Social Protection for International Migrants Robert Holzmann Human Development Network – Social Protection and Labor The World Bank Migration and Development Conference May 23, 2007

60 to 90 percent of youth in developing countries have a strong desire to migrate temporarily, if the legal opportunities were there, but only 23 percent would move permanently

Return rates of youth migrants are high; average Mexican youth migrant returns at age 24, after 3 years abroad; (Albania: 25 after 7 months) Source: McKenzie 2006

Turkey: Ratio of official outflows to inflows of Turkish nationals for selected host countries (%)

Questions of Interest Given this (intended) circularity of migration  How well does the social protection of migrants, who move between different social systems, work?  Is social protection for migrants an obstacle to circularity?  What are the implications for social security systems? Roadmap 1.What is social protection for migrants? 2.What do we know and what are the gaps? 3.What can the Bank do?

1. What is social protection for migrants? Access, Portability, and Labor Markets Access to social services  In host country, for migrants and their families  In home country, for returning migrants and families left behind  What services (public, private, occupational): social security, safety nets, healthcare, education, housing; Portability of social security entitlements  Ability to preserve vested social security entitlements and those in the process of being vested, independent of nationality and country of residence Labor markets for international migrants:  Recruitment process in home country  Relation b/w immigration policy and LM in host countries

2. What do we know and where are the gaps? …on Portability Regimes I. Access to social security benefits and advanced portability regulated by bilateral agreements II. Access to social security benefits in the absence of bilateral agreements III. No access to portable social security benefits IV. Undocumented migrants who participate in the informal sector of the host country

Portability regimes globally: official and undocumented foreign nationals residing in region in 2000 (%) Source: Harrison 2004, ILO 2005a, Lowell 2002, Passel 2005, and authors’ calculations.

Portability regimes globally: official and undocumented nationals from region residing abroad in 2000 (%) Source: Harrison 2004, ILO 2005a, Lowell 2002, Passel 2005, and authors’ calculations.

Global stocks of official migrants (thousands) and bilateral social security agreements (i) Numbers refer to bilateral social security agreements per region, including all additional protocols and modifications to previous agreements. Since every agreement has two signatory states, worldwide every bilateral agreement is counted twice (although the two signatory states might very well be located in two different regions). The total number of agreements worldwide is therefore half of 3,656, that is 1,828. Note: n.a. for no information is available. Source: Harrison 2004 and authors’ calculations.

2. What do we know and where are the gaps? …on pensions Limited exportability  Some countries don’t allow for exportability or apply reductions Best practice: unilaterally change national social security law  Proof of being life for old-age and survivor pension Best practice: allow for proof at consulates or social security administration in home country

2. What do we know and where are the gaps? …on pensions Absence of totalization  Migrants might not meet qualification requirements  Reduced replacement rates  Best practice: Opting out for temporary migrants  Drawback: no contribution from employer, purchasing power, healthcare Lump sum payments  Drawback: loss of employer’s contribution, lack of annuity market in home country Bilateral social security agreements  Full totalization

2. What do we know and where are the gaps? …on healthcare Insufficient access to public healthcare  No access if no employment or pension  Best practice Unilaterally: reimbursements Private health insurance Voluntary contributions to public health system Bilateral agreements  Ensure continued coverage

2. What do we know and where are the gaps? …on healthcare Actuarial considerations  No cost sharing between countries  Financial drain for developing countries  Best practice: Not even within EU fully addressed Under certain circumstances annual transfers between health systems

2. What do we know and where are the gaps? Conclusions Majority of migrants face obstacles with regard to portability of benefits Bilateral social security agreements are current best practice Beyond current best practice, more actuarial structures might improve portability (funded and unfunded)

3. What can the Bank do? Concerns of client countries with large diasporas  Social protection for their citizens  Fiscal implications for their social security systems  Assist in negotiating totalization agreements Inform about impact on host countries (G-20) Labor market integration in South-South migration context (Example: SADC)  Harmonize access to social systems  Ensure portability of benefits Pre-deployment orientation for migrants and prevention (Example: Bangladesh)  Inform migrants about costs, benefits, and risks of migration, and migrants’ rights