Pakistan Institute of Development Economics



Methods for Assessing the Impact of Temporary LabourEmigration

Over the last three decades temporary emigration I of labourforce has gained considerable importance for the economic development ofmany labour-rich and capital-short countries. As most of these countrieshave little influence on the volume, timing, and structure of theirmigrating labour· force, labour outflow, fluctuating remittances, andremigration often result in external shocks on their vulnerableeconomies. Given the strong influence which labour emigration bears onkey macro-economic aggregates and on the well-being of the population,its integration into the overall development planning is a sine qua nonfor sound economic strategies of the source countries. As a rule,however, migration policy largely consists of trial and ~rror reactionsto already on-going developments. Over the last years, much empiricalresearch effort has been devoted to the impact of labour migration onsending regions. Most of it is based on micro-level surveys, and ondescriptions of economic changes which have occurred over a migrationboom, without exact specification of causal relationships. The deductionof macro-economic changes from observed household behaviour is difficultand implies much speculation, yet. Therefore, maximizing the economicbenefits from labour migration for the source country requires theapplication of quantitative methods based on macro models which can beused for assessing its impact and for stimulating alternative policystrategies considered for accompanying the process. The paper presentsfour methods which seem appropriate for that purpose, namely partialsectoral analysis by regression computations, cost-benefit analysis,social accounting matrices, and computable general equilibrium models.It considers their respective advantages for different ends, questions,and policy goals, and explains their data requirements.

Beatrice Knerr

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