Pay to Go: Countries Offer Cash to Immigrants Willing to Pack Their Bags
In the wake of the global recession, many countries have sought creative ways to lessen the economic distress that both native and immigrant populations have experienced.
Three countries that relied on low-skilled immigrant workers during good times — Japan, Spain, and the Czech Republic — have recently introduced voluntary return programs programs, popularly known as "pay-to-go" programs, in an effort to reduce the number of unemployed immigrants.
The programs established in 2008-2009 generally provide unemployed legal migrants with stipends that cover the cost of a one-way plane ticket "home." Some programs also offer migrants a lump-sum payment. However, those who participate must accept certain restrictions on their ability to reenter or live in the program-sponsoring country.
Pay-to-go programs present a set of complicated tradeoffs for both migrants and host countries.
In deciding whether or not to take part in such programs, migrants must consider the costs and benefits of staying in their host countries versus returning to their countries of origin, where jobs may be even scarcer. Program-sponsoring countries weigh how pay-to-go programs will affect the present-day job market against how they may leave their workforces unprepared for an economic revival.
So far, pay-to-go-programs do not appear to be all that popular among eligible immigrant workers. The Spanish government, for instance, dropped its estimate of possible participants by one-third in response to lower-than-expected participation rates.
After an overview of past programs, we discuss pay-to-go programs that assist legal, unemployed migrants in Japan, Spain, and the Czech Republic. We then look at what makes pay-to-go programs controversial and address the larger policy questions they raise.
It is worth noting that some countries have pay-to-go programs for unauthorized migrants. Such programs are not the focus of this article.
For example, the UK government put a spin on the pay-to-go concept in July when it agreed to pay would-be asylum seekers in France to not enter the United Kingdom. Together with the French government, the British offered unauthorized migrants encamped in France's port city of Calais a paid flight home, a stipend, and resettlement assistance upon their return. The camps at Calais have since been dismantled, but detained migrants are still eligible for "voluntary return" to their countries and a stipend.
Pay-to-Go Programs in History
Governments have used voluntary return programs since long before the 2008-2009 recession. They have served various policy goals beyond coping with economic issues, such as combating illegal immigration, addressing the detention of rejected asylum seekers, and promoting development through return migration.
Several European countries experimented with pay-to-go programs from the mid-1970s until the mid-1980s in response to the poor economic climate, including the 1973-1974 oil shock, among other circumstances. These countries — including France, Germany, Belgium, and the Netherlands — sought to provide incentives for both employed and unemployed guest workers to return to their countries of origin.
The incentives offered in these programs included participation bonuses, payment of travel expenses, reimbursement of social security contributions, and unemployment compensation. Although these programs varied in scale and scope, those developed by the French and German governments in the 1970s and 1980s, respectively, are somewhat comparable to the current programs in Japan, Spain, and the Czech Republic.
The French voluntary return program debuted in 1977 when the government offered 10,000 French francs (what was then about US$2,000) to any non-European Communities (EC) national willing to leave the country for a specified period of time and renounce his or her claim to French social security (the EC was the predecessor of the European Union). The program only targeted non-EC citizens, given the relative ease with which EC citizens could eventually return to France.
Large-scale, postwar admissions had created a sizeable population of migrants who were eligible to participate in the program at the time of its enactment.
However, the unilateral nature of this program did not guarantee that return migrants would find housing or work in their countries of origin and, therefore, discouraged many migrants from participating in the program. Yet some 94,000 migrants, including family members, accepted the offer between 1977 and 1981.
Despite the fact that Spanish and Portuguese migrants were not EC citizens at that time, the French program largely focused on Africans. According to economist Georges Tapinos, the postwar French migration policy aimed to admit Catholics as probationary migrants and non-Catholics as temporary workers. This policy could explain why the French program targeted (non-Catholic) Africans to a greater extent than (Catholic) Spanish or Portuguese workers.
Certain German state governments have attempted to implement pay-to-go programs since 1975, but it was not until 1983 that the federal government authorized two such programs: (1) the immediate reimbursement of social security contributions and (2) return aid.
Although both programs were available to non-EC migrants, the first was limited to those migrants who had become unemployed or forced to work reduced hours. Beneficiaries in both programs were prohibited from returning to Germany to work.
Between 1975 and 1984, the social security program approved 120,000 applicants, including 93,000 Turks, while the return-aid program approved 16,920 applicants, including 14,459 Turks. After the June 30, 1984, deadline for both programs, Germany discontinued using pay-to-go programs.
Despite these examples, it is still hard to determine how significantly pay-to-go programs stimulate returns and the extent to which they subsidize those individuals who were already planning to return to their countries of origin. The lack of evaluation of these past programs limits their usefulness for predicting how the current-day programs in Japan, Spain, and the Czech Republic will ultimately play out.
Japan is often viewed as a country that shuns immigration. Despite its position as the world's second largest economy, its level of permanent immigration is much lower than those of other leading world economies such as the United States, Germany, France, and the United Kingdom, which are known for being large immigrant-receiving countries.
However, despite the relatively small scale of immigration to Japan, the number of registered foreigners to the total Japanese population has increased every year since 1975, growing from 641,182 foreigners (0.7 percent of the total population) in 1955 to about 2.1 million (1.7 percent of the total) in 2007.
Over half of the foreign nationals in 2007 were registered as long-term, permanent, or special permanent residents (which are mostly Korean or Taiwanese individuals who have been in Japan prior to 1945, or those born as children of Permanent of Special Permanent Residents).
In 1990, the Japanese government established formal channels to allow Nikkeijin, or foreigners of Japanese descent, to immigrate to Japan. According to the Association of Nikkei and Japanese Abroad, 2.6 million individuals of Japanese descent currently live outside of Japan. Over half of them live in Brazil, another 38 percent in the United States, and 3 percent in Peru.
Among other changes, the 1990 law, which amended the 1951 Immigration Control and Refugee Recognition Act, permitted Nikkeijin to take up any occupation in Japan, including unskilled work. This effectively enabled Japan to circumvent its long-held policy of prohibiting the immigration of unskilled foreign workers to Japan.
The 1990 law contributed to the gradual settlement of low-skilled workers, mainly Nikkeijin from Brazil and Peru (and their families) in Japan.
From the late 1980s, employers, particularly large manufacturing firms, began to hire legal Nikkei workers over illegal workers from Asian countries, such as Indonesia, Pakistan, and Bangladesh, in fear of newly introduced employer sanctions. As voiced by the Japan Business Federation (Keidanren) and the Japan Development Bank, immigrant workers have been a component of Japan's labor market since at least the 1980s.
The 2008-2009 recession prompted massive unemployment among the approximately 350,000 Nikkeijin residing in Japan. Between November 2008 and January 2009, 9,296 foreigners registered as employment seekers, an 11-fold increase from the same period a year earlier.
According to several surveys conducted in Japan, approximately 40 percent of Latin American workers, most of them Nikkeijin, were unemployed by the end of 2008 and the beginning of 2009, compared to the 5 percent unemployment rate among Brazilians and Peruvians in Japan in 2005.
The recession has hit Nikkei workers hardest, as many relied on contract-based employment and jobs that are sensitive to economic fluctuations.
Many Nikkei Brazilians, for example, work under temporary contracts in the automobile, heavy, and electronic industries and are often employed indirectly through labor agencies in Japan and dispatched to employers. The Japanese manufacturing sector has suffered from a decline in exports due to the decrease in global demand for advanced manufactured goods such as cars, information technology, and machinery.
Importantly, the economic hardship has prompted massive return migration to Latin America, primarily due to large-scale layoffs of Nikkei workers and workers' inability to find new jobs before their unemployment insurance expires.
According to one study, an estimated 50,000 Brazilians, or about 17 percent of all Brazilians in Japan left the country between September 2008 and June 2009. A small portion of this group likely participated in Japan's pay-to-go program.
As part of a wider emergency strategy to combat rising unemployment and to assist immigrant and particularly Nikkei workers who continued to live in Japan, the Japanese government authorized on April 1, 2009, a voluntary return program for legally resident Nikkei workers.
To qualify for the program, workers must be unemployed and prove that they had entered and worked in Japan before April 1, 2009. The program offers $3,000 to the applicant and $2,000 to each dependent to cover airfare. The government allows immigrants to keep any unused amount. The program has helped Nikkei workers who wanted to leave Japan but could not due to financial constraints, as well as those who could afford their own return ticket.
Initially, the government had denied Nikkei workers reentry under the same residence permit or visa for an indefinite period of time, but it subsequently modified its policy due to public criticism. Under current provisions, Nikkei workers and their family members are prohibited from reentering Japan under the same visa or residence status for three years.
The Ministry of Health, Labor, and Welfare, which adjudicates applications, administers the program in partnership with the Ministry of Justice. Unlike Spain and the Czech Republic, Japan has not partnered with the International Organization for Migration (IOM).
Those approved for the program make their own arrangements with travel agencies for return flights. The travel agency issues return tickets to migrants once the government agency charged with disbursing program funds deposits the cost of transportation.
Upon confirmation of departure, the remaining amount is deposited in the individual's bank account in the home country.
As of October 1, 2009, the Japanese government had received over 13,000 applications and had approved more than 11,000 of them. Those denied were primarily ineligible to participate in the first place. The vast majority of applicants were from Brazil (see Table 1).
Spain was Europe's leading country of immigration between 2000 and 2007. During this period, the number of immigrants in Spain increased by 4.8 million, and their share of the total population jumped from 2 to 12 percent. As of January 2009, there were 5.6 million foreigners according to Spain's National Statistical Office. Many of these migrants came to Spain in response to the growing labor demand in construction, tourism, hospitality, and domestic services.
The Spanish government has attempted to manage migration flows by regularizing migrants who came illegally and has conducted six such programs since 1985, the most recent taking place in 2005. As observers have pointed out, some migrants were legalized more than once, as Spain's regularization programs granted temporary rather than permanent status.
Such regularization programs became more controversial over time. In an effort to move away from regularizations, in 2003 the Spanish government authorized IOM to administer Spain's first voluntary return program, known as PREVIE (Programa de retorno voluntario de imigrantes desde España).
The program aims to encourage the return of non-EU immigrants who have lived in Spain for more than six months but are living in precarious social situations. It provides these immigrants with a ticket home and a travel stipend. Between 2003 and 2007, IOM assisted the return of about 500 migrants a year, but the number more than tripled to 1,592 in 2008.
However, due to Spain's severe recession, the PREVIE program alone was not sufficient. In 2008, about 123,000 foreign workers lost their jobs in the construction sector, and 117,000 of them lost jobs in the service sector.
In November 2008, the Ministry of Labor authorized a new return assistance program known as APRE (Plan de Abono anticipado de Prestación a Extranjeros) specifically for legal migrants who are eligible for unemployment benefits, though it excludes those who have already used up their benefits.
The number of all foreign workers entitled to unemployment benefits more than doubled from 161,923 in January 2008 to 363,223 in August 2009 (see Table 2). Migrants from Morocco (23 percent), Ecuador (13 percent), Romania (12 percent), and Colombia (7 percent) are the program's four biggest potential beneficiaries.
January 2008 to August 2009
Migrants who qualify for the APRE program are entitled to free transportation to their home country, including 50 euros per person for transportation to the nearest Spanish airport. They receive their accumulated unemployment benefits in two installments: 40 percent prior to departure and 60 percent following return home. The average total payment runs about 9,000 euros per person.
Once migrants collect the first installment, they must surrender their Spanish documents — including work and residence permits, national identity number card, social security card, and health-care card — and leave Spain within 30 days. Under the APRE program, returnees are banned from returning to work in Spain for three years.
As of June 2009, the Spanish government had approved over 4,000 principal applicants for the APRE program. The overwhelming majority (around 92 percent) were from Latin America, with Ecuadorians making up the largest share (see Table 3).
However, although 47,723 Ecuadorian workers were eligible for unemployment benefits in August 2009, a 122 percent increase from January 2008, only 2,330 had applied for the APRE program as of June 17, 2009.
Moroccans appear to be even more cautious as they do not appear in official data about the program.
Their reluctance to participate has a variety of possible reasons. First, they are among the most-established migrant groups in Spain and may be less likely to return once they have deep family roots. Second, Morocco's own relatively weak housing and employment situation may deter its nationals from returning. And third, the Moroccan government may want its nationals to remain working abroad so that they can continue to send remittances.
Given overall participation levels, the government has lowered its expectations of the program from 130,000 participants to 87,000. However, as of November 2009, the program did not have any closing date.
Applicants' Countries of Origin, 2008 to 2009
With the fall of communism in 1989 and the Czech Republic's admission to the European Union in 2004, the Czech Republic transformed from a country of emigration to an immigrant-receiving country. From 1995 to 2007, the foreign born's share of the Czech Republic's population more than doubled from 1.5 percent (158,600) to 3.8 percent (392,200).
The foreign-born workforce in the Czech Republic grew at an even faster rate during this period, from 2.2 percent in 1995 (111,900 individuals) to 4.6 percent in 2007 (240,200 individuals) according to the Czech Ministry of Labor. Most foreign workers come from Ukraine and neighboring Slovakia (also an EU Member State), with smaller numbers from Poland (another EU Member State), Vietnam, and Mongolia.
Slovak migrants make up the largest share of foreigners working in the Czech Republic and are likely drawn to the country because of shared cultural and linguistic traits. These similarities developed before the Czech and Slovak Republics peacefully split from one another in 1993.
In the 1970s, the Czech Republic — then known as Czechoslovakia — recruited migrants from Vietnam and Mongolia to supplement the low-skilled labor force. The government targeted these countries because they too fell under the sphere of Soviet influence. Recruiting workers from these countries was also sometimes viewed as a form of development aid.
The Czech Republic's installation of a democratic government in 1989, combined with the country's preexisting Vietnamese community, prompted a second surge of Vietnamese immigrants in the 1990s.
When the Czech Republic's unemployment rate reached 6.8 percent in January 2009, the government introduced a voluntary return program to purportedly prevent unemployed foreign workers from remaining in the country illegally, becoming homeless, engaging in informal work, and even resorting to crime. The Czech Ministry of the Interior runs the program jointly with IOM.
To qualify for return assistance, the migrant must be a non-EU citizen who has lost his or her job or ability to renew a work and/or residence permit. The migrant must also be unable to cover the cost of travel back home from his or her own resources. It is unclear how this "inability to pay" is determined and if this requirement has been strictly enforced.
The program was initially devised to run from February 16, 2009, until it reached the 2,000-participant mark. However, perhaps in an effort to incentivize immediate participation in the program and cut government costs in the long term, the program was later divided into two parts and the participant goal was increased to 4,000.
Participants in both phases of the program are entitled to a paid return to their country of origin, some form of predeparture accommodation, and a "repatriation bonus" that migrants receive at the airport.
However, repatriation bonuses for phase one and phase two differ. Participants in phase one receive 500 euros for adults and 250 euros for children under 15; participants in phase two receive 300 euros for adults and 150 euros for children under 15. Phase-one participants are also offered "emergency accommodation" and basic food once they register for the program, whereas phase-two participants are only eligible for accommodation on the night before their departure.
All program participants must forfeit their Czech documents. This means that any future application for permanent residence in the Czech Republic cannot be based on residence prior to the program.
Individuals register for the program at Alien Police inspectorates and must be able to speak Czech or have the assistance of a translator by phone or in person. Detailed information on the program is only available in the Czech language.
From September 19, 2009, to December 15, 2009, the Czech government is also running a pay-to-go program for noncriminal, unauthorized migrants who are not currently in deportation proceedings.
This program provides participants with paid transportation home, in addition to knowledge of the exact amount of time during which they will be banned from the Czech Republic (a penalty for residing in the country illegally). Individuals who agree to pay for their own plane tickets home are granted reduced bans on reentry.
According to the Czech Ministry of the Interior's Department of Asylum and Migration Policy, participation in phase one of the program for legal migrants initially boomed and then decreased to a steady, lower volume of applications (see Table 4).
Phase two so far has proved less successful, with only 144 registrants as of October 2, 2009.
The program overall has slightly exceeded its initial goal of 2,000 participants with 2,015 participants as of October 2, 2009. But that number falls well short of the upgraded goal of 4,000 participants.
Although the majority of individuals eligible for the program are from Ukraine and Vietnam, those from Mongolia made up 64.8 percent of program registrants as of October 2, 2009.
The relatively low participation of Ukrainians, the largest immigrant group in the Czech Republic, could be due to the ability of this well-established community to provide social and economic support for those who need it.
The Vietnamese population may not be participating for a different set of reasons, including unpaid debts incurred to come to the Czech Republic, poor economic conditions in Vietnam, and the type of work they do — a large portion are self-employed while others take jobs that Czech citizens shun.
Applicants' Countries of Origin, 2009
Comparing Programs in Japan, Spain, and the Czech Republic
In looking at the three programs side by side, some have easier-to-meet criteria than others, some impose a stricter timeline, and some offer more generous benefits (see Table 5).
Together, these program designs not only reflect the intentions (or calculations) of program-sponsoring countries, but they also present a set of difficult tradeoffs for the migrants.
The current crop of pay-to-go programs has each received its fair share of criticism:
- Japan was criticized for initially placing a permanent reentry ban on pay-to-go participants.
- The Czech government has described its program as a means to control crime, causing many to point to the uncomplimentary suggestion that "unemployed foreigner" equals "criminal."
- Immigrant welfare groups in Spain viewed the return program with suspicion, arguing that Spain was treating migrants as a solution when the economy was booming, but as a problem when the economy went south.
In addition, critics have observed that because pay-to-go programs target specific immigrant populations, they serve to expel (rather than integrate) culturally distant populations or groups subject to social prejudice. Some simply characterize the programs as anti-immigrant in nature and highlight the fact that they make remaining and prospective immigrant groups feel at risk and unwelcome.
Meanwhile, home countries do not always welcome returnees, particularly during economic downturns. Home-country governments often worry that the return of migrants will diminish remittance flows, thereby hampering development.
Furthermore, home countries often lack adequate housing, job opportunities, workforce development systems, and other infrastructure to support returnees if they were to come home en masse.
The Broader Policy Context
Voluntary return programs can provide immediate relief to those who were planning to leave anyway or to unemployed individuals who see the program as a good incentive to return to their country of origin.
But while host countries can offer attractive packages, they cannot guarantee the success of migrants in their home countries. In addition, eligible migrant workers may be unwilling to participate because they have established strong local ties and feel at home in their host country.
Pay-to-go programs may present an opportunity for different parties — including migrants, employers, and governments — to engage in a dialogue about the role of immigrants in the labor market and to design bilateral immigration plans that can benefit both the origin and destination countries.
However, the Japanese, Spanish, and Czech governments all unilaterally adopted their respective pay-to-go programs to address their own economic and social concerns.
Despite the focus on pay-to-go programs, none of these countries has used its program as its main or only option for managing migration during this recession.
For example, in Japan, the voluntary return program is merely one component of a slew of measures aimed at helping immigrants, such as offering free Japanese-language courses, vocational training, and job counseling for foreigners who wish to continue working in Japan.
The backdrop for these immigrant-assistance programs is an increasing understanding among certain legislators, employers, and business associations that immigrants will continue to be a key component of the economic landscape and will help to address Japan's demographic woes.
Both the Spanish and Czech governments have been curbing the renewal of work permits in conjunction with their pay-to-go programs.
The Czech Republic stopped issuing work permits indefinitely to migrants from five non-EU countries (including Vietnam and Mongolia). Between January and August 2009, these policies altered the number and composition of work-permit holders. The number of Vietnamese workers has already dropped from 14,081 in January 2009 to 4,553 in August 2009.
Spain is also in the process of amending its Foreigners' Law (ley de extranjerías). On October 29, 2009, the lower house of the Spanish Parliament approved a reform that would tighten the requirements for family reunification. Under this bill, only immigrants who have lived legally in Spain with a residence permit for at least five years would be eligible to reunite with parents who are 65 and older and with their children under 18, except for adult children with disabilities.
The bill will be sent to the Senate, the upper house of the Spanish parliament. If it passes as expected, the new rules would take effect in 2010. This more restrictive policy could deter migrants from participating in Spain's pay-to-go programs because leaving could very well mean they may never be able to legally return.
Other important questions on voluntary return programs remain:
- How significantly do these programs influence the types and levels of immigration flows during an economic recession?
- Is the readmission of migrants permitted and, if so, will countries give former migrants preference in future admissions?
- Once participants return to their countries of origin, how well do they integrate into the economy and society, and what impact do they have on those economies?
- Are program-sponsoring countries simultaneously experiencing sizeable outflows of immigrants through channels other than the pay-to-go program? How do those immigrants differ from those who participate in the program?
The experiences of Japan, Spain, and the Czech Republic could help answer some of these questions and provide lessons for countries considering pay-to-go programs in the future.
As the economy begins to improve, these countries will likely need to decide where they would like to recruit foreign labor from and on what terms — ideally so that they do not need to use a pay-to-go program again.
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