We all know that poverty is multidimensional and people become poor for various reasons. It then follows that to break the vicious circle of poverty and to escape from the poverty trap, there must be many different ways too. Many have suggested that education (and human capital development) is one of the long term solutions while micro finance can help the poor to build up badly needed capital to earn extra income to have a chance building up economic capacity to break out of poverty. Migration is another such route, seen by many poor people as a golden opportunity to get a (much) better paying job and earn extra income in destination countries so that they can escape poverty now, or at least in the next generation. I must stress that this migrating out of poverty is NOT something new but it’s been practiced for hundreds of years in Indonesia. Migration to expand one's horizon and human capability is something that is encouraged and praised in the traditional culture decorated with success stories.
In the above context, Indonesia is currently one of major labour exporting countries in the world, sending hundreds of thousands migrant workers annually to the Middle East and neighbouring countries, and receiving a significant amount of remittances estimated around $7 billion annually or 1.3% of country’s GDP (World Bank, 2011). These are just official figures as the actual number of migrants and amount of remittances must be much higher due to the significant number of irregular migrants from Indonesia. They send remittances through informal channels that make them undetected and unrecorded in the official statistics.
International migration from Indonesia has a long history and currently labour exporting has been acknowledged as part of the government’s policy to reduce unemployment and channel the increasing number of labour force in the domestic economy. The government has developed programs to facilitate the migration and new institution to manage the migration process. As a result, about 3% of all households in Indonesia now have at least one person who has migrated. These rely on remittances as their main source of income which contribute around 30 percent of their total income.
My research is focusing on the reasons behind the choice to migrate and the effectiveness of policies to maximise the benefits of migration. I am using economic and other data available from the National Socioeconomic Survey (Susenas) 2007 to examine the underlying migration dynamics including their determinants and characteristics at household and region levels.
I started working on this in September 2012 . My results so far indicate that there are strong factors in Indonesia that push people to migrate internationally. They seem to be driven out by factors representing “burdens” to the household which are negatively associated with “better socio-economic indicators”. They seem to be driven to migrate out of necessity, in a desperate attempt to make a better life regardless of all obvious limitations, especially in relation to their human capital. For example, in rural areas, older and female headed households (associated with poor households), and households with a higher number of children and older people tend to have a higher number of members who have migrated abroad, while households with higher per capita expenditures, having more infant, productive age and educated members, tend to send less numbers of migrants. The finding that better-off and more educated households tend to send less migrants is further confirmed by the job status of migrant household heads, which are relatively more in non-employee categories with the main source of income from agriculture sector.
An analysis of different regions reveals a consistent feature. Agriculture as main source of household income is influenced by rural variable while the per capita expenditure and average length of study of household members are affected by region. The findings also suggest that migrant households are not among the poorest ones conforming to the results of previous studies that highlighted international migration cost is still relatively very expensive for the poor that reduces the likely of them to participate directly in the migration process. For example, placement fee for an Indonesian to migrate to Singapore would be S$3000-S$3600 (equivalent to approximately $2,391 – $2,870), which is very expensive and beyond the reach of the poor (Platt, M. et. al. 2013).
Therefore, my research will provide evidence to maximize the benefits of migration and remittances. I will help policy makers to develop more comprehensive and proactive policies, which have a stronger pro-poor impact. This includes addressing the dynamic factors driving migration, improving the human capacity of the migrants, and better facilitating migration as a free choice - not one of necessity- for migrant workers.
Endang Sugiyarto is a doctoral candidate in Migration Studies at the University of Sussex, funded by the Migrating out of Poverty Research Programme Consortium.