Indian Migrants Double Their Incomes Overseas- Outpaces Domestic Income Growth

The Wage Gap and Migration

One of the key drivers behind this migration trend is the substantial wage gap between India and many developed countries. The report highlights that a truck driver in Canada earns five times more than their counterpart in Mexico, while nurses in Germany earn nearly seven times the salary of nurses in the Philippines. These disparities create a powerful incentive for individuals seeking better economic opportunities.

The image below indicates the average increase in income (%) due to international migration.

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Income Gains for High-Skilled and Low-Skilled Workers

While high-skilled workers often experience greater absolute gains in income after migration, low-skilled workers also benefit significantly. Indian migrants with low skill levels who move to the United States, for example, see their incomes increase by 493%. In countries like Nigeria and Yemen, the income growth for low-skilled migrants is even more dramatic, reaching approximately 1,500%.

Lucrative Opportunities in the Gulf Countries

The Gulf countries, such as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, also offer substantial income growth for Indian migrants. The report found that the incomes of low-skilled Indian migrants to these countries surge by 118%, with the United Arab Emirates providing a particularly lucrative opportunity, offering a 298% increase in income.

Potential Income Gains and Comparison to Domestic Growth

The potential income gains are highest when individuals move from low to high-income countries. A non-migrant from India would need a staggering 24 years of economic growth to match the gains made by an Indian who migrated to a high-income country. For migrants from Bangladesh or Ghana, the time required to achieve similar gains is even longer, at 43 years and 78 years, respectively.

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Return Rates and Factors Influencing Migration

Despite the significant financial benefits of migration, the report also notes that about 40% of all migrants eventually return to their country of origin. However, the return rate varies significantly depending on the destination country. While all migrants leave the Gulf Cooperation Council countries, between 20% and 50% of migrants leave OECD countries within five to ten years of arrival or move to a third country. The United States has a lower return rate, with less than 20% of migrants leaving.

For those who do return voluntarily, the experience can be positive. Migrants often benefit from a wage premium upon their return, especially if they are high-skilled workers. However, those who are forced to return may face poorer socio-economic outcomes.

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- Rajneesh Kumar