’s income which consequently doubles total household income through increased remittances. Higher household income is translated to higher consumption, lower poverty (at higher thresholds), and better living conditions for the household members. Migration also improves household debt position and increases financial security. Migration of male members significantly increases the role of women in the household through greater involvement in household decision-making. Further descriptive analysis shows that, relative to privately intermediated migration, government intermediated migration lowered the cost of migration and provided opportunities to those without social network connections abroad. Migrants under the government intermediation were also more likely to have taken necessary permits, insurances, as well as language and skills training prior to departure. In addition to the higher incomes abroad, these features of government intermediation also contributed to the high returns from migration. These findings have policy implications to improve access to and returns from temporary international migration.