A social evaluation of external migration of labor using the World Bank approach: A case study of Pakistan

Shujaat Ali Khan, Fordham University

Abstract

The process of external migration of labor has affected the socio-economic system of Pakistan in many different ways. Whether this economic activity has contributed to Pakistan's development problems, prospects, or both, has been the subject matter of this study.^ Following the World Bank Approach, this study was used free public income expressed in foreign exchange as the Numeraire.^ All conversion factors and distributional parameters have been estimated in two sets. In Set I values of the parameters have been estimated by taking the average values of the economic variables across the period 1978 through 1983. In Set II values of the parameters have been estimated by taking the average values of the relevant economic variables across the period 1983 through 1988.^ In social pricing of costs and benefits, the Government's stated and revealed preferences to growth and equity have been used as the basis for the assignment of values to the subjective parameters included in this analytical apparatus.^ Since the major benefit that accrues to Pakistan is the receipt of foreign exchange in return to the outflow of labor services, therefore, social benefits and costs are expressed in terms of Shadow Wage Rates. Whereas the Shadow Wage Rate of emigration (SWRm) measures the Social benefits the Shadow Wage Rage of emigrant labor in the domestic economy (SWRd) measures the social costs associated with the emigration of a marginal worker. The social worth of emigration of labor, at the margin, is determined by taking the difference of the two Shadow Wage Rates.^ The analytical results of this study have shown that emigration of labor has reduced domestic unemployment, particularly in the market for unskilled labor. The inflow of foreign funds has eased the balance-of-payments constraint. ^

Subject Area

Finance|Labor economics|Social structure

Recommended Citation

Khan, Shujaat Ali, "A social evaluation of external migration of labor using the World Bank approach: A case study of Pakistan" (1990). ETD Collection for Fordham University. AAI9105786.
http://fordham.bepress.com/dissertations/AAI9105786

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