Low-skilled emigration, remittances and economic development in India

Abstract

ABSTRACT This study explores the recent trends, state-wise changing patterns and determinants of low-skilled emigration from India to Gulf Cooperation Council using both familiar and unexplored sources of data. Moreover, it examines the developmental impacts of remittances in India at a great detail. We find that Indian diaspora across the globe is on the rise, with a shifting destinations from backward Asian regions to relatively advanced regions of the North America, Europe and Oceania. In India, when a state is backward in terms of development and well-being, it had the tendency to push its labour to the low-skilled migration streams, with a tendency to ‘withdraw’ when the state advances further. Poverty and unemployment are among the major determinants of the low-skilled emigration in India. Although we do not find any direct impact of remittances on growth of Gross Domestic Product (GDP), its impact on development and well-being is enormous. As overall unemployment is rising, a pro-emigration foreign policy is the immediate need of the hour. Moreover, endorsing skill development of youths could sustain overall development through increased skilled emigration to the North America, Europe and Oceania regions, and consequently increased inflow of remittances in the long run.