Economic Growth without Jobs Fuels Migration

Governments of migrants’ countries of origin could be doing much more to harness the phenomenon of labor migration toward inclusive growth, according to a new report that investigated high-migration communities in Indonesia.

The study, which examined the role of labor migration in achieving the aims of an inclusive growth agenda in origin countries, looked at communities in West Nusa Tenggara, the Indonesian province that sends the highest ratio of its population for overseas work. It found that wages sent home by Indonesians who migrate for work are not supporting local job creation in origin communities. Further, it finds that the poorest communities in Indonesia are most likely to send migrants into informal economy jobs.

“Remittance capital (the money sent home by migrant workers) has not stimulated broad-based economic development complete with an increase in job opportunities … in spite of migration from these localities of more than 30 years,” the report states. As a result, “community members cannot envision a future in which the demand to migrate has ceased.”

“Labor Migration and Inclusive Growth: Toward Creating Employment in Origin Communities” also found that Indonesian workers’ main incentive for migrating out of the country is not dire poverty nor lack of jobs at home but a lack of just jobs—those that provide a stable salary and opportunities for economic mobility.

While Indonesia is facilitating a slow transition in its overseas workforce from informal economy work to jobs in the formal economy, migrants from West Nusa Tenggara, who are among the poorest and primarily women, still have few options except jobs as domestic workers. The uneven pattern of international migration across the country is a result of inequitable access to education, training and capital across regions at home.

While Indonesia is facilitating a slow transition in its overseas workforce from informal economy work to jobs in the formal economy, migrants from West Nusa Tenggara, who are among the poorest, are primarily women and still wind up in jobs as This uneven pattern of international migration across the country is a result of uneven access to education, training and capital across regions at home.

“The [Indonesian] government sees return migrants primarily as consumers rather than producers. Moreover, it values remittances more for their ability to improve Indonesia’s balance of payments and reduce foreign exchange shortages, rather than for their potential to serve as start-up capital for job-creating enterprises,” the report notes.

The report concludes that an “economic growth agenda in countries like Indonesia that does not entail a roadmap for creating employment opportunities in communities of origin lacks inclusivity.”

JustJobs Network produced the report, supported by the Solidarity Center with U.S. Agency for International Development funding. The report is part of the Center’s Transformation of Work research series, which is designed to expand scholarship on and understanding of issues facing workers in an increasingly globalized world, and supports the efforts of the Solidarity Center and its partners to document challenges to decent work and the strategies workers and their organizations engage to overcome those challenges.

See all Solidarity Center-supported reports on migration.