The role of overseas workers to the socio-economic condition of local communities in Indonesia

Maliki Maliki, University of Indonesia
Nurhadi Wiyono, University of Indonesia

The objective of the paper is to investigate how the migrant workers contribute to the local social-economic development, particularly to the poverty incident and crime rates. Migrant workers send their remittance to their family in their village that can be used not only for current consumption of the household but also for investment in the village. Thus, our hypothesis is that the migrant workers have positive effect on the economic growth of the village that eventually reduce number of the poor. Reduction of poverty rates at the local community is one of the channels to reduce the crime rates. According to authors’ knowledge, there is no study that has a comprehensive analysis on the economic impact of immigrant workers in Indonesia that involves national representative survey such as Susenas as well as using the Village Survey Data. The study is expected to contribute significantly to the literature of immigrant workers.