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Foreign-born persons make up 89 percent of the population and 96 percent of the workforce in the United Arab Emirates (UAE).

The migrant workers are recruited from around the world (with most coming from South Asia) using both source-country brokers and UAE-based recruiting firms. A foreign worker qualifies for a visa if the worker has a passport and a signed labor contract with an UAE employer.

The employment contract clearly specifies working conditions. For example, employers typically cover the costs of lodging, health insurance, and travel. Workers live in large labor camps and receive one month of leave per year.

The government regulates the length of the employment contract between the firm and the migrant worker, with most recent contracts specifying a 2-year time frame.

• Prior to 2011, migrant workers were tied to the employer for the duration of the multiyear contract. When the contract expired, workers had only two options for remaining in the UAE. They either could renew the contract with the existing employer, or they could move to another firm if the employer approved the move by giving the migrant a No-Objection Certificate (NOC). These provisions effectively tied the worker to a single firm and gave the employer a substantial degree of monopsony power.
• In January 2011, the UAE implemented a policy reform that allowed migrant workers to move to another firm after the contract expired without approval from their former employer.

This reduction in monopsony power would be expected to increase the earnings of migrant workers in the UAE.

• In fact, the policy shift increased the monthly earnings of migrant workers who remained in the UAE after their employment contract expired by about 11 percent.

• While some of these workers moved to other firms after the expiration of the contract, many of them were retained by the same firm and paid a higher salary. </aside>

• Source: Suresh Naidu, Yaw yarko, and Shing-Yi Wang, “Monopsony Power in Migrant Labor Markets: Evidence from the United Arab Emirates,” Journal of Political Economy 124 (December 2016): 1735–1792.

참고자료

• https://en.wikipedia.org/wiki/United_Arab_Emirates