(a) theory/determinants/causes of labor migration;

Neoclassical theory is an approach to economics that relates supply and demand to an

individual's rationality and his ability to maximize utility or profit. It has two types: the
neoclassical microeconomic and macroeconomic theories. In the former, individuals rationally
decide to migrate because they expect a positive return: the costs of moving are less than the
expected benefits. *Individual factors that improve expected returns (education, language skills)
or reduce expected costs (access, technology) can increase migration. *Differentials in expected
returns determine the size of migrant flows.

The most important of current theories explaining why international migration begins are: the
neoclassical economics theory, the new economics of migration theory, segmented labor market theory,
historical-structural theory and the world system theory. Social Capital Theory is a theoretical model
explaining perpetuation of International Movement.

Neoclassical Economics: Macro-Theory is probably the best-known approach presenting sources of

international migration. It arose from the theoretical model explaining internal labor migration in the
face of economic development (Corry 1996, Harris and Todaro 1970). According to the theory
assumptions:
1) The main cause of labor migration are differences in wages between a sending-country and a
receiving country. In other words, wage differentials elimination will end international migration of
workers and migrants will not migrate if such differentials do not exist.
2) International labor migration is influenced by labor market mechanisms. It means that other kinds of
markets (insurance market, capital market) do not have an important effect on the international flows of
workers
3) The international labor migration can be controlled by the government through regulating labor
markets in both sending and receiving countries ( D. S Massey, 2005)

Neoclassical Economics: Micro-Theory arose in response to a macroeconomic model.Following

assumptions are characteristic of the above-mentioned theoretical model:
1) Rational individuals migrate because having calculated costs and benefits they come to the conclusion
that they receive the positive net return from movement. In other words migrants estimate the cost and
the benefit of moving and migrate to that country where expected net returns are greater than in the
country of origin (Borjas, 1990).
2) Migrants estimate net returns in each future period by taking the observed earnings and multiplying
them by probability of obtaining a job in the destination country to obtain ’expected destination
earnings’
3) The policies that affect expected earnings in sending and receiving countries can influence the size of
migration flows (D.S Massey 2005)

The New Economics of Migration is a theoretical model that has arisen in response to the neoclassical
theory (Stark and Boom, 1985). According to that model:
1) Families, households and other culturally defined units of production and consumption are those who
count in analysis for migration research (not individuals)
2) A wage differential is not a necessary condition for making a decision about migration to other
country
3) International migration does not necessarily stop when differences in wages disappear. Conviction of
migration rightness will exist if other markets in the country of origin such as: insurance market, capital
market, consumer credit market ect. are absent or imperfect
4) Governments are able to change the size of migration flows through regulating labor markets and, in
case they do not exist or are imperfect, all markets mention above.

Dual (or Segmented) Labor Market Theory shows the importance of institutional factors as well as race
and gender in occurring labor market segmentation (Castle and Miller 2009). According to Michael
Piore’s conclusions presented in the Birds of Passage: Migrant Labour and Industrial Societies the main
cause of international migration is a structural demand within advanced economies for both highly
skilled and lower skilled workers. Ipso facto migration is not caused by push factors in sending countries
but by pull factors in receiving countries (Piore, 1979). According to the theorists:
1) International labor migration is largely demanded-based and takes its beginning from recruitment by
employers in developed societies or by governments acting on their behalf
2) Because the demand for workers from other countries is structurally built into needs of the economy
and is expressed through recruitment practice rather than wage offers, differences in international
wages are neither a necessary nor a sufficient condition for arising and existing migration of labor
workers.
3) Governments are able to influence international migration but only through major changes in
economic organization (Castles and Miller, 2009)

Alternative models of explanation international migration phenomenon are called Historical-Structural

Theory and World System Theory respectively.
History-Structural theorists claim that international migration is caused by unequal distribution of
political and economic power in the world economy (Castles and Miller).
The Worlds System Theory argues that penetration of capitalist economic relations into non-capitalist or
pre-capitalist societies creates a mobile population that can easily make a decision to migrate (D.S.
Massey, 2009).

The last theory to present is called the Social Capital Theory. It is a theoretical model explaining
international migration through presenting a concept of migrant networks. According to this approach:
1) International migration expands until network connections are wide enough that all people who wish
to migrate to that country can do so without difficulties
2) The correlations between wage differentials or employment rates and migration flows hardly exist
3) Controlling migration in the light of that approach is very difficult as migrants network are created
outside the country and occurs irrespective of policies pursued (Casles and Miller, 2009).

(b) the extent, the characteristics and profile of overseas migration;

(c) positive and negative outcomes of overseas migration and remittances;

OVERSEAS MIGRATION

Positive

1. Take pressure out of the domestic market. By decreasing the labor pool in the local market, migration
may help alleviate unemployment and increase the salary of remaining workers. It relieves pressure in
an overcrowded market.
 2. Increased stocks of human quality. People who go abroad enrol to educational courses they like to
improve their marketability.

Negative

1. It generates labor shortages. An increase in labor migration decreases the skilled laborers in the host
country.
2. An absence of one family member affects the children. When one parent goes abroad, the children
have a tendency to rebel from the former leaving more dysfunctional families.
3. Elderly population remains so there is a higher death rate.

REMITTANCES

Positive

1. An increase in international remittances [10%] result to a decline in the share of people living in
poverty [average 3.5%].
2. Lower share of people in poverty means higher country’s GDP.
3. Improved infant mortality and child health by raising household incomes and health knowledge of
mothers.
4. International remittance reduces mortality rate by improving housing conditions
5. Increase in household receiving remittances reduces illiteracy among children but reduces school
attendance among children. When a child has a silver spoon in his mouth and becomes too spoiled,
he becomes lazy and doesn’t see the importance of schooling anymore. He feels confident of having
someone to depend on at any moment of his life.

Negative

1. High international remittances, increased inequality. The middle or upper class who work abroad or
has family abroad can afford.
2. High spending on “status-oriented” products. People who have family abroad sometimes tend to buy
expensive or luxurious products even not necessary. They acquire these materials things in order
satisfy their wants and to feed their egos.
3. Household receiving remittances are likely to have members with high wages, therefore, they hesitate
to find a local job with lower salary.

(d) assessment of efficacy or deficiency of programs that promote better protection of the rights of Filipino
overseas migrant workers and to reintegrate returning migrant workers to the economy.

RA no. 8042

 An act to institute the policies of overseas employment and establish a higher standard of protection
and promotion of the welfare of migrant workers, their families and overseas Filipinos in distress and
for other purposes.
o SECTION 4. Deployment of Migrant Workers.
 The State shall deploy overseas Filipino workers only in countries where the rights of
Filipino migrant workers are protected. The government recognizes any of the
following as a guarantee on the part of the receiving country for the protection and
the rights of overseas Filipino workers:
(a) It has existing labor and social laws protecting the rights of migrant workers;
(b) It is a signatory to multilateral conventions, declarations or resolutions relating to the protection of
migrant workers;
 (c) It has concluded a bilateral agreement or arrangement with the government protecting the rights of
overseas Filipino workers; and
(d) It is taking positive, concrete measures to protect the rights of migrant workers.

Efficacy

State Authorizing POEA to Formulate Labor Standards

 Extending protection and support of the State to migrant workers by authorizing POEA to establish
employment policies and formulate labor standards. The law requires that the POEA evaluate and
approve the employment contract to insure that employees are not placed to disadvantageous position
and that the same are within the minimum standards of the terms and conditions prescribed by the
POEA.
Deficiency

Contract Substitution
 A standard overseas employment contract must reflect the names and details of the contracting
parties which includes but not limited to foreign employer, monthly salary, position, regular working
hours, etc. However, despite how good it looks on paper, the reality is that they are not implemented.
Workers, having spent a lot of effort, time and money during the application process have no choice
but sign a contract with less benefits or salary when they reach the host country. The government has
no concrete means to fully monitor the implementation of contracts. Many OFWs claim that POLO
officers in the host country are not much of assistance in helping them file cases for contractual
violations in the host country.
 One case of contract substitution is that of nineteen (19) OFWs who were deployed
as construction workers in Tripoli, Libya on 2008. The victims signed a contract during their
application, however, hours before their departure they were asked to sign another contract
US$100 lower than their original contract. The poor OFW’s, left with no other choice, were
forced to sign the contract since they are already at the airport. When they asked for
assistance at POLO offices, they were advised to repatriate and file claims at the NLRC
against their employers. POLO officers, being on the front line in the host countries,
should be more effective in informing OFWs of the legal mechanisms through which
they can recover unpaid wages and other benefits and assist OFWs in availing of
these mechanisms in the host country.
 POLO officers should not confine OFWs to the option of returning to the Philippines and
filing money claims before the NLRC when legal mechanisms for claiming unpaid
wages and other benefits are available to them in the host country.

RA10022

 States that the principal employer and the recruitment/placement agency are liable jointly and severally
towards claims arising out of employee-employer relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for moral, actual, exemplary and other forms of
damages.