MIGRATION AS A PRO-POORLIVELIHOOD STRATEGY

Rural-urban migration and overseas migrationare very common in Indonesia. Not only is labourmigration pursued as a livelihood strategy forupward socioeconomic mobility, it is alsopromoted as a crucial development strategy inresponse to local unemployment and poverty.

Based on a survey conducted in 2013 inPonorogo, Indonesia, this booklet highlights keyfindings on migration patterns and impacts, andoutlines the policy implications.

Key Findings Patterns of migration

Policy Recommendations

Facilitate safe migration

Encourage higher education

Support income diversification

Migration is a pro-poor livelihood strategy

THE CASE OF PONOROGO

Summary2

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4

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Gender of international migrants

Internal migrants generally havehigher educational qualifications thaninternational migrants. Internationallabour migration persists as alivelihood opportunity for people withrelatively lower educationqualifications and restricted access toskilled jobs.

There are more women whomigrate internationally than men.Given how women are more likelyto send remittances than men,female migrants' remittances aresizable and vital to localcommunities.

Patterns of migrationKey Findings

Education of current migrants

Per

cent

age

of m

igra

nts

Migration is a livelihood strategyActivity before migration

Unpaid jobs

Casual jobs

Self-employed

Unemployed

In school

Paid jobs

Agriculture(54.5%)

Construction(10.7%)

Domestic work(7.6%)

Sales staff(9.6%)

Others(17.6%)

Before securing stableemployment outside ofPonorogo, manymigrants engaged inirregular or unpaid work.Those with paid jobswere largely employed inagriculture, which yieldsseasonal income.

WORK96%

Note: The degree of feminised international migration inPonorogo corresponds to the wider national figure inBNP2TKI's (2013) report.

2

Absolute poverty

Relative poverty

Migration is a pro-poor livelihood strategy

Remittances play an important role inreducing the proportion of poormigrant households. The poverty-reducing effect of remittances is mostpronounced for internationalmigrants, whose remittances arelarger than internal migrants'.

These findings support the largerargument that international migrationand remittances have the potential toreduce the severity of poverty.Note: The category of 'poor' is based on the per capita

incomes that fall below the poverty line.

While there are debates about theimpacts of remittances on incomeinequalities, this study found thatremittances equalise incomedistribution in Ponorogo. As thegraph below shows, remittanceshelp to reduce income inequality.

Top remittance expenditures

Remittances are channelled today-to-day expenses of migranthouseholds as well as productiveinvestments in education. Thispoints to the importance ofmigration as a livelihoodstrategy for the poor.

Cum

ulat

ive

perc

enta

ge o

f to

tal i

ncom

e

(n = 300) (n = 301) (n = 300) (n = 302)

Per

cent

age

of p

oor h

ouse

hold

s

Cumulative percentage of households

Per

cent

age

of m

igra

nt h

ouse

hold

s

Key Findings

Indonesian Poverty Line for

Rural Areas (Sep 2013): IDR 275,779

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Remittances as a componentof household income

Unsurprisingly, remittances form asignificant proportion of migranthousehold incomes. However,remittances are likely to form asmaller proportion of the householdincome when migrants return.

Age of migrants

Productive investmentsCreating investment opportunities formigrants as well as equipping themwith remittance management skillswould strengthen the viability ofmigration as a livelihood strategy andthe sustainability of its benefits in thelong run. As such, current migrantsshould be encouraged to reduce theirreliance on remittances while theyhave a sizeable remittance stream.

Case study

Rita worked as a domestic worker inTaiwan for 8 years. Apart from buildinga house and saving money for theirson’s education, Rita and her husbandwanted to buy land for economicsecurity. With the money remitted overthe years, they invested in 2 plots ofland and a tractor. These investmentshave reaped a steady stream of incomesince Rita’s return 4 years ago. Theycontinue to diversify their incomesthrough rearing poultry.

Percentage of migrants

Return migrants

International migrants

Internal migrants

All HH(Average Y = 1,939,517.00)

International migrant HH(Average Y = 2,449,942.00)

Internal migrant HH(Average Y = 1,624,786.00)

Return migrant HH(Average Y = 1,930,794.00)

Non-migrant HH(Average Y = 1,685,924.00)

Percentage of average income

Support income diversificationPolicy Recommendations

Further, as the graph aboveindicates, there are distinct agedifferences between internal,international, and return migrants.A reduced remittancecomponent would coincide with themigrant's later years.

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Provide access to credit

Facilitate safe migration

Even though the poor are 6% morelikely to migrate than the non-poor,only 21.4% of lowest income percentileof poor households have migrated.Access to credit could facilitate themigration of poorest households.

Case study

Migration - skilled and unskilled -is an important route out ofpoverty in rural areas. Restrictingmigration of either kind wouldlimit access to legal migration andchances of upward mobility.

In order to facilitate safe migrationthrough legal channels, access tocredit can be provided for migrantsthrough credit unions (koperasisimpan pinjam) and bank loans(small enterprise credit).

...especially for the poor

Due to the high costs of obtaining awork permit, Khalid worked as anillegal labourer in Malaysia for 3years. He recounted that he lived infear throughout this period. While hemanaged to remit money from abroad,he eventually had to stop work at shortnotice to hide from the police. Khalid'sdistressing migration journeyillustrates the importance of makinglegal migration affordable andaccessible.

Case studyRafik (in his early 20s) works as an oddjob labourer in Ponorogo, and earnsabout Rp.300,000 per month. Havingpreviously worked in an oil plantation inRiau for Rp.80,000 to Rp.100,000 per day,Rafik is very keen to return. However, hecannot finance his travel costs (estimatedRp.600,000) as he is one of two peopleworking in his household. A ‘migrationloan’ would grant him access to labourmigration in Riau where he can earnaround 7 times his current pay.

Per

cent

age

of p

oor m

igra

nts

Policy Recommendations

Note: Households may register in the highest income percentilebut contain a significant number of members such that per-capita incomes fall below the poverty line.

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Aspirations of migrants

Encourage higher educationIt is important to enable access to bothskilled and unskilled migration sothat the lower-educated and the poorcan reap the benefits of labourmigration, even if in subsequentgenerations. Often, migrants aspire fortheir children to work at better skilledjobs, which require a minimumstandard of education.

Occupational mobility

As the diagram below shows, migrantswith higher education levels (senior highand above) were more occupationallymobile during migration. A sizeableportion of migrants with highereducation were able to advance fromunskilled jobs in Ponorogo to(semi)skilled jobs during migration. Givenoccupational mobility that highereducation enables, making educationaffordable and accessible for all isparamount. For instance, Kartu IndonesiaPintar-KIP (Indonesia Smart Card) thatcurrently extends educational assistanceto the poor should become moreaccessible and expand to include those onthe brink of poverty.

Policy Recommendations

Case study

Salimah worked in the Middle East over 20years. Labour migration was an economicnecessity; she had to fund her daughter'seducation a er her husband died. Today,her daughter has graduated fromuniversity and is working as a teacher inPonorogo. For Salimah's daughter, labourmigration is a choice and not a necessity.She wants to remain in Ponorogo close toher family. Salimah's migration hasenabled her daugher to access highereducation and secure a better-skilled job.

Hig

her e

duca

tion

(143

)Lo

wer

edu

catio

n (6

7)

Semi-skilled jobs (28)

Unskilled jobs (171)

Business (6)

Note: The Indonesian Central Bureau of Statistics (BPS)categorise jobs as1. Unskilled (blue collar): agriculture, construction works,transport operator and domestic works2. Semi-skilled (grey collar): sales work, service work,production staff3. Skilled (white collar): professionals, managers, engineers,technicians

Unskilled jobsSkilled jobs (5)

Before migration During migration

6

Related Publications

NUS Bukit Timah Campus469A Tower Block, #10-01Bukit Timah Road, Singapore 259770 W: www.ari.nus.edu.sg

The Asia Research Institute (ARI), NationalUniversity of Singapore, is the SoutheastAsian core partner for the Migrating out ofPoverty Research Programme Consortium(RPC), which aims to provide policyapproaches that maximise the potentialbenefits of migration for poor people whilstminimising its risks and costs. Following onfrom the Migration DRC established in 2003,Migrating out of Poverty engages inresearch, capacity-building, training, and thepromotion of dialogue to provide the strongevidential and conceptual bases needed forsuch policy approaches. Migrating out ofPoverty RPC is funded by the UKGovernment’s Department for InternationalDevelopment (DFID), although the viewsexpressed in this policy briefing are theauthors' own.

Migrating out of Poverty RPC

Asia Research Institute

Arts B, University of SussexFalmer, Brighton BN1 9QNUnited KingdomE: migrationrpc@sussex.ac.ukW: http://migratingoutofpoverty.dfid.gov.uk

Contact us

This booklet was prepared by Charmian Goh, Silvia Mila Arlini and Khoo Choon Yen. Forfurther information, please contact Khoo Choon Yen at khoo.choonyen@nus.edu.sg.

Arlini, Silvia Mila. 2015. "Migration, Socio Economic Status and Livelihood Strategy for thePoor in Rural Indonesia, Ponorogo." Unpublished Manuscript. Asia Research Institute,Singapore.

Khoo, Choon Yen, Maria Platt, Brenda S.A. Yeoh, Silvia Mila Arlini, Grace Baey, TheodoraLam, Sukamdi, Julie Litchfield and Endang Sugiyarto. 2014. “Gendered Migration Patterns,Processes and Outcomes: Results from a Household Survey in Ponorogo, Indonesia.”Migrating out of Poverty Working Paper No. 22. University of Sussex: Falmer, Brighton.

Khoo, Choon Yen, Maria Platt, Brenda S.A. Yeoh and Theodora Lam. 2015. "StructuralConditions and Agency in Migrant Decision-Making: A Case of Domestic and ConstructionWorkers from Java, Indonesia." Migrating out of Poverty Working Paper No. 25.University of Sussex: Falmer, Brighton.

Khoo, Choon Yen, Maria Platt and Sukamdi. 2015. “Ringkasan Hasil Penelitian: Pola danDampak Migrasi Pekerja di Kecamatan Sampung, Ponorogo” (Fact-sheets from ResearchFindings: Patterns and Impacts of Labour Migration in Sampung Sub-district, Ponorogo).ISBN 978-979-3969-50-3. Gajah Mada University: Centre for Population and PolicyStudies.