Return Migration and Labor Market Outcomes : Evidence from South Asia

Despite the magnitude of return migration from overseas to South Asia, the labor marketoutcomes of return migrants to this region have been understudied. This paper aims at filling this gap byexamining systematic differences between the labor market outcomes of return migrants and nonmigrants in Bangladesh,Nepal, and Pakistan using nationally-representative surveys that include information on past migration. Conditionalregression analysis is used with a focus on four labor market outcomes: (i) labor force status (ii) sectoral choice(iii) employment type, and (iv) earnings. The paper finds that return migrants are somewhat less likely to be employedthan nonmigrants, which is mainly driven by returnees who returned at an older age. As evidenced in other contexts,return migrants in Bangladesh and Pakistan are more likely to become entrepreneurs compared with nonmigrants.Self-employed returnees are also more likely to hire paid employees and to be engaged in non-farm activities, comparedwith nonmigrant entrepreneurs. Return migrants who become employees earn a small wage premium relative to nonmigrants,compared with contexts where temporary migrants are higher-skilled. The returnee wage premium, however, islarger in the construction sector where most temporary migrants were employed overseas.