Working Paper: NBER ID: w20388
Authors: Suresh Naidu; Yaw Nyarko; Shingyi Wang
Abstract: In 2011, a reform in the United Arab Emirates allowed any employer to renew a migrant's visa upon contract expiration without written permission from the initial employer. We find that the reform increased incumbent migrants' earnings and firm retention of these workers. This occurs despite an increase in employer transitions, and is driven by a fall in country exits. While the outcomes of workers already in the United Arab Emirates improved, our analysis suggests that the reform decreased demand for new migrant workers and lowered their earnings. These results are consistent with a model in which the reform reduces the monopsony power of firms.
Keywords: Migrant Workers; Labor Market Reform; Monopsony Power; UAE Labor Market
JEL Codes: J42; J6; O15; O53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reduced monopsony power of firms (J42) | increase in retention rates among workers (J26) |
| decreased demand for new migrant workers (J69) | reduced initial salaries for new entrants (J39) |
| UAE visa reform (Z38) | increase in real earnings for incumbent migrants (J69) |
| UAE visa reform (Z38) | reduced monopsony power of firms (J42) |
| UAE visa reform (Z38) | more than doubling of the monthly rate of employer transitions (J63) |
| UAE visa reform (Z38) | decrease in likelihood of workers exiting the UAE (J63) |
| UAE visa reform (Z38) | decreased demand for new migrant workers (J69) |