Impact of international out-migration on the Indonesian economy: estimating the value of the business of sending Indonesian overseas workers

Aris Ananta, Institute of Southeast Asian Studies

Many studies on the economic impact of international migration have been focused on the amount of remittances and how to use the remittances for the economy and welfare of the migrants and/or the family at home. This paper focuses on an important, but rarely discussed, aspect of the economic impact of international migration. This is the economic value of the lucrative businesses involving the pre-departure, placement, and return of the overseas workers. The workers and employers pay to the agents of this business. In this paper we will improve and update our earlier estimate for Indonesia, which produced the economic value at US$193.5 million in 2003. The new estimate will be much better than our earlier estimate, but it will be still conservative in the sense that it has not considered the multiplier effect of this business.