Estimating Earnings Losses of Migrant Workers Due to COVID-19

While the wide-ranging impact of COVID-19 on incomes and livelihoods of people around the world will take some time to become known and understood, it is already clear that those who are in manual, mostly low-wage, occupations are among the worst-hit workers. This paper uses data from a sample survey of migrant workers to come up with useful parameters for estimating the potential losses from possible retrenchment of migrant workers due to the pandemic. The paper employs a simple estimation model using parameters derived from data collected from a KNOMAD-ILO survey of low-skilled migrant workers in the India-Saudi Arabia migration corridor, conducted during 2016-2017. An important finding is that the aggregate losses that low-skilled Indian workers in Saudi Arabia are likely to incur due to COVID-19-related retrenchment may be as high as 21% of their expected earnings. Adding recruitment costs can push up their losses to 36% of expected or potential earnings, while the aggregate remittances to their families could drop by USD 2 billion.