International migration – economic implications
AE
POVERTY AND MIGRATORY DECISION
Silvia-Florina Cojanu1*, Cristina Stroe2
1)2)
The National Scientific Research Institute for Labour and Social Protection,
Bucharest, Romania
Abstract
In the last two decades, migration represented a phenomenon of high magnitude in
Romania. While data on migration for Romania are limited, the media channels have given
more visibility to a certain typology of the Romanian migrant: with low level of formal
education and lack of qualifications, accepting low skilled jobs, often working without legal
forms in domains such as agriculture, constructions or care, leaving the native country to
escape poverty. Yet, very recent survey data on recipients of guaranteed minimum income
(the poorest of the poor) show that, while they perceive migration as the only functional
individual strategy for escaping poverty, they do not, in fact, engage in migration. There
are a multitude of theories explaining this apparent contradiction between perception and
action and we explore here both the neoclassical approach that refers to the migration
decision in terms of costs and benefits analysis, but also the behavioural economics
approach that provides insights on decision making under scarcity conditions, adding
comprehensive information on exercising migratory agency under poverty imposed
limitations.
Key words:
Migration, poverty, behavioural economics, risk aversion, deficit of aspiration
JEL Classification: A12
Introduction
The paper explores the poverty imposed limitations in exercising migratory agency.
The pretext of this paper was offered by results obtained in a survey targeted towards the
poorest of the poor in Romania (data collection – October 2016). Their answers showed
that, while they consider migration to be the only effective approach for a better life for
them and their families, they didn’t embark on that road and they do not see it as applicable
to them in the future.
This apparent lack of connection between aspirations and future plans determined us to
explore further in order to understand the impact of poverty on migration decisions. The
scientific literature and especially the new behavioural economics approaches offer a
multitude of explanations, as it was empirically determined that the context of poverty is
associated to cognitive depletion (Mullainatham and Shafir, 2013), risk aversion and time
discounting (Haushofer and Fehr, 2014), some authors even pointing out to a certain deficit
*
Corresponding author, Silvia-Florina Cojanu – [email protected]
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Poverty and migratory agency
of aspirations (Appadurai, 2004; Ray, 2006; Duflo, 2012). All these elements may explain,
to a certain extent, why poverty is rather associated to reduced mobility.
1. Migration in Romania – some key figures
As the National Institute for Statistics shows, between 1992 and 2016, the resident
population of Romania decreased by more than 13%, and a large part of this decrease (two
thirds, in fact) is due to international emigration. Only in 2007, the year Romania adhered
to the European Union, 544000 people left Romania (National Institute for Statistics Report
on Migration, 2016). A recent United Nations Report (2016) estimated that 3.4 million
Romanian citizens are currently living abroad, as Romania occupies the forth position in
the European Union as an emigration source, after the United Kingdom, Poland and
Germany.
The scientific literature regarding Romanian migration patterns and specificities is rather
underdeveloped. An analysis of some of the most important studies can be found in a paper
by Goschin and Roman (2012).
Below we present some key facts they identified (pp. 92 – 93):
 Romanians emigrate mainly due to socio-economic reasons: perceived lack of
opportunities, political instability and persistent corruption. There is the perception
of improved living conditions, better education opportunities, better career
opportunities, higher incomes and a more stable economic environment beyond
Romanian borders in the better developed receiving countries.
 Most of the Romanians living abroad (86.2%) have secondary education, while
only 12.4% have higher education.
 44% of higher educated Romanian migrants choose countries outside the
European Union, such as Canada or the United States.
 Approximately one in five persons migrated despite being employed in Romania.
 Remittances have reached a $9.4 bn peak in 2008, but halved in the following two
years, due to the economic crisis effects. Despite the decline induced by the
economic crisis, remittances have remained relatively high, representing an
important support for the families left behind in the country. The two authors
emphasize the important role of remittances as a source of external financing,
second only to foreign direct investments, for Romania, citing Daianu et. al.
(2001) that assessed unsustainable deficits for Romania in the absence of
remittances.
 Strongest emigration rates do not occur in poor regions (Oltenia, Moldova,
Muntenia), but in the wealthy ones (Bucharest, Banat, Transylvania).
Grosu and Dinu (2016) showed that Spain and Italy are the most important receivers of
temporary emigration from Romania, while this fact is not clearly reflected in the
information available at the Romanian National Institute of Statistics that registers data
associated to residence change migration (from this perspective, United Kingdom occupies
a very important position, especially in the last years, according to the National Institute of
Statistics, 2016).
While data on Romanian emigration and scientific literature on Romanian migration trends
are relatively scarce, stereotypes on the Romanian migrant were emphasized through mass
communication. Romania was often presented as a source of emigration, especially of low
and very low skilled labour force. The emigration phenomenon associated to the Roma
population was also strongly emphasized. The general impression was that a large part of
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Romanian migrants were uneducated, low skilled, looking for low skilled and low paid jobs
in sectors such as agriculture, construction or care, sometimes working without legal forms
in the destination countries (see Călbează, 2014).
In this logic, the Romanian social assistance system was perceived to benefit of a certain
relief, as many of the low skilled that left Romania were fighting the poverty trap and
depended on social assistance. They were expected to be a supplementary burden on the
social assistance systems of their host countries. In this sense, an extended analysis of the
public discourse regarding the Romanian emigrants in the media from UK and France
(using the press reviews from the Romanian Embassies in the two countries and the online
archives of the journals with the highest circulation) acknowledges the magnitude of
negative perceptions (see Călbează, 2014).
In the same time, national sources emphasize the negative effects of the emigration of
working age population for the Romanian labour market (National Institute for Statistics
Report on Migration, 2016), all the while acknowledging that the effects of the
international massive migration trends on future economic development are difficult to
forecast (Pescu and Stefan, 2016, pp. 603).
2. Survey results – perceptions and behaviour of the poorest of the poor regarding
migration
In this context, the results obtained through a 2016 survey developed by the National
Scientific Research Institute for Labour and Social Protection (carried out by CURS SA), in
a project with focus on the beneficiaries of guaranteed minimum income, generated further
interest for a more in-depth analysis regarding poverty effects on migration decision and
mobility.
The guaranteed minimum income is a social assistance benefit granted to the poorest of the
poor, for poverty alleviation. It is a means tested benefit, granted to those whose income per
household is situated below a threshold. In 2016, the guaranteed minimum income
threshold was established at 142 lei for households consisting of one person, 255 lei for
households consisting of two persons, 357 lei for households consisting of three persons,
442 lei for four persons households and 527 lei for five persons households. For households
with more than five members, the social aid quantum was increased with 0,073*ISR (Social
Reference Indicator = 500 lei).
There were 241.992 guaranteed minimum income beneficiaries in Romania, according to
the data of the National Statistics Institute for July 2016.
The survey’s purpose was to assess the views of this category on issues such as poverty
causes, as well as best ways to tackle it, both in terms of individual strategies to escape
poverty and in terms of measures to be taken and implemented at local level or national
level by policymakers and local administration.
For this survey, a representative sample was created for the beneficiaries of the guaranteed
minimum income of working age, at a 95% confidence level, with a maximum margin of
error of 4%. We used multistage stratified random sampling, taking into consideration the
distribution of beneficiaries on counties and areas of residence (urban/rural). After that, the
localities and households were selected randomly. The sample had a volume of 600
respondents. The data collection took place during the 3rd-17th of October 2016, with the aid
of 40 interview operators.
As migration is largely presented as the strategy to escape poverty in Romania, the survey
also approached this issue.
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Poverty and migratory agency
While we expected to find a higher number of people in our representative sample (of the
most impoverished Romanians) to have accessed in the past this strategy of work migration
for poverty alleviation or to be part of households that receive remmitances, this was,
surprisingly, not the case.
In fact, only 9,2% of the 600 respondents declared to have ever lived abroad for work or
other reasons. This means 55 persons out of the sample of 600 people.
Out of these 55 persons, about half of them had lived abroad for less than a year (24
people). Only 7 people had lived abroad for 5 years or more.
These results seem plausible, as they support the idea that the returned migrants have
gained the means and the skills to escape the poverty trap, thus explaining why they could
not be found in the situation of needing the social aid for the guaranteed minimum income.
It was also unexpected that only 2,2% of respondents received money from abroad in the
month previous to data collection (13 people out of the 600 people of the sample).
This might be a case of underreporting of received remittances, due to the fact that adding
money to the household income might interfere to the entitlement of receiving the social aid
benefits. Yet, we believe that is not the case for this sample, as the respondents were
informed of the complete confidentiality of the information and data collected in the survey
and there was openness to offer other potentially problematic information.
But, while objectively, migration, as means of poverty reduction, was hardly accessed to
improve the current situation of the very impoverished families surveyed, subjectively it is
perceived as the key individual strategy for escaping poverty.
In fact, 82,5% of respondents agreed that, for most of the poor, work migration is the only
way to escape poverty. Thus, almost 500 of the 600 respondents considered migration to be
the only way to escape poverty, with 254 persons (thus 42,3%) strongly agreeing to this
statement (Fig. no. 1).
Figure no. 1
Also, the role of remittances as a poverty reduction mechanism is widely acknowledged by
the respondents. In fact, 79,3% of the respondents agree that money earned by those that
work abroad help the families that have remained in the country to escape poverty, with
39% strongly agreeing to this statement (Fig. no. 2).
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Figure no. 2
Thus, although not benefitting from remittances themselves, they perceive them as a strong
instrument for poverty reduction.
It is clear that they consider migration to have a positive effect from the perspective of
poverty alleviation, as they see it as a means to escape poverty for those that leave, also
with positive effects for the families left behind, alleviating, through remittances, to a
certain extent, the poverty burden.
Yet, when asked about their personal strategies to escape poverty, “what they think they
should do to escape poverty”, only 3,3% of respondents think that the solution of work
migration could be applicable for their individual cases.
We wanted to explore further this issue.
Other questions of the survey offered relevant information.
Although 58,8% of respondents agreed that “people should remain in their native country
and contribute to its development”, over 40% of the sample did not agree to this statement,
thus not reinforcing a kind of moral obligation as a reason for immobility (Fig. no. 3).
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Poverty and migratory agency
Figure no. 3
Yet, 78,8% of respondents acknowledge the negative effects migration might have on
family life, being especially hard for the children and older parents of those who decide to
work abroad (Fig. no. 4).
Figure no. 4
The socio-economic data are important in understanding the results. All respondents of the
sample are of working age, with 48,3% of respondents in the 31-50 age group, 12% of
respondents in the 18-30 age group, while 39,7% of respondents are in the 51-65 age group.
The sample is composed of 43,8% male respondents and 56,2% female respondents.
The structure of the sample by educational attainment of respondents is presented in the
Graph below (Fig. no. 5). Most of respondents have gymnasia studies (8 school years),
while a relatively large share of respondents only have 4 years of schooling. There is a high
share of respondents (13,8%), that have no formal education at all. In fact, 40% of
respondents have been to school for less than 4 years.
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Figure no. 5
What are the reasons for the apparent contradiction between perceptions and actions, for
this group, the poorest of the poor, when they seem to have reasons to migrate as their
current state in their country of origin is of deep poverty and they do see migration as the
approach for an improved quality of life and yet they didn’t embark on that road and they
do not see it as applicable to them in the future?
These results made us search for an appropriate explanation, as they were somewhat
contradictory and counterintuitive. Thus, an in-depth research of the scientific literature
was required in order to find an appropriate explanation for this matter of facts.
3. Poverty and migratory agency – why do the poor stay?
The rational-choice theory, built on the idea that decision making is based on an exhaustive
and informed analysis of the costs and benefits of choice variants, can be applied to the
migration phenomena: “if benefits outweigh the costs of migration, we can expect
migration to occur; likewise, if costs outweigh benefits, we can expect people to stay”
(Schewel, 2015, pp. 8). But, beyond theory, migration is a nuanced phenomenon. In fact,
many decide not to migrate, although it would make sense economically to do so, it would
be economically rational to leave, yet they chose to stay (see Hammar & Tamas, 1997,
cited by Schewel, 2015).
Carling (2002) introduced the term of “involuntary immobility”, referring to people that
wish to migrate, but they cannot act towards this wish, due to a multitude of reasons. His
contribution, emphasizing the distinction between the aspiration of a better life through
migration and the capability to access it, was used in the scientific literature for a more
complex and thus more realistic migration categorisation (Haas, 2014).
Haas (2014) created an integrative frame for the different informational elements offered by
theories conceptualising different forms of migration as a function of migration capabilities
and migration aspirations.
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He considers that migration aspirations develop depending on people’s general life
aspirations and perceived spatial opportunity structures. Migration aspirations are built
upon subjective representations of both life at present location and life at destination. He
also makes an important distinction between instrumental aspirations and intrinsic
aspirations. In his view:
 Instrumental aspirations are related to migration as a ‘utilitarian’ means to achieve
an end, such as higher incomes, higher social status or better education.
 Intrinsic aspirations are related to the value attached to the migration experience
in itself, migration as freedom.
The author uses Berlin’s (1969) distinction between negative and positive liberties. In this
approach, negative liberty refers to the absence of obstacles, barriers or constraints. Positive
liberty refers to “the ability to take control of one’s life and to realise one’s fundamental
purposes” and „derives from the wish on the part of the individual to be his own master”
(Berlin 1969, pp. 131, cited by Haas, 2014, pp. 27). Haas (2014) conceptualizes migration
capabilities as contingent on both positive and negative liberties.
In his view, capabilities influence aspirations, as when there are slight positive
developments in life standards and lifestyles, people become more aware of the fact that a
better life exists and it is within reach, thus increasing aspirations.
The table below (Table no. 1) illustrates a taxonomy on migration, considering both
positive and negative liberties, thus focusing on migration capabilities.
Low
Negative
liberty
(external
constraints)
High
Table no. 1
Positive liberty (capabilities)
Low
‘Precarious
migration’
internal
and
international,
by
relatively
poor or impoverished
people vulnerable to
exploitation
‘Improvement
migration’
internal
and
international,
often
through
networks, recruitment
or pooling of family
resources
High
‘Distress migration’
eg refugees, fleeing
from adverse
and/or
potentially
life-threatening
conditions possessing
the resources to
move abroad legally
‘Free migration’
relatively
unconstrained
movement in
and between wealthy
countries or by
wealthy
people,
skilled
workers,
‘lifestyle’ migrants
Source: Haas, 2014, pp. 31
The poor have a low level of positive liberty – in terms of resources, facilitating factors.
Both financial resources, social resources (networks), as well as personal resources
(knowledge, skills, etc.) are crucial in the migration process, as it is demonstrated in the
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scientific literature. The relative immobility of the poor is explained through this lack of
positive liberties, regardless of the effect of constraints.
Consequently, the poor don’t migrate, even though they might gain a lot in terms of quality
of life through this process. The author shows that “the poorest often only migrate if forced
by conflict or disasters, and then mainly move over short distances, while the extremely
poor are often deprived of the possibility to move at all” (Haas, 2014, pp. 27).
For many families, migration can be the key to a socio-economically improvement of their
life and to be able to contribute to the improvement of the living standard of the family left
behind. In this case, as Haas (2014) shows, family members merge resources to invest in
the migration of one family member that will later on contribute to the wellbeing of the
family through remittances or he will be a facilitator for the migration of other family
members.
The taxonomy of migration as a function of aspirations and capabilities offers other inputs
for better understanding the decisions of the poor in terms of mobility or immobility (Table
no. 2).
High
Migration
aspirations
(intrinsic and/or
instrumental)
Low
Table no. 2
Migration capabilities
Low
Involuntary
immobility
(Carling 2002)
(feeling
‘trapped’)
Acquiescent
immobility
(Schewel 2015)
High
Voluntary mobility
(most
forms
of
migration)
Voluntary
immobility
and
Involuntary
mobility
(eg refugees, ‘soft
deportation’)
Source: Haas, 2014, pp. 32
It is obvious from the matrix above that low migration capabilities generate immobility,
regardless of people’s aspirations.
The concept of “acquiescent immobility” was introduced by Schewel (2015) in order to
highlight the fact that some people may not want to migrate regardless of their migration
capabilities, thus they may face difficulties to engage in migration due to socio-economic
constraints, but, in the same time they do not have the desire to migrate. The term, the
author argues, implies the acceptance of constraints (the Latin origins of the word meaning
“to remain at rest”).
Schewel (2015) focused her research on identifying the non-economic motivations that
influence migration decision-making processes, especially in the case of poorer populations
that would gain economically from migrating. She discovered that the preference to stay is
generally positively related to being married and having children and negatively related to
having only primary level education. Other factors, such as gender, age, household
financial situation and rural/urban settings were not identified as significant predictors of
the preference to stay in the case of young adults. The identified “retaining factors” were
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family ties, the patriotic desire to contribute to the development of their own country, as
well as received information on difficulties of migration and migrant lives.
In fact, both taxonomies emphasize the role of scarce resources in influencing the migration
behaviours of the poor. Sometimes the poor simply cannot bear the costs of migration and
they are economically forced to immobility or they enter the route of a dangerous,
“precarious” migration, exposing themselves to risks of exploitation.
The idea of “acceptance of constraints” emphasized through the concept of “acquiescent
immobility” can be theoretically associated to works of other authors that point out the
effects of poverty on aspirations.
Empirical studies suggest that there is a certain association between poverty and a lower
level of aspirations. The poor may feel incompetent and unappreciated, without hope that
their lives might improve (World Bank Report, 2015). This mental framing hinders their
ability to take advantage of possible opportunities, thus missing chances to escape poverty
also due to aspirations’ deficits (Appadurai, 2004; Ray, 2006; Duflo, 2012).
Appadurai (2004) explained that poverty changes our perception frame, the filters through
which we see the world, diminishing our capacity to aspire.
Ray (2006) introduced the concept of “aspiration window”, populated with tangible, similar
individuals that can be subject of identification. “As an economic agent who desperately
seeks to escape poverty, I will emulate, imitate, and learn from the economic strategies of
those in my neighbourhood income or wealth group” (Ray, 2006. pp. 3). A person extracts
its own aspirations by witnessing the lives, desires, ideals and successes of those from its
own aspiration window. Ray (2006) considers that future oriented behaviour, depends not
so much on aspirations or the standard of living experienced by the individual, but rather on
the existence of an aspiration gap of certain characteristics. “The aspirations gap is simply
the difference between the standard of living that’s aspired to and the standard of living that
one already has.” (Ray, 2006, pp. 3) His model demonstrated clearly that individual
investment efforts are minimal for both high and low aspiration gaps. “Individuals whose
aspirations are closely aligned to their current standards of living have little incentive to
raise those standards. However, individuals whose aspirations are very far away from their
current standards of living also have little incentive to raise standards, because the gap will
remain very large before and after. A lot of investment will only cover a small part of the
way: the overall journey is too long, and therefore not worth undertaking in the first place.”
(Ray, 2006, pp. 4)
From this perspective, for the very poor, the gains from migration could be marginal, as
while changing the territory, they might find themselves continuously trapped in precarious
living, mainly due to their lack of education and skills.
Yet, there are recent experimental proofs that suggest the fact that changing the frame/filter
through which the poor perceive themselves and their situation, can be associated to
favourable and noticeable behavioural changes and positive results in terms of poverty
reduction (World Bank Report, 2015).
Lately, the economic decision making processes in poverty situations became central in
research interests. Research in the field of behavioural economics shows that the poor are
prone to behaviours that maintain and feed their poverty – non take-up of benefits, risky
financial behaviours, insufficient investment in education and training for them or their
children, etc. (see Haushofer and Fehr, 2014). “Poverty may, in particular, lower the
willingness to take risks and to forgo current income in favor of higher future incomes. This
may manifest itself in a low willingness to adopt new technologies and in low investments
in long-term outcomes such as education and health, all of which may decrease future
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incomes. Thus, poverty may favour behaviours that make it more difficult to escape
poverty.” (Haushofer and Fehr, 2014, pp. 862) The authors brought together a multitude of
research studies showing that “poverty has a causal effect on risk-taking and timediscounting” and they explain that negative income shocks that are a common feature of
life in poverty and the expectancy of liquidity constraints are the reasons for these
preferences, together with limited access to crediting.
Behavioural economics research on poverty experimentally demonstrated that the poor are
confronted to cognitive depletion, due to their strong focus of attention on the immediate
challenges that life in poverty imposes on them, thus leaving them less mental space or
bandwidth to deal with issues that are of great importance and represent important
investments for the improvement of their situation, but they require planning, in-depth
analysis of multiple variants for decision making, or maybe solving complicated, not so
straight forward problems (see Mullainathan and Shafir, 2013).
Migration is a demanding process in terms of planning, researching and making well
informed decisions. People confronted to poverty imposed limitations focus most of their
resources – economic, but also psychological – to solving day to day poverty generated
challenges. These exhausting limitations consume the resources needed for planning and
preparing for migration complexities.
This may also function as a possible explanation for the reduced mobility of the poor, as
migration might be perceived as a rather risky approach, certainly including more
uncertainty than remaining in the well known situation, even if the present situation is far
from satisfactory.
Conclusion
Migration represents an important strategy for poverty alleviation in the mental models of
the poor in Romania. Thus, migration aspirations are strong, although the poor are well
aware of the sacrifices/costs it implies, especially through the break of family ties and due
to the vulnerability of those left behind, most often the children and the elderly. The “duty
to contribute towards the development of their country” is not a strong retaining element.
Yet, while migration is seen as the “only way” to escape poverty, only 3,3% of respondents
actually think about the possibility of leaving the country in the future.
It seems that poverty is a limiting factor in exercising migratory agency, in Romania, but
also elsewhere. Maybe the poorest of the poor are completely blocked to exercise their
migratory agency due to their profound lack of economic resources. Of course, it would be
very easy to say that they decide to remain due to the fact that, although they evaluate the
benefits to be significantly higher than costs, they simply cannot afford to bear the costs. So
they understand their potential gain, but since they simply can’t sustain the costs, they
cannot act towards their potential gain. Here we talk about perceived gain, as many of the
respondents consider that migration is the only way to escape poverty. The perception is
not necessarily a fair reflection of reality, as, especially due to their lack of skills,
prospective gains, even abroad, could be assignable towards the lower side of the spectrum.
When migration is seen as an investment for the survival and improving of the living
standard of the family, family members may put together resources in order to facilitate
migration for their designated member, thus overcoming seemingly unbearable costs.
Decision making for migration is a complex process and even more difficult for the poor,
with their very thin margin for error. Thus, there are reasons to believe that, besides
“involuntary immobility” determined by a deficit of resources, there could be some other
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explanation for the reduced mobility of this group. The scientific literature offers
information on experimental studies that bring much needed insight on what decision
making could be like in a situation of scarcity. Cognitive depletion, risk aversion and time
discounting are a few of the answers offered empirically, by the newly developed domain
of behavioural economics. The poverty induced tax on the mental bandwidth of the
individuals might be associated to a lack of cognitive resources needed for planning the
complex migration process, with its high risks and high uncertainty level.
The fact that poverty is associated to a stronger manifestation of risk aversion could also
explain why people overlook the potential gains that migration might bring, though they are
perceived to be high. Time discounting, identified as a behavioural pattern often associated
to poverty, means that the poor are mainly focused on present satisfaction of needs and
wants, rather than investing in future gains. This reluctance to invest, which was identified
through research, could be determined by the perceived large gap between the present state
and the desired state, too large to be potentially covered with the in-reach investments the
poor are capable to make to improve their situation.
The fact that migration is seen as the only way out of the poverty situation shows the lack
of trust in the programs and policies for poverty alleviation that are presently implemented
in Romania.
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