Emigration down, Kerala needs to move on from remittance economy

An Expert Explains: The economic boom within the Gulf countries gave migration a considerable boost, reaching its peak in terms of both numbers and remittances.

Written by S Irudaya Rajan | New Delhi | Updated: September 19, 2018 8:39:01 am
kerala emigration, Kerala Migration Survey, Centre for Development Studies, Gulf countries, people moving out of Kerala, Saudi Arabia, Gulf Cooperation Council The economic boom within the Gulf countries gave migration a considerable boost, reaching its peak in terms of both numbers and remittances. (Express Photo/Nirmal Harindran)

Migration has been a way of life in Kerala for decades and also a major global supplier of manpower. Migratory tendencies have been inherent in the context of Kerala, shaping the economic, demographic, social and political spheres of life. The economic boom within the Gulf countries gave migration a considerable boost, reaching its peak in terms of both numbers and remittances.

All of these were brought to light after the first Kerala Migration Survey (KMS) 1998. Started as a one-time study during March-November 1998, the KMS soon developed into a continuous ongoing activity called Migration Monitoring Study, Kerala. The Indian Council for Social Science Research (ICSSR) financially supported this study under its Indo-Dutch Programme on Alternatives in Development (IDPAD). Large-scale surveys were used to collect data on different types of migrants — emigrants, return migrants, out-migrants and return out-migrants.

READ | Over 11% dip in emigration from Kerala in five years, finds study

KMS 2018 is based on a large-scale sample survey of 15,000 households conducted during January 1, 2018 through March 31, 2018, funded by the Department of Non-resident Keralite Affairs, Government of Kerala; KNOMAD; World Bank; REALM; Columbia University; and Kerala and World Economy programme of CDS.

Emigration trends

Over the years, there has been a drop in the number of emigrants from Kerala. This can be attributed to the global recession of 2008 that gripped the Gulf countries — where most of the emigrants from Kerala live — and beyond. According to KMS 2018, there are 2.1 million emigrants from Kerala across the world, of whom 15.8% are females. Among the 14 districts, four (Malappuram, Kannur, Thrissur, and Kollam) account for 50% of the emigrants.

There is an estimated reduction of 3 lakh emigrants during 2013-18, which is one-tenth of the 2013 emigrants. Emigration figures showed a constant increase during 1998-2013 (34.9%) but inter-survey differences have shown an increase with a declining phase. Finally, in 2018, we reached a stage where emigration figures show a negative growth of 11.6% compared to 2013. A drastic decline is observed in Saudi Arabia, from 37.5% of all migrants in 1998 to 23% in 2018. UAE’s share shows an increase from 31% in 1998 to 39.1% in 2018.

Decreasing emigration from Kerala can be due to the cumulative effects of several reasons. First, demographic advances have decreased the population in the migration-prone age group (15-29 years) since Kerala attained replacement-level fertility as early as 1987. Second, wage levels in the Gulf economies have not improved after the global financial crisis; this has led to lower savings and demotivating people to migrate. Third, wages in the domestic economy have increased compared to other states; Kerala has the highest wage rate in the informal sector in India. Fourth, prices of oil — the commodity on which the Gulf economy is based — have been declining since 2010. Although the last one year has seen a slight increase in oil prices, the growth of the Gulf economy has suffered a major setback. Construction and other services are not as vibrant as it used to be. Fifth, with nationalisation policies such as Nitaqat and recently introduced family taxes in Saudi Arabia, the Gulf economies are not conducive for current and prospective migrants. Increasingly, native youth are trained and employed in occupations that once went to migrants. Sixth, decades of investment in education have made Keralites skilled. High-skilled labour migrates to other parts of the world, mainly to the developed economies in the West. People are also increasingly migrating to the West through the Gulf.

Emigrant characteristics

Change in labour markets considerably improved the educational level of emigrants. Unskilled manual labourers of earlier days have been replaced by skilled workers. According to KMS 2018, of the total emigrants, 42.3% are graduates or have a higher qualification. One in every five households in Kerala has a migrant. Among religious groups, one in three households is a Muslim, one in five households is a Christian, and one in 10 households is a Hindu.


The estimated total remittances to Kerala are Rs 85,000 crore as per KMS 2018. For every Rs 5 that comes to India, Re 1 is remitted to Kerala. On the state level, one-fifth of the total remittance to Kerala is to Malappuram (21%), followed by Kollam (15%) and Thrissur (11%). Remittances to the state have increased, because Keralites in the Gulf have climbed the social ladder and earn higher wages. Thanks to the weakening rupee, more can be remitted to families in Kerala than earlier. KMS 2018 has confirmed the trend — that emigration from Kerala is falling and return migration is on the rise. The long history of migration from Kerala to the Gulf is in its last phase.

Flood & migration

Emigration and remittances have played a predominant role in enabling households in Kerala to meet their basic needs and to invest in assets. KMS shows that migrants use over 40% of their remittances on purchasing land, construction and repayment of housing mortgage. In the short to medium runs, investments by the diaspora and remittances from migrants will be mainly used for rebuilding the most basic forms of physical capital. Non-emigrant families too may plan to send someone from among their family members as a livelihood strategy to cope with the loss of assets and livelihoods. Thus, emigration could also help the local economy in its recovery.

At this juncture, a vital question that arises is how emigrants are going to respond to the recent floods and whether it would induce emigrants to return home or potential emigrants to cancel emigration plans, or whether it would trigger more emigration. Kerala currently has close to 3 million migrants from other states who have replaced workers who have left for the Gulf countries (replacement migration). Are they likely to participate in the reconstruction of the economy of Kerala, or would they leave to their home states for better opportunities? In the light of significant demographic pressures like ageing, Kerala has to slowly move towards a new model from the remittance-dependent economy that it is today. In the present scenario, it needs to be seen as to what patterns would emerge with regard to emigration, return emigration, internal migration and remittances to Kerala in the coming years. We expect the trend will change after the floods as migration will play a major role as a livelihood option for the New Kerala, where we expect further migration and remittances. This requires another quick assessment by the Government of Kerala.

Professor S Irudaya Rajan of Centre for Development Studies, Kerala, led the Kerala Migration Study 2018

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