Indians who migrate abroad see incomes double; residents need 20 years to catch up

Indians who migrate abroad often experience more than a 100% increase in their income levels whereas Indians who continue to work in their homeland often have to wait for over 20 years to get such a hike.

Indians who migrate abroad often experience more than a 100% increase in their income levels whereas Indians who continue to work in their homeland often have to wait for over 20 years to get such a hike. This explains why most Indians who go abroad do not return home even if they benefit from a wage premium on doing so. These conclusions are based on a recent World Bank report titled ‘Migrants, Refugees and Societies’.

Indians who migrate abroad experience an average 118% increase in their income levels (Chart 1). International migrants from Bangladesh and Ghana experience a 210% and 153% increase in income, respectively. The report states that one key driver for economic migration is the wage gap between the origin and destination country. A truck driver in Canada earns five times more than a truck driver in Mexico, even after adjusting for the difference in cost of living. Nurses in Germany earn nearly seven times more than nurses in the Philippines.

Chart 1 shows the average increase in income (%) due to international migration.

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Also read: Data | Sharp rise in Indians illegally crossing U.S. northern border from Canada

While the absolute gains in incomes after migration are higher for high-skilled workers, low-skilled workers also experience a multi-fold increase in income. The incomes of low-skilled Indians who migrate to the U.S. increase by 493%. The incomes of low-skilled migrants from Nigeria and Yemen increase by about 1,500%, the highest rise (Chart 2).

Chart 2 shows the income gains for low-skilled workers who migrate to the U.S. (in %).