Labor migration, remittances, and the economy in the Gulf Cooperation Council region

Abstract The massive increase in labor migration to the Middle East during the past three decades has rivaled its historical trends bound to the West. This paper assesses how this growing trend of migration may have helped shape the economic structure and performance across the member countries of the Gulf Cooperation Council. Findings from a descriptive and time series regression analysis of the limited cross-country data show that the experience with labor migration and its linkage with other aspects of the economy are varied. The migration trend coinciding with increasing personal remittances attests to the competitive demand for foreign labor. While labor migration shows mixed association with the key aspects of the economy, the stock of migrant population is negatively associated with economic growth. Albeit seemingly contradictory, the insights from this six-country analysis covering the periods since 1990 are useful to understand the complex nature of relationship between labor migration and economic structure and performance in the region.