The Impact of Foreign Workers, Outflow Remittances on Economic Growth in Selected GCC Countries: ARDL Approach

Posted on November 7, 2016 Updated on November 7, 2016

In the past few years, the number of migrant workers increased noticeably due to demographic shifts, internal conflicts, climate change, and income inequality. For instance, around 150 million cross borders workers which account for around 60% of the world’s international migrants, are searching for employment and security abroad 1. In fact, each year millions of people leave their homes in search of employment in foreign countries. Furthermore, almost 90% of employees and their families living outside their country of origin are migrant workers. Importantly, migrant workers enhance the growth and development activities in their countries of destination, while their home countries get great benefits from their remittances and the skills acquired during their migration experience.

In Gulf Cooperation Council, the proportion of foreign workers to local workers is amongest the highest in the world. For example, in Qatar, 93% of workers are foreigners while in Saudi Arabia migrant workers are more than 51% of the labor-force. In United Arab Emirates, the foreign workers accounted for not less than 45% of the workforce, while in Jordan and Lebanon; migrants also make up a significant part of the workforce, particularly in sectors such as construction and domestic work. The ILO2 estimates that almost half of migrant workers in the region are women. However, those migrant workers contribute to economic growth in receiving countries and enhance other development activities, not only this but also expand workforce and encourages more business start-ups. In addition, they increase economic efficiency by supplying more labor to low- and high-skill labor markets.