Download International labour mobility

Agenda item 7
International labour mobility
Introduction
• Increase in international labour
mobility due to opening of borders
and markets, cheaper transportation,
widening international contracting
etc.
• Challenges both to measurement and
to analysis of the national accounts.
Background – offshore-outsourcing,
global manufacturing
• Growing offshore-outsourcing and global
manufacturing.
• This does not necessarily involve labour
mobility – could even lead to a decrease in
the movement of labour (call centers f.ex.).
• However, flow of workers involved, if
goods and services not easily sent across
borders – constructions, personal
services – or services, where there is a
danger of leaks or spill-over of knowledge
(R&D, innovation), which may endanger
the revenues of the enterprise.
Background – services rendered by nonresident self-employed persons
• Services rendered by foreign selfemployed persons, such as for
example lawyers, architects or
accountants (Mode 4 type of exports
of services).
• May be acquired by a foreign
enterprise, so that it may be
problematic to estimate the value of
the services.
• If within a multinational firm special
problems of transfer prices.
Background – persons seeking
employment in foreign countries
• Especially in professions, where skills are
not country specific and language is of less
importance – construction, agriculture f. ex.
• Some hired by foreign employment
agencies, and may be compensated partly
abroad.
• Others may work as self-employed
performing short-time work as plumbers,
painters, cooks etc. for households or small
enterprises.
• May arrive as registered foreign workers, but
stay on after permission expires and engage
in unregistered work.
Main problems
• The involvement of employers or
contracting agencies in other countries
makes coverage and classification
difficult.
• Unregistered employment may be
widespread.
• The distinction between supply of
services, which are part of a country's
exports and imports, and compensation
of employees, which is part of income
may be problematic.
Impact on national accounts
• All have impact on GDP, productivity, final
uses, income and international transfers.
• Impact of under-coverage of unregistered
labour on GDP or productivity depends
upon the ways production is estimated – if
NOE estimates based on work-hours, then
GDP is undervalued, but productivity may
be less affected. If GDP is estimated by
other means, then productivity may be
overvalued.
Impact on national accounts
• Misclassification of trade in services as
compensation of employees and vice versa
will affect GDP, productivity,
exports/imports, and income.
• Consumption expenditure will probably be
most affected, since expenditure in the
compiling economy of both registered and
unregistered employees, and also of
employed persons engaged by foreign
institutions is usually not covered in
household surveys, nor represented well in
tourism statistics.
Definitions and statistical
recommendations
• There are some slight deviations in inclusion
and terminology used in various frameworks –
in particular it should be noted that in national
accounts self-employed are part of the labour
force and therefore “international labour
mobility” includes movement of self-employed.
• But definitions and recommendations are
sufficiently harmonized to ensure that the
population, tourism and labour statistics
collected according to UN/ILO frameworks may
be used in the national accounts and balance
of payments without adjustments.
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International information – only few databases
OECD data on inflow of labour
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2007
Country experiences – inflow data
in the Czech Republic
• The Czech Republic has no single compulsory
registration system for foreigners, so that three
independent and overlapping databases
operated by (a) the alien police (residence
permits); (b) the employment bureau (work
permits), and (c) the trade licensing offices
(trade licenses) are used to obtain data.
• Estimates of foreigners by type - employees,
entrepreneurs and non-workers (students,
children and pensioners) and by country are
obtained.
• Number of illegal immigrants not covered in
the databases is estimated based on the
number of expatriated foreigners.
Country experiences – inflow data
in Israel
• In Israel there are different types of inflow of
labour: Jewish immigrants, which in most
cases become residents at the arrival,
border workers from the Palestinian
Authority, non-resident labour from
countries such as Romania, Ukraine,
Thailand, Philippines and China.
• Measurement is different for each type.
Country experiences – inflow data
in Israel (cont’d)
• Data on work and wages of Jewish
immigrants may be obtained from
household surveys, since they are
residents.
• Data on work and wages of employed
persons from the Palestinian Authority are
obtained from the PCBS labour force
survey, which also covers activity outside
the Palestinian Authority.
Country experiences – inflow data
in Israel (cont’d)
• Data on other registered non-resident
employed persons are obtained by
combining various administrative data on
inflow, outflow and stocks of persons
entering with a work permit.
• In addition administrative individual data on
inflow and outflow of persons entering with
tourism visas are matched, and stocks of
unregistered employed persons are
estimated using various assumptions.
Country experiences – inflow data
in Israel (cont’d)
• Data on compensation of registered
employees is available from the National
Insurance Institute.
• For the national accounts annual average
data and distribution of unregistered
employed persons and their CE by industry
is estimated using partial information and
various assumptions.
• Consumption expenditure of non-residents
is estimated using household survey data
for a few non-resident families covered in
the survey.
Country experiences – outflow
data in Moldova
• Detailed data on outflow of labour and
remittances are measured in household
surveys performed by the CBSAXA with
IOM.
• Among other things the number of persons,
who were abroad at the time of the survey
and still a member of a household in
Moldova are measured. The year of their
first departure abroad, destination country
and plans to go abroad are also measured.
Country experiences – outflow
data in Moldova (cont’d)
• Questions on employment and income are
included, and provide data, which are
especially difficult to obtain, when only
inflows of labour are measured.
• For example are data on illegal residence
status and monthly income obtained.
• One of the surveys is conducted as a panel
survey, so that the behaviour of the persons
working in another country compared to
their original plans may be followed over
time, and their status as residents may be
determined.
Measurement proposals - inflows
• Data on inflow of labour and CE by combining
administrative data on residence permits, work
permits, social security recordings, tax
recordings etc.
• Estimates of unregistered labour by combining
individual data on entrances and exits at
border control under certain assumptions.
• Household surveys mostly only cover
residents, so only a partial picture of inflow of
labour. But could be extended to include some
non-residents.
• Using enterprise surveys has not been
explored, but could be a good alternative,
providing data on payments and productivity.
Focus on relevant industries.
Measurement proposals - outflows
• Measurement of outflows through household
surveys may provide better measurement of
work hours and wages, and give better
information on the nature of employment, kind
of activities, and consumption expenditure
abroad. Unregistered labour abroad may also
be covered.
• ILO labour migration module is currently being
tested and seems a useful basis for such
surveys, although questions might have to be
added for national accounts purposes.
Measurement proposals – combining
measurement in partner countries
• Cooperation between countries in mirror
exercises with comparisons between data on
inflows in one country and on outflows in
another.
• Sharing data from enterprise surveys in
partner countries, with separate data for multinational enterprises. The data from enterprise
surveys would need to include separate
information on persons employed or rendering
services by country.
• Data on relevant countries, and relevant
classes of enterprises for labour mobility may
be of help in establishing such cooperations.
Analysis
• An analytical framework for correct integration
of the data in the national accounts, presented
in a way that allows users to analyze the
impact of non-resident labour on productivity,
wages, household expenditure, GDP and
national income.
• An extended and detailed classification of
labour input with links between labour
statistics, and national accounts is proposed:
• Use of a social accounting matrix framework
as a satellite account or as a labour account
integrated in the national accounts, and with
added details to the core national accounts.
Details on inflow and relevant
transactions
• Inflow of non-residents should be classified to
enable the correct integration in the national
accounts and the balance of payments. The
classification given in MSITS 2010, where
tourism and migration data are combined,
could be adopted, but changed a bit.
• Transactions may also be classified according
to residence of institutions and employed
persons involved, in order to see which
transactions are relevant to the compiling
economy, and need to be registered in the
national accounts and the balance of
payments.
Employment and income of non-residents by type of institutional unit, length of stay and industry
Code
Total
Agriculture
Manufacturing
A-M
A
B
Electricity
and
water supply
Construction
(building and
civil engineering
projects)
C
D
Employed persons
In domestic institutional units
Employees
Border crossed daily or weekly
Stay one week - 3 months
Stay 3 to 12 months
Foreign institutional units
Self-employed
Border crossed daily or weekly
Stay one week - 3 months
Stay 3 to 12 months
Work hours
In domestic institutional units
Employees
Border crossed daily or weekly
Stay one week - 3 months
Stay 3 to 12 months
Foreign institutional units
Self-employed
Border crossed daily or weekly
Stay one week - 3 months
Stay 3 to 12 months
Compensation of employees
In domestic institutional units
Employees
Border crossed daily or weekly
Stay one week - 3 months
Stay 3 to 12 months
Mixed income
Foreign institutional units
Self-employed
Border crossed daily or weekly
Stay one week - 3 months
Stay 3 to 12 months
Community,
social, personal
and other
services
..
M
Other extensions to accounts
• Ideally labour accounts should also be
detailed by partner countries to allow for
international comparisons of data. A subclassification by gender may also be
helpful.
• Other accounts that may be subdivided to
correspond to the labour accounts and
allow analysis of flows linked to nonresidents' activities:
Accounts of production and net value
added, household expenditure and income,
exports and imports, income paid and
received from abroad.
Conclusion
• The challenges to measurement and
analysis due to increase in international
labour mobility are not easy to overcome,
and new collection of data and new
analytical frameworks are needed.
• Existing country experience and new
initiatives by international statistical
agencies provide some of the solutions, but
further work is needed.
• Important to explore international
cooperation, combining different sources of
data including enterprise surveys and
performing mirror exercises.
Conclusion
• Needs for improved analytical frameworks
may be met by adding SAM or integrated
labour accounts to the usual national
accounts, linking between labour statistics,
and national accounts.
• The proposed framework should be tried on
data from other countries with different
structures of inflow or outflow of labour and
services rendered by persons, to ensure
that the proposal fits the various analytical
problems encountered.