The Benefits and Costs of Guest Worker Programs: Experimental Evidence from The India-UAE Migration Corridor; Professor Shing-Yi WANG (University of Pennsylvania)

Abstract

We estimate the returns to guest worker programs using a randomized control trial with several thousand job seekers in India applying to jobs in the United Arab Emirates (UAE). Working with construction companies and the UAE Ministry of Labor, we randomized visa and job offers to potential migrant workers at recruitment sites. We measured effects on labor market outcomes, well-being, social relationships, and work satisfaction, as well as on labor intermediation costs, assets and debt. We find that workers who received the randomized offer experienced 30% higher earnings, and migrating to the UAE doubled their compensation. However, they also paid substantial upfront costs to labor intermediaries. Workers offered a UAE job also experienced more diverse friendship and co-worker networks, but also report a significant fall in subjective well-being.