MIGRATION DYNAMICS IN BHUTAN RECENT TRENDS, DRIVERS, AND IMPLICATIONS Jumana Alaref Alvin Etang Ndip Cheku Dorji Laurine Martinoty MIGRATION DYNAMICS IN BHUTAN RECENT TRENDS, DRIVERS, AND IMPLICATIONS Jumana Alaref Alvin Etang Ndip Cheku Dorji Laurine Martinoty © 2025 International Bank for Reconstruction and Development/ The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Disclaimer This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 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Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail:pubrights@worldbank.org. Attribution—Please cite the work as follows: Alaref, Jumana; Etang Ndip, Alvin; Dorji, Cheku; and Martinoty, Laurine. 2025. Migration Dynamics in Bhutan: Recent Trends, Drivers, and Implications. Washington, DC: World Bank. Design Tandin Namgyal, Kuensel ACKNOWLEDGEMENTS This report was prepared by a team co-led by Ashiq Aziz, Sonam Lhamo, and Suhail Kassim who Jumana Alaref and Alvin Etang Ndip and includes provided input and feedback at various points Cheku Dorji and Laurine Martinoty. Aishwarya Patil during the report’s preparation. The team is and Phillippe Leite provided valuable contributions thankful to Tsholing Agriculture and Environment at the design, questionnaire development, and Studies for conducting the data collection sampling stages of data collection. exercise for this report, Kinley Shering for editing the report, and Tandin Namgyal for graphically The team would like to thank the following World designing it. Bank Group colleagues: Cecile Fruman, Stefano Paternostro, Mathew A. Verghis, Cem Mete, Ximena The team would like to express its appreciation to Del Carpio, S. Amer Ahmed, Souleymane Coulibaly, external stakeholders who provided feedback and and Adama Coulibaly who provided feedback, assistance at different points during the report guidance, and support from management; preparation process from the Royal Government Maheshwor Shrestha, Matthew Dornan, and of Bhutan, namely the Ministry of Industry, Mauro Testaverde who served as peer reviewers Commerce, and Employment (MoICE) and the at the decision review stage for the report; and National Statistics Bureau. MIGRATION DYNAMICS IN BHUTAN iii TABLE OF CONTENTS Acknowledgements.....................................................................................iii 4.2 For aspiring migrants, while pull factors are Executive summary.................................................................................. vii similar, push factors such as unemployment and dissatisfaction with working conditions Introduction ................................................................................ xi play a big role, especially in the aftermath of COVID-19 pandemic. ................................................................15 1.1 Bhutan’s External Migration Trends between 2000 -2020.................................................................................... xiii Section 5. Prospects of Migrants Returning 1.2 Objectives of the Report and Methodology.............xvi to Bhutan and Aspiring Migrants Remaining 1.3 Limitations......................................................................................xvii in Bhutan......................................................................................18 1.4 Organization of the Report...............................................xviii 5.1 Aspiring migrants’ reservation wage is three Section 2: Profile of Migrants and Aspiring times higher than their current monthly Migrants...........................................................................................1 income in Bhutan, and around one-fourth of migrants would require the equivalent wage 2.1 Migrants and aspiring migrants share broadly they earn in Australia or higher in order to similar profiles, except that aspiring migrants consider returning to Bhutan. ............................................18 tend to be younger and relatively less educated...... 1 5.2 The reservation wages of both migrants and 2.2 Both migrants and aspiring migrants are much aspiring migrants will be difficult to achieve younger and more educated when compared given the wage structures in the domestic to non-migrants, but they are more likely to be labor market...................................................................................20 unemployed........................................................................................ 2 5.3 Regardless of their return plans, not many 2.3 Migrants in Bhutan were mostly working as civil migrants have taken their children and families servants in high-skilled occupations, with them, and the majority continue to send and aspiring migrants are similarly engaged in remittances back to Bhutan. ......................................... 23 high-skilled, well remunerated occupations................. 4 Section 6. Policy Implications and Areas for Section 3.Migrant Outcomes at Destination.................7 Future Research.........................................................................24 3.1 Australia is the most prominent corridor among 6.1 Implement domestic reforms to create high-skilled migrants, with education cited as a more and better jobs to retain local talent primary motivation for migration. ....................................7 among aspiring migrants and other skilled 3.2 A second motivation is the prospect of higher workers, including returnee migrants. ......................... 25 earnings given that migrants receive much higher 6.2 Reduce the costs of external migration ................... 26 wages in Australia than in Bhutan, especially for 6.3 Maximize the benefits of external migration women. ................................................................................................. 8 to Bhutan...........................................................................................27 3.3 However, among migrants who work, there is 6.4 More follow up studies needed for significant occupational downgrading in evidence-based policy making...........................................29 Australia..............................................................................................10 References......................................................................................................30 Section 4. Role of Push and Pull Factors....................... 12 Annex ................................................................................................................31 4.1 Migrants are attracted by the prospects of better education opportunities, high earning potential, and a growing Bhutanese community in Australia...........................................................12 iv MIGRATION DYNAMICS IN BHUTAN Boxes Figure 2.2b. Marginal effect on the probability to be a migrant or aspiring migrant...................... 3 Box 1. Role of Networks in Increasing the Figure 2.2c. Age of migrants, aspiring migrants, Appeal of Australia to Bhutanese the working-age population................................... 3 workers....................................................................................14 Figure 2.2d. Education breakdown of migrants, Box A2. Survey Questionnaire Modules. .......................... 42 aspiring migrants, the working-age population........................................................................... 3 List of Figures Figure 2.2e. Distribution of monthly household income per capita......................................................... 4 Figure ES 1. A three-pronged approach towards Figure 2.2f. Education breakdown of members managing the surge of external aged 15+, by household category....................... 4 migration..............................................................................x Figure 2.3a. Occupation of migrants (while in Bhutan), Figure 1a. Monthly migration through Paro aspiring migrants, individuals with International Airport, Jan-Dec 2022............ xii no intention to migrate, and Figure 1b. Bhutanese migrant stock at midyear, average employed Bhutanese.............................. 5 by destination country............................................ xii Figure 2.3b. Employment of migrants Figure 1.1a. Total number of external migrants (while in Bhutan), aspiring migrants, 15+ in 2000, 2010, and 2020, and individuals with no intention to broken down by education level....................... xiii migrate, by economic activity.............................. 5 Figure 1.1b. Total number of external migrants Figure 2.3c. Employment of migrants (while in Bhutan), 15+ in 2000, 2010, and 2020, aspiring migrants, and individuals with no broken down by the five main intentions to migrant, by sector......................... 6 destination countries.............................................. xiii Figure 2.3d. Wages for migrants (while in Bhutan), i. Non-tertiary educated external aspiring migrants, individuals with no migrants....................................................................... xiii intention to migrate, and average ii. Tertiary educated external migrants...... xiii employed Bhutanese.................................................. 6 Figure 1.1c. Distribution of migrants in 2020 by Figure 3.1 a. Destination countries among destination country..................................................xiv migrants and aspiring migrants......................... 8 Figure 1.1d. Distribution of tertiary educated Figure 3.1b. Labor market status of current migrants in 2020, by destination migrants at destination........................................... 8 country...............................................................................xiv Figure 3.2a. Monthly income of migrants in Figure 1.1e. Share of men in total outward Bhutan and at destination.................................... 9 migration, 2020........................................................... xv Figure 3.2b. Difference in monthly income (Nu) Figure 1.1f. Share of migrants with tertiary between destination and Bhutan...................... 9 education in total outward migration, Figure 3.2c. Monthly income of female migrants in 2020..................................................................................... xv Bhutan and at destination. .................................. 9 Figure 1.1g. Distribution of destination countries for Figure 3.2d. Monthly income of male migrants Bhutanese and Nepali migrants....................... xv in Bhutan and at destination.............................. 9 Figure 1.1h. Distribution of destination countries Figure 3.2e. Distribution of income in Bhutan for for Bhutanese and Nepali tertiary aspiring migrants, what they expect educated migrants..................................................... xv at destination. .............................................................10 Figure 2.1a. Gender breakdown of migrants Figure 3.2f. Distribution of income for migrants and aspiring migrants................................................. 1 and expected income for aspiring Figure 2.1b. Location of households with a migrants at destination.........................................10 migrant and an aspiring migrant...................... 2 Figure 3.3a. Occupations of migrant workers at Figure 2.2a. Predicted probability for being a home and destination (1-digit ISCO migrant or aspiring migrant, by age, classification). ...............................................................11 all else equal...................................................................... 3 MIGRATION DYNAMICS IN BHUTAN v Figure 3.3b. Occupations of migrant workers at Figure A2. Distribution of migrants in 2020 by destination........................................................................11 destination country, for both men and Figure 4.1a. Distribution of current migrants by women.................................................................................31 primary motivation to migrate.........................13 Figure A3. Share of men in total outward Figure 4.1b. Distribution of current migrant migration, 2000...........................................................31 students by primary motivation to Figure A4. Share of migrants with tertiary migrate................................................................................13 education in total outward Figure 4.2a. Distribution of aspiring migrants by migration, 2000...........................................................31 primary motivation to migrate.........................15 Figure A5. Minimum monthly income for aspiring Figure 4.2b. Number of job seekers in Bhutan, by migrants to reconsider not migrating education, 2022...........................................................16 expressed as a fraction of expected Figure 4.2c. Distribution of current employment and income abroad.............................................................. 32 expected labor demand in Bhutan, by Figure A6. Minimum monthly income for aspiring occupation, 2022............................................................. migrants to reconsider not migrating Figure 5.1a. Distribution of current monthly income, expressed as a fraction of current expected income abroad, and minimum monthly income in Bhutan.................................. 32 monthly required income to not migrate Figure A7. Distribution of monthly income while among aspiring migrants.......................................19 in Bhutan and minimum required Figure 5.1b. Distribution of monthly income at income to return to Bhutan destination and minimum monthly among migrants.......................................................... 32 income required to return to Bhutan Figure A8. Relationship between external among migrants..........................................................20 migration and economic development....... 33 Figure 5.1c. Difference between minimum monthly income required to return to Bhutan List of Tables and monthly income at destination among migrants..........................................................20 Table 1. Sample size and response rate by Figure 5.2a. Distribution of observed wages in Bhutan household category.......................................................xvii for individuals with a higher secondary Table 2. List of occupation shortages in Western education and above, together with Australia due to retention gaps, 2024..............14 minimum required monthly wages to Table A1. Descriptive Statistics on Select Individual return to Bhutan or remain in Bhutan and Household-Level Outcomes Across for migrants and aspiring migrants...............21 Household Categories................................................... 34 Figure 5.2b. Distribution of wages across age Table A2. Differences between households with groups for the six most frequent migrants and with aspiring migrants professions of migrants prior to (N=607)................................................................................... 36 leaving Bhutan............................................................. 22 Table A3. Differences between households where Education......................................................................... 22 there is an intention to migrate Tourism/Hotel............................................................... 22 (realized or not) and households Engineers.......................................................................... 22 without an intention to migrate Health................................................................................. 22 (N=1207)................................................................................39 Accountants/Fincance............................................ 22 Shops.................................................................................. 22 Figure 5.3a. Share of migrants and aspiring migrants who have taken/plan on taking their children and extended family members........................................................... 23 Figure 6a. Policy interventions across the full migration cycle..............................................................27 Figure A1. Total number of external migrants 15+ by gender.................................................................31 vi MIGRATION DYNAMICS IN BHUTAN EXECUTIVE SUMMARY Migration of Bhutanese workers to Australia The main messages of the report are as follows: has sparked intense public debate and garnered media attention in recent years. The profile of Message 1: Even before the current surge in migrants, largely composed of civil servants from migration, Australia had become an increasingly key sectors, has alarmed the Royal Government of attractive destination especially for educated Bhutan about potential brain drain and disruption Bhutanese over the past two decades, and this to the country’s development prospects. Exit data coincided with Bhutan’s development success. from Paro International Airport highlights the While overall external migration from Bhutan sharp increase in external migration, with monthly has remained stable since 2000-2020, the departures increasing from less than 500, on proportion of migrants with a tertiary diploma has average, prior to the COVID-19 pandemic to more increased notably, from 8.56% in 2000 (and 4.17% than 5,000 a month in early 2023. According to in 2010) to 13.53% in 2020. Moreover, by 2020, the data from the Department of Economic and Australia had emerged as the fourth most popular Social Affairs of the United Nations, the stock destination for tertiary-educated Bhutanese of Bhutanese migrants in Australia more than overall, and second only to the United States of doubled from 12,424 in 2020 to 25,363 in 2024. America. These shifts have unfolded against the A large proportion of these migrants are students. backdrop of remarkable development gains for The Australian Bureau of Statistics reports that Bhutan over the past two decades, in the form of 13,406 international students from Bhutan were rising incomes, poverty reduction, and improved enrolled in Australian universities between January human development indicators. This pattern and September 2024 alone. At the same time, follows established economic theory: as nations aspirations to migrate are high among Bhutan’s develop, external migration increases, with better- working-age population. Notably, 10% of NEET educated citizens often at the forefront, seeking (neither in employment, education, nor training) opportunities in more advanced economies. youth aspire to migrate. Message 2: Youth and highly skilled Bhutanese This report sheds more light on the recent surge are currently migrating to Australia, with civil in external migration, mainly to Australia,1 by servants making up an alarmingly high share of documenting the profile of migrants and aspiring the migrants. migrants, and identifying key drivers behind Those departing represent Bhutan’s young and this trend, as well as outlining policy options to educated segments, with 53% of migrants holding manage it. The report relies on a phone survey university degrees compared to just 7% of the conducted in 2024, which was administered general working-age population. Possession of on 1,208 households. These households fall into higher secondary education or above increases the three categories: 465 households have at least probability of migrating or aspiring to migrate by one member who migrated, primarily to Australia 60-75 percentage points, creating a classic brain post 2022; 143 households have one member who drain scenario in a small country that can hardly aspires to migrate within a one-year timeframe; afford it. and the remainder of households serve as a comparator group to the other two household The employment profiles of both groups, current categories. migrants and those planning to leave, paint a 1 At the screening stage, migrants who left post 2022 to other high-income English-speaking countries, such as Canada, the United States, and the United Kingdom were eligible to be part of the survey. However, it is evident that the recent surge is mostly to Australia, as almost all migrants in the sample left for Australia, and 88% of aspiring migrants plan to move there. MIGRATION DYNAMICS IN BHUTAN vii portrait of Bhutan’s skilled workforce. These providing support systems for new migrants. In individuals disproportionately occupy high-skilled addition, many prominent members of the Royal positions in critical sectors, and earn salaries Government of Bhutan have earned graduate exceeding the typical Bhutanese worker. Civil degrees from Australian universities over the servants, the administrative backbone of the years, further reinforcing Australia’s appeal as an country, are leading the exodus. Nearly half (49%) attractive destination. of all migrants previously worked in government roles, with the education sector alone accounting Message 4: While Bhutanese migrants for 25%, representing the largest affected sector. are helping address labor shortages in key In 2024 alone, a staggering 69.5% of voluntary occupations in Australia, this is resulting in resignations in the civil service came from significant occupational downgrading. education and health sectors. Other Australia-specific (pull) factors stem from transformations taking place such as demographic Message 3: The economics of migration, driven shifts and growing labor shortages in select by higher earnings and better educational occupations. As its population ages, Australia will opportunities in Australia, are compelling, experience slow growth in its future labor force, especially for women. increasing demand for jobs in the care sector, as To answer the central question of “Why well as other low-skilled occupations. Evidence Australia?”, survey findings reveal that migrants suggests that Bhutanese migrants seem to be are attracted by the prospects of better filling some labor shortages in these occupations, educational opportunities and higher earning with six in ten migrants employed in low-skilled potential in Australia. A high share of migrants roles in the cleaning or care sectors. in Australia (43%) are students, and 64% of aspiring migrants also cite education as their However, the implication is that migrants are primary reason for migration. Over 40% of aspiring universally experiencing occupational downgrading migrants perceive the quality of education abroad abroad, which is concerning, if it persists, as it to be better than in Bhutan. reduces their future earning potential and the likelihood of transferring valuable know-how back Among employed migrants, there is a huge wage to Bhutan. While 46% of migrants worked in differential between their earnings in Australia professional occupations in Bhutan, only 3% do so and in Bhutan. The distribution of wage ranges abroad. for migrants between the two countries does not overlap. While most migrants earned below Message 4: The COVID-19 pandemic Bhutanese Ngultrum (Nu) 40,000 per month in exacerbated Bhutan’s structural weaknesses in Bhutan, the majority of them earn at least Nu the labor market, acting as a catalyst for the 60,000 in Australia. The financial incentive is surge in migration soon after the reopening of particularly compelling for women, as the gender borders in 2022. wage gap observed in Bhutan is significantly The COVID-19 pandemic and its aftermath narrower in Australia. likely explain why the surge in migration gained momentum in recent years and not earlier. Over Other key factors that make Australia an the years, Bhutan’s domestic labor market has attractive destination include its favorable visa struggled to create adequate opportunities for its regime that allows dependents of student visa increasingly educated workforce. The hydropower- holders to work unlimited hours, relatively cheap led growth model absorbed a limited number of tuition fees, and affordable cost of living. The highly skilled workers and contributed to a slow presence of diaspora networks in Australia, which structural transformation. The public sector have grown over time, also plays a pivotal role, expansion to absorb highly educated workers viii MIGRATION DYNAMICS IN BHUTAN in urban areas came at the expense of a small reservation wages are also difficult to meet if the private sector, dominated by low-productivity significant occupational downgrading migrants microenterprises. experience at destination persists. The COVID-19 pandemic exacerbated these Message 7: Domestic reforms to create more weaknesses. Unemployment jumped from 3% and better jobs are needed to retain local talent in 2015-19 to 6% in 2022, disproportionately among aspiring migrants and other skilled affecting urban women (15%) and the highly workers. At the same time, migration can be educated (12%). Joblessness or economic managed, not stopped, and policymakers have inactivity among surveyed individuals increases a range of tools to minimize its costs and the probability of migration intentions by 10 maximize its benefits. percentage points, all else being equal. Factors The findings highlight the urgency of domestic specific to Bhutan’s labor market (push factors) reforms to retain local talent within Bhutan’s feature prominently in migrants’ calculus, with labor market among aspiring migrants and among 38% citing inadequate earnings as their main all skilled workers, including returnee migrants. motivation for leaving. Push factors also seem A significant share of aspiring migrants (20%) prevalent even in Bhutan’s once prestigious public indicate they would accept a wage at or below sector. The sector witnessed a high number of the median wage of a skilled worker in Bhutan, voluntary resignations since 2022, driven by suggesting that meaningful reforms could concerns related to limited career advancement, positively influence their migration decisions. In modest compensation, heavy workloads, and addition to creating more and better jobs in the complex bureaucracy. These challenges are private sector to facilitate productive employment, especially acute in the health sector, where only civil service reforms are important to improve 29% of healthcare providers are satisfied with job satisfaction, career prospects, and worker financial compensation. retention, especially in critical sectors. Message 6: Migrants and aspiring migrants In parallel, policymakers must adopt strategies are willing to return to Bhutan or reconsider to better manage the ongoing surge in external migrating altogether, however, their minimum migration, aiming to minimize its costs and required income is difficult to achieve given maximize its benefits. Given the strong role of wage levels in the domestic labor market. pull factors abroad and the limitations of the Due to its policy relevance, the report explores domestic labor market in meeting migrants’ the question of willingness among migrants to and aspiring migrants’ high reservation wages, return to Bhutan and among aspiring migrants to external migration will likely continue in the reconsider their migration plans. Findings indicate foreseeable future. The costs associated with that both groups appear willing to return and/ brain drain can be minimized by implementing or not migrate if their wages in Bhutan were to targeted policies in essential sectors, such as improve beyond a certain threshold. While the expanding domestic education, training, and minimum required monthly income to return and/ certification systems for critical occupations or not migrate (reservation wage) is, on average, through regional and/or international cooperation. lower than what they currently earn in Australia The benefits can be maximized by implementing (or expect to earn for aspiring migrants), it is policies across the entire migration cycle, from difficult to attain given wage levels in the domestic pre-departure information and strengthening labor market. For example, one in ten aspiring reintegration programs for returnee migrants to migrants and one in five migrants expect a fostering sustained engagement with diaspora monthly income exceeding Nu 100,000, equivalent networks. This three-pronged approach is further to the income of top 1% wage earners in 2022. The summarized in Figure ES 1. MIGRATION DYNAMICS IN BHUTAN ix Figure ES 1. A three-pronged approach towards managing the surge of external migration. • Focus on: (i) Improving economic diversification in non-hydropower sectors and creating a favorable business environment for growth of productive Implement reforms to and high-paying jobs in the private sector; (ii) Enhancing public sector create more and better employment by examining governance and human resource management jobs policies to improve job satisfaction and worker retention, particularly in health and education sectors. • Consider expanding Bhutan’s capacity for training and certifying high- skilled workers in select occupations to increase the likelihood that a Minimize migration sufficient number of high-skilled workers stay, even if others migrate. potential costs associated • Financing such an expansion can involve international and/or regional wth brain drain cooperation through, for example, the Global Skills Partnerships (GSPs) between origin and destination countries • Focus on making migration safer, more productive, and less costly to migrants. Maximize benefits of • Interventions to cover the full migration cycle, with targeted focus on migration for all providing tailored financial guidance for prospective migrants, especially students, a deliberate engagement with the diaspora, and policies to support return migration. • Lower the costs of sending remittances, encourage the use of formal channels, and increase financial literacy among recipients to maximize investments in Bhutan. Finally, further research and studies are needed over the last few years and establish linkages to inform a more comprehensive diagnostic of with other datasets on returnee migrants; (iv) Bhutan’s external migration, especially where evaluation of remittance flows from Australia knowledge gaps persists. These include: (i) a better and whether they stabilize once student migrants understanding of the occupations most impacted transition to full-time employment abroad; and (v) by external migration within the civil service; (ii) the likely effectiveness of government programs assessment of migrants long term outcomes and policies, such as the development of special in Australia and role of key policies in Australia administrative zones, in retaining local talent and that may have facilitated the surge; (iii) use of incentivizing the return of Bhutanese diaspora. administrative data to examine migration trends x MIGRATION DYNAMICS IN BHUTAN INTRODUCTION Bhutan’s development trajectory has been on et al., 2024). This challenge reached its heights an upward trend. The economy grew at an in the aftermath of the COVID-19. The national average annual rate of 7% between 2001 and unemployment increased from an average of 3% 2019, largely driven by the expansion of the during 2015–19 to 6% in 2022, with the highest hydropower sector since the mid-1980s. This unemployment among urban women (15%), youth strong economic performance contributed to (7% among those ages 20–24), and those with substantial poverty reduction over the last two post-secondary education and above (12%). decades. Extreme poverty was eradicated by 2022, and the proportion of the population living below In pursuit of better job opportunities, internal the US$3.65 a day poverty line2 declined from 7% labor mobility within Bhutan is significant. Over to less than 2% between 2017 and 2022 (World one-third of the working-age population born in Bank, 2025). Bhutan also significantly improved Bhutan has lived at least once in a dzongkhag its services and human development indicators other than their current dzongkhag of residence as measured by life expectancy at birth, years of (Alaref et al., 2014). This trend reflects the gradual schooling, and gross national income per capita. structural transformation away from agriculture The skill level of the working-age population, for with growing concentration of industry and instance, increased rapidly between 2013 and service sector jobs in urban areas. Notably, the 2022. The share of workers without a diploma urban–urban migration flow is nearly as prevalent decreased by 10 percentage points, while the as the rural–urban flow. Among individuals who proportion of those with a tertiary degree doubled have migrated across dzongkhags, 45% previously (Alaref et al., 2024). resided in an urban area, compared to 54% who had lived in a rural area. Internal migration is Bhutan’s gains were also accompanied by associated with improved labor market outcomes5, structural challenges that have intensified over and it is mostly common among the better- time. The hydropower-led growth, its impact on educated individuals. Workers with no formal structural transformation3, and the accompanied education are twice less likely to have moved expansion of public sector employment and its across dzongkhags compared to those with a large state-owned enterprise (SoE) sector4 have tertiary diploma (Alaref et al., 2024). had an adverse impact on the competitiveness and growth of the private sector. The private External migration from Bhutan has also increased sector is dominated by micro-enterprises that do in recent years, driven by rising standards of living not grow over time and are concentrated in few and improved educational attainment. However, geographic regions. These firms demonstrate low the scale and the composition of this external labor productivity, and primarily employ low- migration have alarmed policymakers about skilled labor in low employment conditions (Alaref potential ‘brain drain’ and disruptions to service 2 This poverty line is used for lower-middle-income countries. 3 The hydropower-led growth model is not labor-intensive. As a result, it has neither provided strong incentives for workers to transition out of agriculture nor directly affected agricultural productivity. Therefore, the labor demand in agriculture remains largely unaffected, contributing to slow structural transformation. Between 2013 and 2022, the share of agriculture in total employment fell from 57% to 44% (Alaref et al., 2024). 4 The government has relied heavily on public sector employment to absorb the growing share of educated workers, particularly in urban centers. The public sector alone accounts for 25% of total employment, with the SoE sector comprising about 20% of total public sector jobs (Alaref et al., 2024; World Bank, 2024a). 5 Data from the Bhutan Labor Force Survey shows that only 1% of migrants who moved for work are unemployed and 5% are inactive in their destination dzongkhags (Alaref et al., 2024). MIGRATION DYNAMICS IN BHUTAN xi delivery. Following the reopening of Bhutan’s more than tripled since 2013, with 27,810 Bhutan- borders in mid-2022 post COVID-19 pandemic, born residents as of June 2023, according to the the number of Bhutanese emigrating through Australian Bureau of Statistics.6 The profile of Paro International Airport has sharply increased. migrants is predominantly composed of skilled Monthly departures increased from less than 500, professionals, with a large share of civil servants7. on average, prior to the pandemic to more than The majority of migrants initially enter Australia 5,000 a month in early 2023 (Figure 1a). Australia as international students. Over the past five years, has emerged as the primary destination country the number of Bhutanese students in Australia for Bhutanese migrants. has increased eightfold, reaching 13,406 during January–September 2024 period.8 Aspirations Data from the United Nations confirm that the to migrate remain high among the broader stock of Bhutanese migrants to Australia jumped population. One out of ten youth who are neither from 12,424 in 2020 to 25,363 in 2024 (Figure in employment, education, nor training (NEET) 1b). The Bhutanese population in Australia has aspire to migrate (Alaref et al., 2024). Figure 1a. Monthly migration through Paro Figure 1b. Bhutanese migrant stock at midyear, by International Airport, Jan-Dec 2022. destination country. 35,000 6,000 5,500 30,000 5,000 4,500 25,000 25,000 No, of people 4,000 20,000 3,500 2,500 15,000 2,000 10,000 12,424 1,500 1,000 5,834 5,000 500 0 2015 2020 2024 January 15 June 15 November 15 April 16 September 16 February 17 July 17 December 17 May 18 October 18 March 19 August 19 January 20 June 20 November 20 April 21 September 21 February 22 July 22 December 22 Australia China India Nepal North America Europe Source: Kuensel (May 20, 2023). In World Bank. 2024a. Source: United Nations Department of Economic and Social Country Economic Memorandum: Bhutan. Washington, DC: Affairs, Population Division (2024). International Migrant Stock World Bank. 2024. 6 https://www.abs.gov.au/statistics/people/population/australias-population-country-birth/latest-release#data-downloads 7 On civil servant resignations, please see: https://kuenselonline.com/why-are-civil-servants-resigning/. 8 https://www.dfat.gov.au/geo/bhutan/bhutan-country-brief#:~:text=People%2Dto%2Dpeople%20links.%20In%20the%20last%20 decade%2C%20Australia,from%20Bhutan%20for%20the%20January%E2%80%93September%202024%20period. xii MIGRATION DYNAMICS IN BHUTAN 1.1 Bhutan’s External years. Notably, the US and Canada have become more prominent destinations for non-tertiary Migration Trends between educated migrants, while the US and Australia 2000 -2020 have seen an even more significant increase for those with tertiary education, as shown in Figure Australia has increasingly emerged as an 1.1b.9 attractive destination, especially for individuals with tertiary education. Figure 1.1a. Total number of external migrants 15+ in 2000, 2010, and 2020, broken down by education An analysis of past trends is important to level. contextualize the recent surge in external migration to Australia. While overall external 100,000 migration from Bhutan has remained relatively 80,000 stable since the 2000s, this stability masks 60,000 significant compositional shifts. First, although the proportion of external migrants with a tertiary 40,000 diploma has traditionally been low, this share has 20,000 increased notably, rising from 8.56% in 2000 (and 0 4.17% in 2010) to 13.53% in 2020, as shown in 2000 2010 2020 Figure 1.1a. Second, while Nepal and India were the Non tertiary primary destination countries in 2000 and 2010, Tertiary new destinations have gained ground in recent Figure 1.1b. Total number of external migrants 15+ in 2000, 2010, and 2020, broken down by the five main destination countries. i. Non-tertiary educated external migrants ii. Tertiary educated external migrants 100,000 15,000 80,000 10,000 60,000 40,000 5,000 20,000 0 0 2000 2010 2020 2000 2010 2020 USA Nepal USA Australia India Australia Nepal Canada Canada Other Great Britain Other Source: Global Bilateral Migration Matrix 2000-2020. World Bank Migration Database. 9 In the case of the US, however, while the figures show it gained large grounds among both tertiary and non-tertiary Bhutanese, the composition of Bhutanese who settled there is likely mostly refugees, and thus, different from Australia which is mostly attracting students and economic migrants. https://thehimalayantimes.com/nepal/where-in-earth-have-been-bhutanese-refugees-from-nepal-resettled/ MIGRATION DYNAMICS IN BHUTAN xiii In 2020, Australia emerged as the fourth most educated to non-tertiary educated migrants popular destination for Bhutanese migrants (Figure (0.44) among all destination countries, followed 1.1c) and the second most preferred destination by the US, with a ratio of 0.23. Migration trends for those with tertiary education, following show no significant gender disparities. Bhutanese the US (Figure 1.1d). Between 2000 and 2020, women migrate as much as men, and to the same Australia also recorded the second-fastest growth destination countries (Figures A1 & A 2 in the in Bhutanese migrant share, trailing the US. In Annex). addition, Australia has the highest ratio of tertiary- Figure 1.1c. Distribution of migrants in 2020 by Figure 1.1d. Distribution of tertiary educated migrants destination country. in 2020, by destination country. Canada 2.85% Canada Nepal 3.91% UK 0.97% Australia Other 2.46% India Australia 16.99% Nepal USA 72.82% USA 0 20 40 60 Tertiary Below Tertiary Source: Global Bilateral Migration Matrix 2000-2020. World Bank Migration Database. Bhutan’s migration trends differ from other since 2000 (Figure 1.1e, Figure A3 in Annex) South Asian countries, particularly in the diver- Additionally, although the share of Bhutanese sification of migration pathways to high-income, tertiary educated migrants has recently increased, English-speaking destinations by 2020. Bhutanese migrants tend to have lower average Within South Asia, Bhutan stands out for having education levels compared to migrants from other one of the lowest proportions of men (50.71%) South Asian countries. In 2020, Bhutan had the in its outward migrant population in 2020. This lowest share of migrants with tertiary education is a notable exception in a region where male (13.53%), except for Afghanistan (Figure 1.1f, Figure overrepresentation in migration has been increasing A4 in Annex). xiv MIGRATION DYNAMICS IN BHUTAN Figure 1.1e. Share of men in total outward migration, Figure 1.1f. Share of migrants with tertiary education 2020. in total outward migration, 2020. 80 40 60 30 Percent 40 20 20 10 0 0 MDV BTN AFG NPL LKA PAK IND BGD AFG BTN NPL BGD LKA PAK MDV IND Source: Global Bilateral Migration Matrix 2000-2020. World Bank Migration Database. Note: MDV=Maldives; BTN=Bhutan; AFG=Afghanistan; NPL=Nepal; LKA=Sri Lanka; PAK=Pakistan; IND=India; BGD=Bangladesh. A comparison of Bhutanese and Nepali outward Gulf States—destinations that became even more migration flows—two countries with similar prominent in 2010 and 2020. Over the same period, socioeconomic characteristics—shows how Bhutanese migrants increasingly diversified their rapidly Bhutan diversified its migration pathways, destinations to high-income, English-speaking particularly for the tertiary educated migrants. countries like the USA, Australia, and Canada. Figures 1.1g & 1.1h highlight stark contrasts in These destinations accounted for less than 10% migration corridors between the two countries. of Bhutanese external migration in 2010 but In 2000, Bhutanese migrants primarily relocated surged to over 50% a decade later—a trend even to other South Asian countries, such as Nepal more pronounced among migrants with tertiary and India. In contrast, one in four Nepali migrants education. relocated to East Asia, the Pacific, or the Arab Figure 1.1g. Distribution of destination countries for Figure 1.1h. Distribution of destination countries for Bhutanese and Nepali migrants. Bhutanese and Nepali tertiary educated migrants. 2000 2010 2020 2000 2010 2020 100 100 80 80 60 60 40 40 20 20 0 0 BTN NPL BTN NPL BTN NPL BTN NPL BTN NPL BTN NPL South Asia (expcept IND) India South Asia (expcept IND) India Europe Arab States of the Gulf Europe Arab States of the Gulf USA East Asia & Pac. (except AUS) USA East Asia & Pac. (except AUS) Australia Other Australia Other Canada Canada Source: Global Bilateral Migration Matrix 2000-2020. World Bank Migration Database. MIGRATION DYNAMICS IN BHUTAN xv 1.2 Objectives of the Report · 700 households with at least one current migrant (referred to throughout the report as and Methodology “HHs with a migrant”). At the screening stage, the definition of a migrant for the purpose of To better understand the recent surge in external this study only includes those who migrated migration to Australia that began in early 2022 after 2022 and to select high-income, English- following the reopening of borders and accelerated speaking Western countries, such as Australia, thereafter, this report presents findings from Canada, the United States, and the United a rapid data collection exercise (phone survey) Kingdom. conducted in Bhutan in 2024. · 700 households with at least one member The primary objectives of the survey are to intending to migrate to Australia or other high- examine the profile of Bhutanese migrants and income Western countries for work or study how they differ from the broader working-age purposes within a one-year timeframe (referred population on key socio-economic demographics to throughout the report as “HHs with an and labor market outcomes while in Bhutan. aspiring migrant”). The survey also seeks to explore the underlying drivers of migration, with a particular focus on · 600 households with no members who are identifying the pull factors (positive aspects in migrants or aspire to migrate (referred to destination countries) and push factors (negative throughout the report as “non-migrant HHs”). aspects in Bhutan). The hypothesized push factors It is possible, however, for non-migrant HHs to include limited job opportunities in the private include in their composition migrants that fall sector, insufficient wages to sustain attainable outside the scope of this study (for example, standards of living, and dissatisfaction with a migrant who migrated before 2022 either working conditions in the public sector. In addition, internally or externally). the survey also examines the broader aspirations among Bhutanese youth to migrate, and whether Table 1 presents the sample size and response rate migrants and those who aspire to migrate intend for each of the three household categories. Despite to return to Bhutan in the future. extensive efforts, the survey successfully reached 465 HHs with a current migrant, corresponding to The phone survey, with an average duration of a response rate of 66.4%, and only 143 HHs with 30 minutes, was conducted from June 3 to July an aspiring migrant, corresponding to a response 17, 2024. The survey targeted 2,000 households rate of 23.8%. The overall response rate across all across all 20 districts, ensuring national three categories was 60.4%.10 The distribution of representation with a balance between rural and rural and urban households in the dataset mirrors urban areas. The sampling frame was based on the the national distribution. 59.9% of households 2022 Bhutan Living Standards Survey, provided reside in rural areas and 40.1% reside in urban by the National Statistics Bureau (NSB). At the areas. sampling stage, households were stratified into the following three groups, each with a predefined target sample size: 10 Due to a significant non-response rate in the pilot survey, the sampling strategy was adjusted to over-sample by 50% to achieve the desired sample size. Despite these efforts, out of the 7,067 households contacted, only 1,208 interviews were successfully completed. About 15% of the sampled households could not be reached because the phone numbers were either invalid or the calls were answered by someone who was not part of the target household (common in Bhutan, where old phone numbers are reassigned to new users). Even after four rounds of sampling, the survey was unable to reach the target number of interviews for Category A and B. xvi MIGRATION DYNAMICS IN BHUTAN Table 1. Sample size and response rate by household category. Household category No. of households No. of households Response rate Rural Urban targeted surveyed (%) (%) (%) HHs with a migrant 700 465 66.4 63 37 HHs with an aspiring migrant 600 143 23.8 56 44 Non-migrant HHs 600 600 100.0 58.5 41.5 Total 2,000 1,208 60.4 59.9 40.1 The questionnaire collected both household and individual-level data on a range of outcomes. 1.3 Limitations Across all three household categories, basic This report presents a preliminary approach to information was gathered on household understanding recent migration dynamics and characteristics and demographic profile of each trends in Bhutan. However, the approach is limited, member of the household, such as age, educational and findings should be cautiously interpreted qualification, and employment status. For HHs for various reasons. First, given that the survey with a migrant, the HH member with the most could not interview the migrants themselves, knowledge about the situation of the migrant was most responses were approximated by the asked to provide answers about the outcomes of household member. This proxy reporting led to the migrant in Bhutan and at destination country, incomplete information, particularly on wages as well as the primary purpose of migration.11 For and occupations in destination country, where HHs with an aspiring migrant, information was high item non-response was observed given that collected directly from the aspiring migrant to the member did not know the answer to those capture their aspirations and reasons to migrate. questions. Second, non-random attrition across For both categories, questions about reservation household categories, particularly for HHs with wages and willingness to return to Bhutan under an aspiring migrant (with a response rate of only certain conditions were also explored. For non- 23.8%), might have resulted in a self-selected migrant HHs, a working-age member was selected sample. This limits the extent to which results can to serve as a comparator to migrants and aspiring be generalized to the broader migrant and aspiring migrants to provide few more details about their migrant populations. Third, the overall sample size outcomes in Bhutan and aspirations for the future. of the survey is small, constraining the ability to Box A1 presents more details on the questionnaire. conduct detailed sub-group analyses and examine specific occupations and economic sectors most In households where there were multiple eligible impacted by the recent surge in external migration respondents for each category, a prioritization based on anecdotal evidence.12 Finally, access logic was applied to select a single respondent. to administrative data on exit records from the For example, for households with more than one Ministry of Home Affairs and attrition records migrant, priority was given to those migrants of key professionals from line ministries was not whose primary purpose for migration was paid employment. Among aspiring migrants, those in possible. Such administrative data would have their 30s were prioritized over other age groups. complemented survey findings and enabled a Similarly, for non-migrant households, a working- more precise quantification of the recent surge in age member was selected to respond to the migration since 2022, disaggregated by sectors questionnaire based on age prioritization. and occupation. 11 In 53% of the cases, the parent of the migrant answered the survey on their behalf. In 35% of the cases, the sibling (brother or sister) answered on their behalf. 12 For example, anecdotal evidence shows that the teaching sector in Bhutan has been particularly impacted by external migration. https://kuenselonline.com/teacher-attrition-continues-despite-interventions/. MIGRATION DYNAMICS IN BHUTAN xvii 1.4 Organization of the Report The remainder of the report is organized as follows. Section 2 presents findings on the profile of migrants and aspiring migrants. Section 3 discusses migrant outcomes at destination countries. Section 4 delves into the potential pull and push factors driving external migration. Section 5 explores the possibility of migrants returning to Bhutan. Section 6 concludes with policy implications and outlines areas for further research and follow-up. xviii MIGRATION DYNAMICS IN BHUTAN SECTION 2: PROFILE OF MIGRANTS AND ASPIRING MIGRANTS This section presents findings on the profile of a slight majority of migrants, accounting for migrants and aspiring migrants, as well as the 52.9%. 85% of migrants are married and 35% characteristics of households to which they belong. have children. The average age of a migrant is It compares the extent to which these groups 29 years. In contrast, aspiring migrants have a differ from one another, and where possible, slightly different profile than migrants. A majority compares them with the overall working-age of them are men (54.6% compared to 47.1% population and with non-migrant households and among migrants), and a considerable proportion individuals in the sample. Table A1 in the Annex of aspiring migrants has never been married (41.1% presents descriptive statistics on key individual compared to 13.8% of migrants). Consequently, and household-level outcomes from the dataset. only 23.7% of aspiring migrants have children. Aspiring migrants are also relatively less educated Migrants and aspiring migrants are mostly youth than migrants (23.5% hold a university education, and distinctly high-skilled. The majority hold jobs compared to 52.5% of migrants). In terms of in Bhutan as professionals or technicians and geographic distribution, households with a migrant associate professionals in key economic sectors, are more likely to be located in rural areas (63%), with earnings that are higher than the average compared to 56% for households with an aspiring Bhutanese worker. In addition, a significant share migrant. (Figure 2.1). of migrants were civil servants before migrating. The profile of both groups highlights concerns Figure 2.1a. Gender breakdown of migrants and aspiring migrants. among policymakers about a potential “brain drain” and possible disruptions to service delivery. Migrant Aspiring migrant 2.1 Migrants and aspiring 0.0% 50.0% 100.0% migrants share broadly similar Female profiles, except that aspiring Male migrants tend to be younger and relatively less educated. On demographics, migrants and aspiring migrants have distinct characteristics. Women constitute MIGRATION DYNAMICS IN BHUTAN 1 Figure 2.1b. Location of households with a migrant migrant or an aspiring migrant is the highest for and an aspiring migrant. young age groups and begins to decline sharply by the age of 30. Moreover, Figure 2.2b shows that, HH with an aspiring migrant holding other factors constant, having attained a HH with a migrant higher secondary education or above increases the likelihood of migrating or aspiring to migrate by 60 Rural 0.0% 50.0% 100.0% Urban to 75 percentage points. Both groups are also much younger and more A systematic comparison of migrants and aspiring educated than the overall working-age population migrants across all household13 and individual- in Bhutan. Figure 2.2c shows how the majority of level outcomes using a linear probability model migrants and aspiring migrants are in their 20s, estimated by ordinary least squares (OLS) shows whereas a significant share of the working age broad similarities between the two groups. There population is older than 45 years. In terms of are no statistically significant differences in educational attainment, only 7% of the working- gender composition and geographic location age population has a university degree, compared between migrants and aspiring migrants. However, to 53% of migrants and 24% of aspiring migrants the model confirms that aspiring migrants (Figure 2.2d). are younger than migrants, and relatively less educated (Table A2 in Annex). Other important correlates from the OLS model include gender. All else being equal, men are 8 percentage points more likely than women to 2.2 Both migrants and be migrants or aspiring migrants, even though women make up a higher share of current aspiring migrants are much migrants. In addition, being unemployed or inactive younger and more educated (as measured prior to departure for migrants) when compared to non- increases the probability of aspiring to migrate or having already decided to migrate by 10 migrants, but they are more percentage points. This suggests that personal likely to be unemployed. circumstances play a significant role in the decision to migrate (Table A3 in Annex) (Figure A comparison of the socioeconomic profiles of 2.2 b).14 It is worth noting that the unemployment migrants and aspiring migrants with those of rate among migrants and aspiring migrants in the non-migrants in the survey using a simple linear sample is 8% and 10%, respectively, which is higher probability model estimated by OLS (Table A3 in than the national average of 6%. the Annex) shows that both migrants and aspiring migrants tend to be younger and more educated than non-migrant respondents. As illustrated in Figure 2.2a, the predicted probability of being a 13 The OLS findings presented in Table A2 also confirm that there are no systematic differences between both groups in terms of the type of households they belong to. Some observed differences in household structure are mechanical. For example, migrant households are more likely to be monoparental (single-headed) households, primarily because in certain cases, the migrant, who was presumably the household head, had already left. 14 Some differences reported in Table A3 on household structure are similarly mechanical as noted in the previous footnote. For example, the finding that the head of household in migrant or aspiring migrant households is less likely to have attained secondary education as compared to the head in non-migrant households stems from the fact that, in many migrant households, a parent (either the mother or father) assumes the role of the household head in the absence of the migrant. In non-migrant households, 58% of non-migrant individuals selected for the survey noted that they are the household head. 2 MIGRATION DYNAMICS IN BHUTAN Figure 2.2a. Predicted probability for being a migrant Figure 2.2b. Marginal effect on the probability to be a or aspiring migrant, by age, all else equal. migrant or aspiring migrant. Female 0.000 .8 Male 0.082 No education 0.000 Probability of being a migrant or .7 Primary or lower 0.034 Lower secondary 0.104 Middle secondary 0.130 aspiring migrant .6 Higher secondary 0.586 Certificate/ Diploma 0.645 Bachelors 0.753 .5 Masters and above 0.608 Employed 0.000 .4 Unemployed 0.109 Inactive 0.108 Up to one occupation 0.000 .3 More than one occupation 0.101 15 20 25 30 35 40 45 50 55 0 .2 .4 .6 .8 Age Note: Results based on OLS regression results reported in Table A3 in Annex. N=1,198. Figure 2.2c. Age of migrants, aspiring migrants, the Figure 2.2d. Education breakdown of migrants, working-age population. aspiring migrants, the working-age population. Non- formal Education 15-19 Monastic Education 20-24 Masters and above Bachelors 25-29 Certificate/Diploma Age 30-34 Higher secondary 35-39 Middle secondary Lower secondary 40-44 Primary or lower 45+ No education 0 10 20 30 40 0% 10% 20% 30% 40% 50% 60% Percent Migrants Migrants Aspiring migrants Aspiring migrants Working age population Working age population Note: N=608. Source: age and education estimates for working age population is from the Bhutan Labor Force Survey (BLFS), 2022. MIGRATION DYNAMICS IN BHUTAN 3 On differences in households’ socio-economic be omitted from the reported household total status, there is no evidence from the OLS model income or inaccurately measured. Other findings to support the hypothesis that higher income from the survey reinforce this caveat because on households in the dataset have higher propensity other measures of economic wellbeing, households to migrate, a finding which contrasts with evidence with current or aspiring migrants are doing better. from other contexts (Clemens & Mendola, 2024). For example, both household types are more likely Figure 2.2e plots the distribution of monthly to have at least one employed person other than household income per capita and shows that the head or spouse. Figure 2.2f shows that 43.6% aspiring migrant households are only marginally and 23.4% of members within aspiring and migrant more concentrated in the upper end of the income households, respectively, hold a university degree, distribution. However, this finding should be compared to only 13% among members in non- interpreted with caution, as migrant income could migrant households. Figure 2.2e. Distribution of monthly household income Figure 2.2f. Education breakdown of members aged per capita. 15+, by household category. .00005 100% .00004 80% Density .00003 60% .00002 40% .00001 0 20% 0 10,000 20,000 30,000 40,000 50,000 Kernel= Epanechnikov, Bandwith= 6.0e+03. Monthly Household income 0% per capita winsorized at p=0.95. Calculated as total household income HH with HH with Non-migrant over the squareroot of the number of household members present. a migrant an aspiring migrant HH Migrants No education Primary or lower Aspiring migrants Lower secondary Middle secondary Non-migrants Higher secondary Certificate/Diploma Bachelors Masters and above Note: N=1,199. 2.3 Migrants in Bhutan the Annex). Similarly, a large proportion of aspiring migrants are employed as salaried workers (at were mostly working as 37%). In addition, both groups were concentrated civil servants in high-skilled in high-skilled occupations. Specifically, 65% of migrants worked as professionals and technicians occupations, and aspiring before migrating, and 52.6% of aspiring migrants migrants are similarly are currently working in these occupations in engaged in high-skilled, well Bhutan. In contrast, only 14.52% of the overall employed population in Bhutan is working in these remunerated occupations. sectors (Figure 2.3a). Before migrating, the majority of migrants were Both migrants and aspiring migrants are also employed as salaried workers (52%) (Table A1 in 4 MIGRATION DYNAMICS IN BHUTAN concentrated in key economic sectors. A quarter the private sector) (Figure 2.3c), both groups, on of migrants (25%) worked in the education sector average, earned higher wages in Bhutan compared prior to departure (Figure 2.3b), and a high share to individuals with no intention to migrate and (around 49%) were civil servants. While aspiring the average Bhutanese worker. As shown in Figure migrants are less likely than migrants to work in 2.3d, a higher share of migrants and aspiring the public sector (69.8% are currently employed in migrants earn monthly wages above Nu 10,000. Figure 2.3a. Occupation of migrants (while in Figure 2.3b. Employment of migrants (while in Bhutan), aspiring migrants, individuals with Bhutan), aspiring migrants, and individuals with no no intention to migrate, and average employed intention to migrate, by economic activity. Bhutanese. Others Education Shops (salespersons/ Elementary owners) Occupations Engineers/other scientists Plant and Machine Operators Accountants/ Finance Craft and Related Trade Workers Tourism/ Hotels Skilled Agricultural Framer Health Services and Sales Construction Worker Agriculture Clerical Support Worker IT (incl. engineers) Technicians and Associate Professionals Marketing Professionals Transport Managers Other 0 10 20 30 40 50 0 10 20 30 40 Migrants Migrants Aspiring migrants Aspiring migrants Non-migrants in the sample Non-migrants Average employed Bhutanese MIGRATION DYNAMICS IN BHUTAN 5 Figure 2.3c. Employment of migrants (while in Figure 2.3d. Wages for migrants (while in Bhutan), Bhutan), aspiring migrants, and individuals with no aspiring migrants, individuals with no intention to intentions to migrant, by sector. migrate, and average employed Bhutanese. Public (government, 6,000 state-owned or below enterprise) 6,001 Private - 10,000 10,001 Other non-profit -20,000 institutions 20,001 Cooperatives -30,000 30,001 Community service or -50,000 political party Above 0 20 40 60 80 50,000 0% 10% 20% 30% Migrants Aspiring migrants Non-migrants in the sample Migrant (before leaving) Aspiring migrant Non-migrants Average Bhutanese worker Notes: (1) Data on migrant wages prior to departure is only available in wage ranges. (2) For Figure 2.3b (resp. 2.3d), the migrant sample consists of 221 individuals (rep. 206), drawn from a total of 465 people, 281 of whom were working for pay prior to departure. The aspiring migrant sample includes 66 individuals (resp. 69), selected from a total of 143, with 71 currently working for pay in Bhutan. The non-migrant sample comprises 267 individuals (resp. 268), out of a total of 600, of whom 273 are currently working for pay in Bhutan. (3) Data on occupations and sectors does not allow for deeper disaggregation to clearly identify specific occupations, such as teachers, nurses, and doctors. For figure 2.3b, a grouping by economic activity was proposed based on frequency and type of responses. Data on the average employed Bhutanese is drawn from the 2022 Bhutan Labor Force Survey. 6 MIGRATION DYNAMICS IN BHUTAN SECTION 3. MIGRANT OUTCOMES AT DESTINATION This section presents findings on labor market 3.1 Australia is the most outcomes of migrants in destination countries. The data indicates that high-skilled youth from prominent corridor among Bhutan are predominantly migrating to Australia. high-skilled migrants, with Strong economic incentives underpin this trend, given that migrants earn substantially higher education cited as a primary incomes in Australia compared what they earn in motivation for migration. Bhutan, particularly for skilled female migrants. Pursuing educational opportunities is another Figure 3.1a shows that 81% of current migrants key motivation. However, there is evidence of moved to Australia, and 88% of aspiring migrants significant occupational downgrading among plan to migrate there. In contrast, only a small migrants in Australia. proportion of migrants have recently moved or plan to relocate to other high-income English- speaking countries, such as the United Kingdom, Canada, and the United States. Upon arrival in Australia, a high share of migrants works as salaried workers (33%), while a significant proportion balance both work and study (32%). In addition, 11% of migrants are studying, without engaging in paid employment. In total, 43% of current migrants are students (Figure 3.2b). When asked about their primary motivation to migrate, 64% of aspiring migrants cited education-related reasons, compared to 36% who plan to migrate for work. MIGRATION DYNAMICS IN BHUTAN 7 Figure 3.1 a. Destination countries among migrants Figure 3.1b. Labor market status of current migrants and aspiring migrants. at destination. Salaried/wage em- ployee Bhutan-UK Student who also worked/works Bhutan-USA Casual labor Bhutan-Others Bhutan-Canada Did/does not work (study, traning) Other 87.6% Bhutan-Australia 81.0% Self-employed/busi- 0% 40% 80% 120% ness owner Unpaid worker in the Aspiring migrant family business and/ Current migrant or farms 0% 10% 20% 30% 40% Survey questions on the field of study and education institutions at destination countries 3.2 A second motivation suffered from a very low response rate. In the case is the prospect of higher of field of certification or specialization of study earnings given that migrants for migrants, 54% of members did not know the answer, 20% reported that migrants were studying receive much higher wages business administration, following by medicine and in Australia than in Bhutan, nursing (6%), engineering and computer science especially for women. (at 4.8% each), and social and behavioral studies (3.9%). Similarly, knowledge about the educational Figure 3.2a shows that the distribution of wage institutions where migrants were enrolled was ranges for migrants between Bhutan and Australia limited. 70% of respondents did not know the does not overlap. While most migrants earned less name of the university. Among those who did, than Nu 40,000 monthly in Bhutan, most earn Nu Murdoch University and Edith Cowan University, 60,000 and above in Australia. In fact, over 40% of both located in Western Australia, were common migrants earn more than Nu 220,000. Figure 3.2b answers (at 12.6% and 8%, respectively). In terms further demonstrates that, conditional on having of financing sources to study, loans accounted for a job before and after migrating, all migrants the primary source of financing (53%), followed experience income gains following migration, with by personal savings (46%) and borrowing from none reporting a decline in earnings. informal sources such as family or friends (29.1%). 8 MIGRATION DYNAMICS IN BHUTAN Figure 3.2a. Monthly income of migrants in Bhutan Figure 3.2b. Difference in monthly income (Nu) and at destination. between destination and Bhutan. 40% 20% 30% 15% 20% 10% 10% 5% 0% 0% 100,000 115,000 120,000 125,000 132,000 140,000 155,000 165,000 172,000 180,000 195,000 205,000 212,000 3,000 8,000 15,000 25,000 40,000 60,000 100,000 140,000 180,000 220,000 35,000 40,000 45,000 52,000 60,000 75,000 80,000 85,000 92,000 Monthly Income (Nu) Sample of migrants who were working prior to their departure and are Sample of migrants who had a paid job before migration, and/or have a also working at destination, for which the information could be provided paid job upon migration. Primary occupation (N=70). This difference approximated using the average of declared ranges in time. Before leaving At destination Notes: (1) data on migrant wages is only available in wage ranges. (2) Figure 3.2a presents the sample of migrants who had a paid job before migrating and for which monthly income was available (N=206), and/or have a job upon migration (with a wage range, N=115). (3) Figure 3.2b presents the subsample of migrants who were working prior to their departure and are also working at destination, for which the information could be provided (N=70). (4) The difference in Figure 3.2b is approximated using the average of declared ranges in time. This income gain is particularly pronounced for against only 3.4% of migrant men). However, this female migrants, as the gender wage gap observed disparity largely disappears in Australia. Only 6.6% in Bhutan narrows considerably at destination. of women and 3.4% of men belong to the second Figures 3.2c&d show that, in Bhutan, female range (none in the first range - below Nu 40,000), migrants earned substantially less monthly and an equal share of women and men migrant, income than their male counterparts (11.8% of 55.6% and 53.5%, respectively, belong to the last migrant women belong to the first two ranges, and penultimate ranges. Figure 3.2c. Monthly income of female migrants in Figure 3.2d. Monthly income of male migrants in Bhutan and at destination. Bhutan and at destination. 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 3,000 8,000 15,000 25,000 40,000 60,000 100,000 140,000 180,000 220,000 3,000 8,000 15,000 25,000 40,000 60,000 100,000 140,000 180,000 220,000 Monthly Income (Nu) Monthly Income (Nu) Sample of female migrants who had a paid job before migration, and/or Sample of male migrants who had a paid job before migration, and/or have a paid job upon migration. Primary occupation have a paid job upon migration. Primary occupation Before leaving Before leaving At destination At destination Note: These two figures present the sample of migrants who had a paid job before migrating and for which monthly income was available (N=103 for women; 103 for men), and/or have a job upon migration with a wage range (N=63 for women and 52 for men). MIGRATION DYNAMICS IN BHUTAN 9 The prospect of earning higher wages at the raw wage premium they anticipate from destination countries is also a strong motivation migration can be substantial. Interestingly, even for aspiring migrants, however, they tend to with the high expected premium, aspiring migrants underestimate how much they will actually be under-estimate rather than over-estimate the able to earn. Figure 3.2e plots the distribution of wages they can likely earn abroad. This is evident wages aspiring migrants currently earn in Bhutan in Figure 3.2f, where the expected wage ranges of against wages they expect to earn at destination aspiring migrants are compared with actual wages and shows that they have much lower income than of current migrants. 15 what they expect to get at destination. Therefore, Figure 3.2e. Distribution of income in Bhutan for Figure 3.2f. Distribution of income for migrants aspiring migrants, what they expect at destination. and expected income for aspiring migrants at destination. .00003 40% .00002 Density 30% 20% .00001 10% 0 0% Less than 40,000 40,001 -80,000 80,001 -120,000 120,001 -160,000 160,001 -200,000 Above 200,00 0 10,000 20,000 30,000 40,000 Kernel= Epanechnikov, Bandwith= 46e+03. Monthly income (current- N= 62 and expected- N= 89) winsorized at p=0.97. Primary occupation Current Aspring migrant Expected Migrant Note: Figure 3.2e presents the sample of aspiring migrants with a monthly income in Bhutan (N=62) and/or expected monthly income at destination (N=89). Figure 3.2f presents the sample of aspiring migrants who declare an expected monthly income at destination (N=82) and the sample of working migrants for which a wage range at destination is available (N=115). 3.3 However, among migrants 3% work in such roles at destination. Furthermore, 22% of migrants work as casual labor at who work, there is significant destination, compared to only 4% while in Bhutan occupational downgrading in (Figure 3.1b and Table A1 in the Annex). Figure 3.3b provides a further breakdown of occupations Australia. held in Australia and shows that migrants almost universally experience occupational downgrading, Figure 3.3a shows the extent of occupational with six in ten working as low-skilled labor in the downgrading experienced by Bhutanese migrants. cleaning or care sectors. Elderly care emerges as Before migrating, only 1% of migrants worked in the most common occupation for migrants abroad. elementary occupations, compared to 27% at This pattern indicates that while Bhutan has a destination. Conversely, while 46% of migrants domestic labor supply capable of filling similar worked in professional occupations in Bhutan, only 15 The estimates on aspiring migrants’ expected wages should be cautiously used given that a certain number of aspiring migrants would presumably not follow through on their plans to migrate. 10 MIGRATION DYNAMICS IN BHUTAN care-sector roles, retaining these workers would once they complete their studies. Indeed, evidence require a significant pay increase to incentivize from other contexts demonstrate that over time, workers to remain in Bhutan and invest their skills migrants’ gains increase as they acquire human in the health sector. capital on and off the job, and as their skills and attributes align with the needs of the destination Given that a large share of migrants economy (Duleep 2015; World Bank 2023). simultaneously studies and works, the extent of downgrading may be temporary. It is plausible However, assessing this in the case of Bhutanese that migrants will transition to higher-skilled work migrants will be only possible with follow up data. Figure 3.3a. Occupations of migrant workers at home Figure 3.3b. Occupations of migrant workers at and destination (1-digit ISCO classification). destination. 100% Others Elementary 40% 90% Occupations 80% Plant and Machine Operators 30% 70% Craft and Related Trade Workers 20% 60% Skilled Agricultural Farmer 50% Services and Sales 10% Worker 40% Clerical Support 0% Worker Care (elderly/child) Cleaning Tourism (hotel/ restaurant/airport) Factory worker Sales Construction Transport Education Engineer Other 30% Technicians and Associate 20% Professionals Professionals 10% Managers 0% Before migration After migration The response rate was 78.1% Notes: (1) Both graphs present the sample of migrants who are working at destination and for which an occupation was declared. N=157. Out of 465 migrants, 255 are paid workers at destination, but only 201 report a primary work status, and 157 report a precise occupation. (2) For figure 3.3b, categories were grouped together based on most frequent key words used by respondents to describe occupations. MIGRATION DYNAMICS IN BHUTAN 11 SECTION 4. ROLE OF PUSH AND PULL FACTORS This section examines the interplay of Bhutan- 4.1 Migrants are attracted specific push factors and Australia-specific pull factors that have driven the recent surge in by the prospects of better external migration, drawing on data from the education opportunities, survey and other secondary sources high earning potential, and a Consistent with their observed outcomes in growing Bhutanese community Australia, positive aspects such as better in Australia. education and higher earnings seem to be the primary motivation for migration. Other pull When asked about their primary motivation factors specific to Australia include job shortages for migration, household members responding in low-skilled sectors, favorable visa regime on behalf of the migrant noted a strong role of that allows dependents of student migrants to pull factors, whereas push factors were not as work unlimited hours, affordable standards of prominent. For example, 49% of respondents cited living, and the presence of a growing Bhutanese better opportunities abroad as the main reason diaspora network. For aspiring migrants, while for migration. Among student migrants, 84% of the pull factors are similar, push factors such as respondents indicated that the perceived higher limited job opportunities in the private sector and quality of education abroad was a key driver, while dissatisfaction with domestic working conditions 52% pointed to the expectation of securing higher are key drivers. The COVID-19 pandemic further paying jobs after completing their studies. exacerbated many of these domestic market vulnerabilities, acting as a catalyst for the surge in migration that accelerated soon after the reopening of borders in 2022. 12 MIGRATION DYNAMICS IN BHUTAN Figure 4.1a. Distribution of current migrants by primary motivation to migrate. Friends or family or others they know migrated/ Peer pressure Push factor Perceive there to be nepotism in the private/ public sector Encountered incidence of corruption at their work place Did not enjoy living and working in Bhutan Better opportunities abroad Pull factor Lifestyles is better abroad Explore other cultures at work and Socially 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Figure 4.1b. Distribution of current migrant students by primary motivation to migrate. They did not have a suitable option to study their subject of interest with Bhutan Push factor Family or friends or others they know migrated/ Peer pressure Did not enjoy living in Bhutan They perceive the quality of education to be better abroad They perceive better opportunities abroad after studying, in Pull factor terms of getting jobs that will pay them better than jobs in Bhutan They perceive the lifestyle abroad to be better than in Bhutan They want to eventually work aboard, and studying there first was the easier way to go abroad 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% A closer examination of secondary sources reveals to have strengthened this pathway. Over the several potential pull factors specific to Australia years, several prominent members of the Royal that help explain the recent surge in migration. Government of Bhutan have earned graduate Among these are a favorable visa regime that degrees from Australian universities, and growing allows dependents of students to work unlimited partnerships between Australian universities and hours, relatively cheap tuition fees, and affordable Bhutanese institutions over the past two decades cost of living16. The presence of a growing may have further encouraged Bhutanese students Bhutanese diaspora community, particularly in to pursue education in Australia (Box 1). Perth, Western Australia, where a large share of Bhutanese has settled, further underscores the role Moreover, Bhutanese migrants appear to be of networks in facilitating migration. Indeed, a high filling labor shortages in select occupations in share of aspiring migrants reported knowing family Australia. Data from the Jobs and Skills Australia members and relatives already studying or working (Department of Employment and Workplace abroad, with only 16.8% of aspiring migrants Relations) (Table 2, below) highlights the reporting that they did not know anyone currently occupations that are experiencing job shortages abroad. In addition, longstanding academic in Western Australia, driven by low number of new linkages between Bhutan and Australia appear applicants. Several of these occupations align with 16 https://www.reuters.com/world/asia-pacific/bhutans-jobs-woes-drive-an-exodus-australia-2023-07-28/ MIGRATION DYNAMICS IN BHUTAN 13 sectors where Bhutanese migrants are currently working, such as age and disabled carers as well Box 1. Role of Networks in Increasing the as personal care workers. These shortages are Appeal of Australia to Bhutanese workers driven by an aging population, which is expected Historically, the movement to Australia began to reduce the labor force in the future and increase with human resource development aid for the demand for jobs in the care economy, as well Bhutanese civil servants in the late 1990s and as the demand for other low-skilled occupations early 2000s. Over time, Australia’s reputation as such as factory and construction workers. a leading destination for international education has grown, offering comparatively cheaper tuition Table 2. List of occupation shortages in Western fees than the U.S. or Europe. Additionally, several Australia due to retention gaps, 2024. prominent members of the Royal Government Occupation Skill of Bhutan have earned graduate degrees from Australian universities, which has helped Level strengthen diplomatic ties and further increased Hotel and Motel Managers 2 migration. The success stories of economic Mechanical Engineering Draftspersons and 2 prosperity and upward mobility in Australia continue to fuel the aspirations of many Technicians Bhutanese to migrate there. Evidence presented Metal Casting, Forging and Finishing Trades 3 in the report shows that external migration Workers to Australia began gaining momentum in the Sheetmetal Workers 3 early 2000s and experienced the second-fastest growth in migrant share between 2000 and Structural Steel and Welding Trades Workers 3 2020. Since 2013, the Bhutanese population in Bakers and Pastrycooks 3 Australia has more than tripled, reaching 27,810 Butchers and Smallgoods Makers 3 Bhutan-born residents by June 2023. Chefs 2 Moreover, Institutional partnerships between Cooks 3 Australian universities and Bhutanese Boat Builders and Shipwrights 3 institutions have been established over the past two decades, fostering academic collaboration Ambulance Officers and Paramedics 1,2 and exchange, which may have further increased Dental Hygienists, Technicians and Therapists 1,2 the appeal of Australian colleges for many Indigenous Health Workers 2 Bhutanese students. Notable partnerships include the Royal Institute of Management (RIM) Child Carers 3,4 with the University of Canberra (UC), and the Aged and Disabled Carers 4 Royal Thimphu College (RTC) with Edith Cowan University (ECU) and the University of New Nursing Support and Personal Care Workers 4 England (UNE). Industrial Spray Painters 4 Crane, Hoist and Lift Operators 4 Source: Canberra.edu.au. Railway Track Workers 4 Structural Steel Construction Workers 3,4 Meat Boners and Slicers, and Slaughterers 4 Source: Jobs and skills Australia. https://www.jobsandskills.gov. au/data/occupation-shortages-analysis/occupation-shortage- list?level=4. Note: Skill level is based on the ANZSCO skill level where 1 represents the highest skill level (requiring a higher level of education and experience) and level 5 represents the lowest skill level. Note: occupations that are in light blue are those where Bhutanese appear to be currently working based on Figure 3.3b. 14 MIGRATION DYNAMICS IN BHUTAN 4.2 For aspiring migrants, to Australia, however, they also assign high importance to push factors specific to Bhutan. while pull factors are Nearly half (49.5%) of aspiring migrants reported similar, push factors such that the absence of suitable options to study their field of interest in Bhutan. In addition, as unemployment and dissatisfaction with job quality, working dissatisfaction with working conditions, and earnings were also among the conditions play a big role, common reasons for their aspirations to migrate. The COVID-19 pandemic has exacerbated many of especially in the aftermath of these weaknesses, which likely explains the surge COVID-19 pandemic. in migration soon after the reopening of borders in 2022. Figure 4.2a shows that aspiring migrants cite similar pull factors why they aspire to migrate Figure 4.2a. Distribution of aspiring migrants by primary motivation to migrate. The migration policies- including visa - are favourable in destination country Perceive the lifestyle there to be better than in Bhutan Have family or friends in destination country or other nearby Pull factor countries abroad so i want to move closer to them (existing diaspora) Perceive there to be opportunities more suitable to me, in terms of types of work options Perceive the quality of education to be better abroad Expect to earn more in destination country than in Bhutan (higher earning potential) I have none to few opportunities or avenues to progress in my job No job security No job satisfaction; i feel like the work that i do here does not have an impact Push factor Poor quality of financial service in Bhutan- rigid system, difficulty in accessing financing, etc My earning are low There are no suitable options to study my subject of interest within Bhutan or there are no suitable jobs for me in Bhutan 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Push factors related to the lack of suitable job conditions further reflect the challenges in the opportunities for skilled and educated workers private sector. An assessment of job quality, are evident in the high unemployment rate for based on hours worked, reveals that overwork this cohort, as well as the mismatch between (working more than 48 hours a week) is prevalent, available vacancies in the private sector and affecting 63% of the workforce. Further, an the qualifications of job seekers (Figure 4.2b evaluation of employment quality through job & c). As noted earlier, being unemployed or benefits reveals that one out of three salaried inactive increases the probability of aspiring employees lacked a written contract from their migrants to migrate or having already migrated employer in 2017, accounting for over 11% of by 10 percentage points (Table A3 in the Annex). workers in Bhutan, with figures rising to 23% in Additionally, push factors linked to perceptions urban areas (Alaref et al., 2024). of low-quality jobs and unfavorable working MIGRATION DYNAMICS IN BHUTAN 15 Dissatisfaction with working conditions is not only which account for more than half of the entire limited to the private sector; it is also prevalent in civil service workforce, experienced the highest the public sector, as demonstrated by the record number of separations. In fact, more than 55% of number of voluntary resignations that rocked the all public sector resignations were concentrated sector since 2022.17 Although better remunerated in these two sectors.21 According to the nationally than private sector jobs18 and traditionally viewed representative service delivery indicator (SDI) as more attractive option for educated workers, survey in 2023, attrition rates in the health sector the civil service has experienced a significant reached 3.5% for medical doctors and 16% for exodus. In 2024 alone, 2,013 civil servants exited nurses. These trends have led to understaffing, the system, with 1,400 of these resignations increased workloads, and declining levels of job being voluntary.19 The underlying concerns appear satisfaction. Only 19% of doctors and 40% of to stem from limited opportunities for career nurses were satisfied with their work demands, progression, financial compensation, heavy while just 29% were satisfied with their financial workload, bureaucratic processes, and red tape.20 compensation. Compounding the issue, healthcare Moreover, certain push factors become more providers spend 25% of their time on non-patient apparent when examined through a sectoral lens. care activities such as administrative work and For example, the health and education sectors, general management (World Bank, 2024b). Figure 4.2b. Number of job seekers in Bhutan, by Figure 4.2c. Distribution of current employment and education, 2022. expected labor demand in Bhutan, by occupation, 2022. 12,000 Elementary occupations 10,000 Plant and machine operation and assembly Craft and related trades 8,000 Forestry 6,000 Services and sales 4,000 Clerical support Technician and 2,000 associate Professions Professional 0 None/ Primary Secondary Tertiary Monastic NFE Managerial 0 10 20 30 40 50 Men Women Share of total employment (%) Total Current composition Expected labor demand Source: Alaref et al., 2024, based on the BLFS 2022 and 2022 Establishment Survey. 17 https://kuenselonline.com/more-than-3400-civil-servants-resign-marking-transformation-in-bhutans-workforce/. 18 The raw hourly wage gap between the public sector (including SoEs) and private sector is 24% in favor of the public sector. However, using the Blinder-Oaxaca decomposition methodology, Alaref et al. (2024) demonstrate that the gap is fully explained when taking into account gender and age, but, even more important, education and occupations. When only comparing the wages of workers in private companies to those of workers in SoEs (where jobs are possibly the most comparable), the wage gap is much higher (38%). Half of the gap remains unexplained after taking into account age, gender, location, and education. 19 https://www.bbs.bt/224605/ 20 https://kuenselonline.com/why-are-civil-servants-resigning/ 21 https://www.bbs.bt/224605/ 16 MIGRATION DYNAMICS IN BHUTAN The prominent role of push factors among aspiring migrants underscores the urgency of policy action. While it is difficult to precisely estimate the extent to which aspirations will materialize into actual intention, evidence elsewhere suggests that people with a similar profile to those of aspiring migrants in the sample (i.e. those with higher observed determinants of earnings such as education) are much more likely to convert their external migration desire into migration plans, and to convert migration plans into costly preparation (Clemens & Mendola, 2024). MIGRATION DYNAMICS IN BHUTAN 17 SECTION 5. PROSPECTS OF MIGRANTS RETURNING TO BHUTAN AND ASPIRING MIGRANTS REMAINING IN BHUTAN This section explores the willingness among 5.1 Aspiring migrants’ migrants to return to Bhutan and willingness among aspiring migrants to reconsider their plans reservation wage is three in response to potential government reforms. In times higher than their particular, it explores whether improvements in domestic working conditions or increases in current monthly income in wages beyond a certain threshold could influence Bhutan, and around one-fourth decisions to either return or remain in Bhutan. of migrants would require the Findings indicate that both migrants and aspiring equivalent wage they earn in migrants appear willing to return or not migrate Australia or higher in order to if their wages in Bhutan were to improve beyond a certain threshold. While the minimum required consider returning to Bhutan. monthly income to return or not migrate (their Overall, there is a high willingness to return reservation wage) is, on average, lower than what to Bhutan among both migrants and aspiring migrants currently earn in Australia (or expect to migrants. 77.7% of aspiring migrants and 63.5% earn in case of aspiring migrants), it is difficult of members responding on behalf of migrants to attain given wage levels in the domestic labor expressed their intention to return to Bhutan. market. Moreover, the significant occupational A high share among both groups expressed downgrading experienced by migrants at willingness to return if there are decent job destination, which if it persists over the long run, opportunities and if the government implements may further reduce potential transfer of valuable reforms to improve policies and working know-how and skills back to Bhutan. conditions.22 When asked about their expectation on minimum wage to reconsider migrating and to remain in Bhutan, Figure 5.1a shows that while aspiring migrants do not expect to be fully compensated for their envisioned income loss, they expect their 22 For example, when asked whether they would reconsider migrating if the government implemented certain reforms, 55.7% of aspiring migrants said “yes” if there were decent jobs in Bhutan, 62.7% said they would if policies were improved, and 82.7% said “yes” if working conditions were also to improve. 18 MIGRATION DYNAMICS IN BHUTAN experience and skills to be recognized through Among migrants, the majority of respondents higher income than their current earnings. reported that they would need more income than When their minimum required income to not the income they were earning prior to leaving migrate is expressed as a fraction of expected Bhutan (Figure A7 in the Annex). When comparing income abroad, the majority would return with a reservation wages with average income ranges compensation rate below 1 (with an average ratio in Australia, migrants, on average, are willing to of 0.7) (Figure A5 in the Annex). However, when accept a lower income than what they currently their reservation wage is expressed as a fraction earn abroad (Figure 5.1b). However, around one- of current monthly income in Bhutan, the vast fourth indicated that they would need the same majority expect a compensation rate higher than wage at destination or higher to consider returning one (with an average ratio of 3). In other words, to Bhutan (Figure 5.1c). their minimum required income is three times more than their current earnings (Figure A6 in the Annex). Figure 5.1a. Distribution of current monthly income, expected income abroad, and minimum monthly required income to not migrate among aspiring migrants. .00003 .00002 Density .00001 0 0 10,000 20,000 30,000 40,000 Kernel: Epanechnikov; Bandwidth: 4.6e+03. Primary occupation. Winsorized at p=0.97 Current (N=69) Expected abroad (N=82) Minimum required income to reconsider migration (N=143) Notes: The sample of aspiring migrants reporting a current monthly income consists of N=69 individuals. The sample of aspiring migrants reporting an expected income abroad consists of N=82 individuals. The sample of aspiring migrants reporting a minimum monthly required income to not migrate consists of N = 143 individuals. MIGRATION DYNAMICS IN BHUTAN 19 Figure 5.1b. Distribution of monthly income at Figure 5.1c. Difference between minimum monthly destination and minimum monthly income required income required to return to Bhutan and monthly to return to Bhutan among migrants. income at destination among migrants. 50% 40% 20% 30% 15% 20% 10% 10% 5% 0% 0% Less than 40,000 40,001 -80,000 80,001 -120,000 120,001 -160,000 160,001 -200,000 Above 200,00 -200,000 -100,00 0 100,000 At destination Minimum required income to return Notes: (1) For Figures 5.1b and 5.1c, the sample only includes households for which information was available on wages at destination and on minimum required monthly income to return (N=89). (2) Results should be interpreted with caution given that the difference calculated in Figure 5.1c is approximated using the average of declared wage ranges. In addition, the data is likely noisy given that a household member is answering on behalf of the migrant. 5.2 The reservation wages of migrants and migrants to return. In 2022, the median monthly income for workers with at least both migrants and aspiring a completed secondary education (excluding family migrants will be difficult workers) was Nu 29,000. While 20% of aspiring migrants would accept a wage at or below this to achieve given the wage median, only 2% of migrants would do so, based structures in the domestic on estimates provided by their household member. labor market. Strikingly, a significant share of migrants and aspiring migrants expects wages far above the Figure 5.2a illustrates the distribution of monthly local wage structure. One in ten aspiring migrants wages earned by workers in Bhutan with at least and one in five migrants expect a monthly income a higher secondary education (excluding family exceeding Nu 100,000, which corresponds to the workers), based on data from the BLFS 2022, income level of the top 1% wage earners in Bhutan alongside the minimum required wages of aspiring in 2022. 20 MIGRATION DYNAMICS IN BHUTAN Figure 5.2a. Distribution of observed wages in Bhutan for individuals with a higher secondary education and above, together with minimum required monthly wages to return to Bhutan or remain in Bhutan for migrants and aspiring migrants. .00004 .00003 Density .00002 .00001 0 0 50,000 100,000 150,000 200,000 Kernel density plot. Epanechnikov, bw: 2.6e+03. Monthly income winsorized at 1% (BLFS) or 3% (Migration survey). Skilled workers in Bhutan Migrants Aspiring migrants Source: Wage data for the post-secondary educated workers is from the Bhutan Labor Force Survey (BLFS), 2022. Notes: The sample of skilled migrants reporting the minimum wage required to return to Bhutan consists of N = 361 individuals. The sample of skilled aspiring migrants reporting a declared income sufficient to remain in Bhutan consists of N = 106 individuals. Focusing on the six most common professions finance, the minimum required wage falls within a held by migrants before leaving Bhutan, Figure realistic range. In contrast, expected wages in the 5.2b compares the minimum monthly wages health sector are significantly higher than what migrants would accept to return (at the fifth is currently feasible, and those in the education percentile, average, and ninety-fifth percentile) sector, also appear somewhat unrealistic, though to the wages a worker in a similar profession to a lesser extent. Migrants’ ability to earn higher can expect at different experience levels while monthly income upon return maybe further remaining in Bhutan (experience as proxied by undermined by the occupational downgrading they age). On average, the reservation wages across experience at destination, which if it persists over all professions are consistently higher than the the long-run, could further limit their ability to earnings of experienced professionals in Bhutan. accumulate transferable on-the-job human capital However, expectations vary by profession. For upon their return to Bhutan. engineers and professionals in accounting and MIGRATION DYNAMICS IN BHUTAN 21 Figure 5.2b. Distribution of wages across age groups for the six most frequent professions of migrants prior to leaving Bhutan. Education Health 200,000 200,000 150,000 150,000 100,000 100,000 50,000 50,000 0 0 55-59 55-59 50-54 50-54 45-49 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 20-24 Tourism/Hotel Accountants/Fincance 400,000 150,000 300,000 100,000 200,000 50,000 100,000 0 0 55-59 55-59 50-54 50-54 45-49 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 20-24 Engineers Shops 100,000 200,000 80,000 150,000 60,000 100,000 40,000 50,000 20,000 0 0 55-59 55-59 50-54 50-54 45-49 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 20-24 Mean monthly wages(BLFS 2022) p5/p95 Mean minimum required monthly wage to return p5/p95 Source: Wage data is drawn from the Bhutan Labor Force Survey (BLFS), 2022. Notes: The 6 professions (N=133) represent 84.7% of all declared professions. The sample sizes range from N=12 (health, 7.6% of migrants with a declared profession) to N=50 (education, 31.8% of migrants with a declared profession). 22 MIGRATION DYNAMICS IN BHUTAN 5.3 Regardless of their return flow stabilized at USD 12.05 million as of October 2024. plans, not many migrants have taken their children and Remittances have played a critical role in enhancing household welfare in Bhutan. Survey families with them, and the respondents noted that the funds are primarily majority continue to send used for daily living expenses (43%), followed by remittances back to Bhutan. loan repayment by migrant (22.4%), and children’s education (7.9%). The Bhutan Poverty and Equity Figure 5.3a shows that very few migrants reported Assessment (2025) confirms that remittances taking their children or other family members significantly contribute to household consumption with them. In contrast, a relatively high share of and poverty reduction. In 2022, 11.3% of all aspiring migrants indicated plans to eventually households in Bhutan received remittances. This bring family members, though the share is low for financial support is particularly vital in rural areas, children as very few aspiring migrants are currently where 17% of households benefit from remittance married with children. However, it is difficult to inflows, compared to 3.4% in urban areas. However, determine the degree to which family migration there is a stark disparity in remittance inflows, might be prevalent or not given the possibility that with urban households, on average, receiving migrants will bring their families once they have three times higher than rural households. Without established themselves in the destination country. remittances, Bhutan’s poverty rate would be In addition, the share of migrants who have taken substantially higher, with an estimated 24,000 their families with them might be underestimated more people classified as poor (Bhutan Poverty in the survey, given that full household units who and Equity Assessment, 2025). migrated were not captured at the sampling stage Figure 5.3a. Share of migrants and aspiring migrants and thus were not available for interview. who have taken/plan on taking their children and extended family members. Given that families of many current migrants remain in Bhutan, 55.4% of members in migrant 60% households reported receiving remittances from 50% their migrant relatives, compared to 44.7% of all surveyed households. This share rises to 69.2% 40% when the migrant is either self-employed or a wage employee. Remittance is relatively high at 30% 55.4% for households with migrants employed as casual workers and 53.4% for those with student 20% migrants who are also working. However, the share drops sharply to 25% when the migrant 10% is unemployed. According to Business Bhutan23, Australia ranked among the top ten remittance- 0% sending countries to Bhutan in 2024, although the Current migrant Aspiring migrant volume of remittances has fluctuated considerably Have taken/ plan to take their children over the past few years. In August 2023, Have taken/ plan to take their other family members remittances from Australia were recorded at USD 1.87 million, dramatically surging to a peak of USD Note: this includes all individuals in the sample and is not 19.77 million by December 2023. The remittance conditional on having children. 23 https://businessbhutan.bt/remittances-from-australia-top-the-list/?utm_source=chatgpt.com MIGRATION DYNAMICS IN BHUTAN 23 SECTION 6. POLICY IMPLICATIONS AND AREAS FOR FUTURE RESEARCH Bhutan has achieved remarkable success in its migration corridors for its tertiary educated economic development over the past decade, migrants. In 2020, Australia emerged as the fourth marked by declining poverty and notable most popular destination for Bhutanese migrants improvements in human development indicators. and the second most preferred destination for Contrary to common assumptions, one of the those with a tertiary education, following the US. consequences of such economic progress is not The most dramatic shift occurred between 2020 a reduction but rather an increase in external and 2024, when annual migration to Australia migration. With rising incomes and increasing doubled from 12,424 in 2020 to 25,363 in 2024. levels of education and skills of populations, the This surge coincided with the reopening of borders likelihood of individuals seeking opportunities following the COVID-19 pandemic. abroad also grows. Shrestha (2023) documents the relationship between external migration and The sharp surge in migration to Australia, as this economic development, and shows that external report shows, is clearly driven by high returns at migration increases steadily with economic destination, mainly higher earnings and better development, peaking in middle-income countries educational opportunities. This trend is further (Figure A8 in the Annex). In addition, as countries reinforced by other structural transformations in advance economically, their migration patterns destination countries such as demographic shifts diversify, increasingly shifting towards high-income and growing labor shortages in select occupations. destinations. The profile of migrants also evolves, At the same time, the growing sentiment among with a growing share of highly educated individuals many skilled Bhutanese to migrate underscores among those leaving. This trend is driven by an the role of strong push factors within Bhutan, overall rise in the proportion of highly educated in which include limited job opportunities for the countries of origin and by the greater propensity of highly skilled in the private sector as well as this group to migrate. widespread dissatisfaction with working conditions in the public sector, particularly within select This interplay between economic development and sectors such as health and education. external migration is evident in Bhutan, where both internal and external migration have increased in Despite the welfare gains for migrants such as recent years. As shown earlier in the report, the higher earnings and accumulation of skills with composition of external migrants has also shifted more education, the rapid pace and growing scale notably, with the proportion of migrants with a of external migration in recent years, coupled with tertiary education increasing from 8.56% in 2000 the profile of migrants and aspiring migrants, who to 13.53% in 2020. Bhutan also began diversifying are higher skilled than the national working-age 24 MIGRATION DYNAMICS IN BHUTAN population, are understandably causing concerns ultimately convert their aspirations into actual among policymakers. Many migrants were migration plans. Among many aspiring migrants, previously employed in key sectors, such as health their reservation wages are unrealistic with the and education, and in a small country like Bhutan, domestic labor market, and pull factors specific to which already faces shortages in human resources, Australia may outweigh any additional incentives there are concerns that such scale of external offered by policymakers to convince them to migration would cause brain drain and disrupt stay and not migrate. However, there is probably essential service delivery, posing serious challenges a share of aspiring migrants who will respond to Bhutan’s long-term development prospects. positively to domestic labor market reforms and choose to remain in Bhutan. As noted in the The report proposes a three-pronged approach report, 20% of aspiring migrants would accept towards managing Bhutan’s external migration. a wage at or below the median of a wage for a First, targeted reforms are needed to retain local high skilled worker in Bhutan. This highlights the talent in the labor market, particularly among potential to retain a portion of local talent in aspiring migrants who would respond positively to Bhutan, both among aspiring migrants and among domestic reforms and among all skilled workers, all skilled workers, including returning migrants, including returnee migrants. However, external provided important reforms are implemented to migration can be managed but not stopped. address push factors behind youth’s aspirations to Findings show that reservation wages of both migrate. Key reforms include: migrants and aspiring migrants are unrealistic given the wage structures in the domestic labor i. Improving economic diversification in non- market. Furthermore, several pull factors that are hydropower sectors and creating a favorable specific to destination countries are beyond the business environment to generate more influence of policymakers. Therefore, the second and better jobs with competitive wage and third approaches are focused on leveraging structures that align with the aspirations and policy tools at the disposal of policymakers to qualifications of high-skilled workers.24 minimize external migration costs associated with brain drain and to maximize its benefits for ii. Enhancing public sector employment by Bhutan. reviewing governance and human resource management policies to improve job satisfaction with better working conditions 6.1 Implement domestic and improve worker retention. Some of reforms to create more these reforms may necessitate a sectoral lens depending on the key constraints. For and better jobs to retain example, in the health sector, the focus local talent among aspiring should be on retention strategies, through migrants and other skilled better compensation, clear career progression pathways, and reduced administrative workers, including returnee burdens by creating a new cadre of support migrants. staff to allow clinical staff to focus on core responsibilities. In the education sector, It is difficult to estimate, based on this report strategies should focus on enhancing school alone, the share of aspiring migrants who will infrastructure25 and strengthening teacher 24 The World Bank Country Economic Memorandum discusses in detail economy-wide and sector-specific policies as well as complementary institutional reforms that can lead to greater diversification. International payments for ecological services, high- value tradable services, eco-tourism, high-value IT services are identified as some of the sectors that can contribute to sustainable diversification of the Bhutanese economy (World Bank, 2024a). 25 According to a forthcoming Infrastructure Assessment Survey by the World Bank, both students and teachers reported MIGRATION DYNAMICS IN BHUTAN 25 development to enhance competence and Moreover, expanding the domestic supply of motivation.26 skilled workers through greater investment in education, training, and certification programs iii. Strengthening job intermediation and skills-job tailored towards essential occupations is critical matching to better match skilled professionals for mitigating the risks of brain drain. Such efforts with job opportunities that reflect their skills, increase the likelihood that a sufficient number qualifications, and earning potential. of high-skilled professionals will remain in the country, even if others migrate.27 Financing such In addition, policymakers can improve education expansion can be supported through international and training by expanding the fields of study and/or regional cooperation, particularly via labor available in Bhutanese educational institutions. migration partnerships with destination countries. While it is unlikely that Bhutan can compete One such example of migration partnerships is with high-income destination countries in terms the Global Skills Partnerships (GSPs) between of quality or breadth of tertiary education, the origin and destination countries. Under a GSP, intended objective of this policy is not to reduce the destination country finances the training of education-related migration, but rather to ensure potential migrants in the country of origin on that available opportunities in Bhutan are better globally transferable skills and occupations that aligned with the interests of youth and the are in short supply in both origin and destination evolving demands of the local labor market. countries. This model has the dual advantage of benefitting those who migrate by helping them secure jobs that match their skills, and those 6.2 Reduce the costs of who stay back, by enhancing the domestic talent pool. In addition, a GSP may help prevent the external migration occupational downgrading that many migrants currently experience by facilitating their placement Complementary measures to directly address in employment that suits their skills in destination concerns about brain drain among key countries. For these programs to be effective, professionals, particularly in critical sectors such however, they must be market-driven with as health, can include the introduction of minimum substantive involvement of the private sector service requirements imposed on migrants. For (Acosta et al., 2025). In practice, GSPs typically example, destination countries could require focus on midline skills, as higher-skilled sectors migrants to complete a minimum period of service such as medicine or engineering require longer as a condition for visa eligibility, negotiated under training periods and bigger investments. broader bilateral labor arrangements (World Other similar measures to manage workforce Bank, 2023). However, such measures should shortages include strengthening collaboration only be seen as complementary tools, and not as between Bhutanese and Australian educational substitutes for comprehensive reforms aimed at institutions to expand access to tertiary education making domestic labor markets more attractive to in critical high-skilled occupations in Bhutan. Many the targeted workers (World Bank, 2023; Clemens, Australian universities have established campuses 2015). inadequate heating/cooling systems, uncomfortable furniture, concerns regarding water sanitation and hygiene (WASH) and safety of the toilets, as well as limited availability and use of technology. 26 https://thebhutanese.bt/teachers-voice-out-solutions-to-address-attrition-in-bhutan/ 27 The Philippines offers a useful example in this regard, as the government has put in place programs to develop potential migrants’ skills in line with the demands in the global market, which at the same time, have positive spillovers for the domestic labor market because some graduates from these programs do not migrate. The Technical Skills and Development Authority (TESDA) trains more than 800,000 graduates a year. Education in selected occupations in high demand globally, such as nursing, has also been expanded (World Bank, 2023). 26 MIGRATION DYNAMICS IN BHUTAN in countries such as Malaysia and Singapore, 6.3 Maximize the benefits of often through partnership with local universities.28 Bhutan could explore similar collaborations to external migration to Bhutan facilitate the development of domestic capacity in priority sectors. As noted earlier, there has Building on international and empirical evidence, been a growing partnership between Australian external migration brings benefits to origin universities and Bhutanese academic institutions countries (World Bank, 2023). However, maximizing over the past two decades. Building on this its benefits to Bhutan will require effective foundation can yield mutual benefits. This interventions across the full migration cycle as collaboration could also address challenges such noted by Ahmed and Bossavie (2022) by making it as occupational downgrading, since qualifications safer, more productive, and less costly (Figure 6a). earned in Australian universities, even those Figure 6a highlights the four cycles associated with earned at overseas campuses, are recognized in the migration lifecycle. Australia. Figure 6a. Policy interventions across the full migration cycle. The four illustrative stages of the migration life cycle and common policy issues Predecision Departure During migration Postmigration Information on benefits of migra- Financial training, remittance Technical training, language train- facilitation, worker protection and Reintegration, labour market tion, process,costs,and systems reinsertion ing, legal counseling insurance Illustrative policy issues Source: Ahmed and Bossavie (2022). The first two cycles that relate to pre-decision migration choices and avoid unexpected financial and pre-departure are especially important for strain and indebtedness on themselves and Bhutan, given that a large share of migrants are their families. Furthermore, providing prospective students, and providing tailored financial guidance migrants with up-to-date information on job is critical to enable them to assess the costs and market in destination countries, including skills benefits of migrating. International evidence shows in demand, types of jobs available, and typical that aspiring migrants tend to overestimate their wages can help reduce instances of occupational potential savings at destination before departure downgrading in Australia. This will also ensure (Ahmed and Bossavie, 2022). In Bhutan’s context, that migrants secure productive employment that students may not fully understand the long- aligns with their skills, improving their long-term term financial implications of their decisions. economic mobility. To mitigate this, targeted interventions should focus on offering customized information and The third cycle—when the migrant is employed training on tuition costs, living expenses, and overseas—requires support from the migration debt management to help them make informed management system of both country of origin and 28 https://www.studiesinaustralia.com/Blog/about-australia/studying-an-australian-qualification-in-your-home- country#:~:text=Studying%20at%20an%20offshore%20campus%20*%20Charles,United%20Arab%20Emirates)%20*%20RMIT%20 University%20(Vietnam. MIGRATION DYNAMICS IN BHUTAN 27 destination country. Well-designed institutional significantly benefit Bhutan’s development, if frameworks, such as high-quality bilateral labor leveraged effectively. Currently, the Ministry agreements, can serve to reduce migration costs, of Industry, Commerce, and Employment strengthen worker protection in destination (MoICE) implements two key programs to countries, and enhance their welfare gains provide returnee migrants with information (Adhikari et al., 2025). However, these agreements upon return as well as career guidance and typically only apply to low and semi-skilled support for starting entrepreneurial ventures: the migrants and maybe less relevant in the context Reintegration Programme Desk29 and the Revive of Bhutan’s predominantly high-skilled migrant National Reintegration Program.30 Since both population in Australia. Nonetheless, support these programs are nascent, it is critical these mechanisms are essential, particularly for student initiatives are strengthened and scaled to identify migrants. For example, Bhutanese embassy staff returnees, provide efficient job intermediation can play a pivotal role in ensuring that student and matching support, and ensure that valuable migrants comply with visa conditions, not skills acquired abroad are productively absorbed exceeding permitted number of work hours per into the economy. Policy reforms should facilitate week. Drawing lessons from international best return migration and not hinder return migration. practices, the Philippines, for example, has set up Key policy measures could include recognizing the Philippines Overseas Labor Offices (POLOs) qualifications acquired abroad, ensuring smooth to offer direct support to overseas workers. These re-entry pathways into the civil service or other offices assist with labor protection, training, and sectors, and revisiting policies on dual citizenship. general support (World Bank, 2023). For example, a civil servant who exited public service to pursue higher education or professional In addition, given that Australia remains the experience in Australia should be able to return to dominant source of remittances from Bhutanese the civil service at a higher pay grade and career workers abroad, lowering the costs of remittance level, based on their upgraded skills and experience. transfers, promoting the use of formal financial channels among migrants, and improving financial Across all cycles of migration, maximizing the literacy among recipients in Bhutan are essential benefits of external migration for Bhutan hinges interventions. These measures can help harness on deliberate and targeted engagement with remittance inflows more effectively for sustainable the diaspora to create meaningful opportunities economic development and for maximizing for them to utilize the skills, knowledge and investments in children’s education, healthcare, network acquired abroad. In this respect, as housing, and entrepreneurial activities in Bhutan. Bhutan seeks to develop key domestic sectors, targeted policies and programs can help mobilize The fourth cycle includes return and reintegration diaspora expertise and resources to support of migrants in home country. While exact figures economic transformation. For example, countries of migrants, among those who left since 2022, such as Viet Nam and the Republic of Korea who would have returned are difficult to ascertain, have structured programs that actively involve anecdotal evidence suggests that some migrants their diasporas in formulating their economic are returning to Bhutan. This necessitates development plans (World Bank, 2023). appropriate policies to support the reintegration Additionally, specific initiatives to encourage of returnees in the domestic labor market. This diaspora to invest in or facilitate foreign direct is particularly critical for students and skilled investment in Bhutan could play a crucial role in workers returning with enhanced qualifications, leveraging migration for national development. new skills, and transferable expertise that could 29 https://www.bbs.bt/204371/ 30 https://www.moice.gov.bt/?p=268124 28 MIGRATION DYNAMICS IN BHUTAN 6.4 More follow up studies particularly for designing targeted labor market programs to support their reintegration into needed for evidence-based the domestic workforce. Fourth, conducting policy making rapid phone surveys on the same respondents over multiple time periods could provide useful This report presents an initial step in information on whether intention to migrate understanding the dynamics and drivers of materializes among aspiring migrants. external migration to Australia. However, important knowledge gaps remain, and more Finally, certain topics warrant deeper analysis evidence is needed to inform the design of a and sustained focus. The first is remittances, comprehensive set of policy options. which constitute a crucial component of Bhutan’s foreign exchange reserves and play an essential First, conducting sector-specific surveys in Bhutan, role in ensuring the country’s financial stability and particularly targeting occupations within the economic resilience. Findings in the report highlight civil service that seem to be most impacted by fluctuations in remittance flows from Australia, external migration, such as teachers, doctors, and and further research is needed to understand the nurses, is important to gain deeper insights into underlying factors that shape these trends. More the specific challenges confronting these sectors specifically, there is a need to assess the extent and craft reforms that align positively with to which remittance inflows can stabilize in the the aspirations of Bhutanese youth and skilled long-run, particularly once student migrants professionals. transition into full-time employment abroad, and to identify effective mechanisms to encourage Second, leveraging administrative or survey data use of formal transfer channels. The second area from Australian side on Bhutanese migrants and requiring evaluation is the likely effectiveness of their families would provide a more accurate and different government interventions to slow down nuanced understanding of their post-migration external migration. A flagship example is the outcomes. Such data would help answer key Gelephu Mindfulness City (GMC) project, which questions on whether student migrants are aims to transform the southern city of Gelephu successfully transitioning into higher-skilled into an economic hub by developing new industries, jobs after completing their studies in Australia. enhancing global connectivity through the Analyzing such data would also help document, development of an international airport to serve in greater details, the key policies that make as a gateway to South Asia, and boosting trade. Australian a popular destination country for One of the key goals of the GMC is to create Bhutanese migrants and their families. For employment opportunities to slow down external example, understanding policies on post-study migration and incentivize the return of Bhutanese work rights and pathways for residency for diaspora. students at the master’s level would shed light on pull factors that shape and influence migrants’ decision. Third, utilizing existing administrative data in Bhutan on external migration flows would allow policymakers to accurately quantify migration trends over recent years and design informed migration policies and management strategies. Linking this data with data on returnee migrants would inform evidence-based policy-making, MIGRATION DYNAMICS IN BHUTAN 29 REFERENCES Acosta, Pablo; Özden, Çağlar; Lebow, Jeremy; Rodriguez, Immigrants in the Labor Market. In The Immigrants, Limon; Dahlgren, Evelina. 2025. Global Skill edited by Barry R. Chiswick and Paul W. Miller, Partnerships for Migration: Preparing Tomorrow’s 105–82. Vol. 1A of Handbook of the Eco nomics of Workers for Home and Abroad.  Washington, DC: International Migration. Oxford, UK: Elsevier. World Bank. Kuensel, January 2023. https://kuenselonline.com/news/ Adhikari, Samik; Changom, Narcisse; Kaila, Heidi why-are-civil-servants-resigning. Kristiina; Shrestha, Maheshwor.2024. 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Infrastructure Assessment Migration from developing countries: Selection, Survey. income elasticity, and Simpson’s paradox. Journal of Development Economics 171:103359. Duleep, Harriet Orcutt. 2015. The Adjustment of 30 MIGRATION DYNAMICS IN BHUTAN ANNEX Figures Figure A1. Total number of external migrants 15+ by Figure A2. Distribution of migrants in 2020 by gender. destination country, for both men and women. 100,000 USA 80,000 Nepal 60,000 India 40,000 Australia 20,000 Canada 0 2000 2010 2020 0% 10% 20% 30% 40% 50% Men Men Women Women Source: Global Bilateral Migration Matrix 2000-2020. World Bank Migration Database. Figure A3. Share of men in total outward migration, Figure A4. Share of migrants with tertiary education 2000. in total outward migration, 2000. 80 40 60 30 Percent 40 20 20 10 0 0 BTN MDV LKA NPL AFG IND BGD PAK AFG NPL BGD BTN PAK LKA MDV IND Source: Global Bilateral Migration Matrix 2000-2020. World Bank Migration Database. MIGRATION DYNAMICS IN BHUTAN 31 Figure A5. Minimum monthly income for aspiring Figure A6. Minimum monthly income for aspiring migrants to reconsider not migrating expressed as a migrants to reconsider not migrating expressed as a fraction of expected income abroad. fraction of current monthly income in Bhutan. 1 .25 .8 .2 Density Density .6 .15 .4 .1 .2 .05 0 0 0 1 2 3 0 5 10 15 20 25 Note: Kernel: Epanechnikov; Bandwidth: 0.1788. Primary Note: Kernel = Epanechnikov; Bandwidth = 0.5772. Primary occupation. Monthly income winsorized at p = 0.97. N = 82 occupation. Monthly income winsorized at p=0.97. N=66 (aspiring migrants with a declared monthly income sufficient (aspiring migrants with a declared monthly income sufficient not to migrate and with an expected income abroad). not to migrate and an income in Bhutan). Figure A7. Distribution of monthly income while in Bhutan and minimum required income to return to Bhutan among migrants. 60% 40% 20% 0% Less than 6,000 6,001 - 10,000 10,001 - 20,000 20,001 - 30,000 30,001 - 50,000 Above 200,00 Before leaving Minimum required income to return to Bhutan Note: The sample of migrants reporting a declared income while in Bhutan consists of N = 206 individuals. The sample of migrants reporting the minimum wage required to return to Bhutan consists of N = 376 individuals. 32 MIGRATION DYNAMICS IN BHUTAN Figure A8. Relationship between external migration and economic development. Source: Shrestha (2023). MIGRATION DYNAMICS IN BHUTAN 33 Tables Table A1. Descriptive Statistics on Select Individual and Household-Level Outcomes Across Household Categories. Migrants Aspiring Non-migrants migrants Individual-level outcomes Male 0.47 0.55 0.38 Age (in years) 29.18 31.61 37.99 Married 0.85 0.57 na Has children 0.35 0.24 na No education 0.004 0.07 0.45 Primary or lower 0.006 0.05 0.10 Lower secondary 0.006 0.04 0.09 Middle secondary 0.03 0.07 0.16 Higher secondary 0.36 0.42 0.13 Certificate/ Diploma 0.06 0.11 0.02 Bachelors 0.53 0.24 0.05 Master’s and above 0.02 0.00 0.01 Labor market status (while in Bhutan for migrants) Unemployed 0.08 0.10 0.01 Inactive 0.15 0.19 0.19 Employed as salaried worker 0.52 0.37 0.27 Employed as a self-employed worker 0.05 0.07 0.15 Unpaid worker 0.04 0.16 0.34 Casual laborer 0.04 0.05 0.04 Student who also works 0.007 0.00 0.00 Having a second occupation in Bhutan 0.03 0.03 0.06 HHs with a HHs with an Non-migrant Migrant aspiring migrant HHs Household-level outcomes Household size 3.52 4.09 3.97 Mean age of members 37 32.6 30.8 No. of dependents 3.52 4.09 3.97 At least a child under 15 0.45 0.39 0.63 At least 1 elderly above 75 beyond head or spouse 0.07 0.06 0.08 Mean HH monthly income (BTN) 33,514 57,229 25,875 Rural HH 0.63 0.56 0.59 At least 1 employed beyond head or spouse 0.33 0.64 0.27 At least 1 unemployed beyond head or spouse 0.09 0.11 0.04 HH members 15+ wage employed 0.13 0.21 0.14 34 MIGRATION DYNAMICS IN BHUTAN HH members 15+ self employed 0.07 0.08 0.08 HH members 15+ with no education 0.15 0.02 0.12 HH members 15+ with middle secondary or below 0.20 0.26 0.42 (including primary and lower secondary) HH members 15+ with higher secondary or Bachelor’s 0.60 0.63 0.44 At least one member who is an internal migrant within 0.19 0.14 0.19 Bhutan Household structure Single 0.07 0.09 0.04 Couples 0.19 0.05 0.11 Nuclear w/children younger than 15 0.15 0.10 0.37 Monoparental 0.07 0.03 0.04 Extended (parents) 0.14 0.21 0.16 Nuclear w/children older than 15 0.10 0.10 0.06 Extended (all other) 0.27 0.41 0.21 Household head Age 50.94 45.95 44.16 Female headed HH 0.45 0.38 0.36 No education 0.51 0.41 0.50 Primary 0.13 0.10 0.11 Lower secondary 0.05 0.07 0.09 Middle secondary 0.08 0.06 0.12 Higher secondary 0.10 0.18 0.10 Certificate/ Diploma 0.04 0.06 0.02 Bachelors 0.08 0.11 0.05 Masters and above 0.02 0.01 0.01 Unemployed 0.006 0.000 0.003 Inactive 0.21 0.13 0.12 MIGRATION DYNAMICS IN BHUTAN 35 Table A2. Differences between households with migrants and with aspiring migrants (N=607). (1) (2) (3) (4) (5) =1 if Migrant, =1 if Migrant, =1 if Migrant, =1 if Migrant, =1 if Migrant, 0 if Aspiring 0 if Aspiring 0 if Aspiring 0 if Aspiring 0 if Aspiring Migrant Migrant Migrant Migrant Migrant Own Characteristics   Male (ref. female) -0.06 -0.04 -0.04 -0.04 -0.04 (0.03) (0.03) (0.03) (0.03) (0.03) Age 0.09 *** 0.08 *** 0.07 *** 0.07 *** 0.07*** (0.02) (0.02) (0.02) (0.02) (0.02) Age # Age -0.00 *** -0.00 *** -0.00 *** -0.00 *** -0.00*** (0.00) (0.00) (0.00) (0.00) (0.00) Primary or lower (ref. None) 0.11 0.03 -0.04 -0.03 -0.04 (0.18) (0.14) (0.15) (0.15) (0.15) Lower secondary 0.27 0.17 0.06 0.07 0.06 (0.21) (0.18) (0.19) (0.19) (0.19) Middle secondary 0.23 0.19 0.14 0.14 0.14 (0.18) (0.14) (0.16) (0.16) (0.16) Higher secondary 0.38 * 0.33 ** 0.32 * 0.32 * 0.32* (0.16) (0.12) (0.14) (0.14) (0.14) Certificate/ Diploma 0.24 0.23 0.22 0.22 0.22 (0.18) (0.14) (0.16) (0.16) (0.16) Bachelors 0.50 ** 0.43 *** 0.41 ** 0.41 ** 0.41** (0.16) (0.12) (0.14) (0.14) (0.14) Master’s and above 0.63 *** 0.63 *** 0.60 *** 0.60 *** 0.60*** (0.16) (0.12) (0.15) (0.15) (0.15) Unemployed (ref. Employed) -0.08 -0.07 -0.06 -0.07 -0.07 (0.07) (0.06) (0.07) (0.07) (0.07) Inactive 0.05 0.04 0.04 0.03 0.04 (0.05) (0.04) (0.04) (0.04) (0.04) Second Occupation in Bhutan 0.06 0.10 0.09 0.09 0.09 (0.11) (0.10) (0.09) (0.09) (0.09) Household Characteristics Couple (ref. Single) 0.23* 0.17 0.17 0.17 (0.09) (0.09) (0.09) (0.09) Nuclear w/child younger than 15 0.15 0.15 0.15 0.15 (0.14) (0.14) (0.14) (0.14) Nuclear w/children older than 15 0.35 ** 0.27 * 0.27 * 0.27* (0.12) (0.11) (0.11) (0.11) Monoparental 0.32 ** 0.29 ** 0.29 ** 0.29** 36 MIGRATION DYNAMICS IN BHUTAN (0.11) (0.11) (0.11) (0.11) Extended (parents) 0.07 0.01 0.01 0.01 (0.13) (0.13) (0.13) (0.13) Extended (all other) 0.11 0.05 0.05 0.05 (0.12) (0.12) (0.12) (0.12) Log of monthly HH income (per 0.00 0.01 0.01 0.01 cap) (0.01) (0.01) (0.01) (0.01) At least a child under 15 0.13 * 0.14 * 0.14 * 0.14* (0.06) (0.06) (0.06) (0.06) At least 1 elderly above 75 0.17 ** 0.21** 0.21** 0.21** beyond head or spouse (0.07) (0.07) (0.07) (0.07) N_household members -0.07 -0.07 -0.07 -0.07 (0.06) (0.06) (0.06) (0.06) N_dependents # N_dependents 0.00 0.00 0.00 0.00 (0.01) (0.01) (0.01) (0.01) At least 1 employed beyond head or spouse -0.10 * -0.11 * -0.11 * -0.11* (0.04) (0.04) (0.04) (0.04) At least 1 unemployed beyond head or spouse 0.00 -0.01 -0.01 -0.01 (0.06) (0.06) (0.06) (0.06) All HH members who work are wage employed -0.17 *** -0.10 * -0.10 * -0.10* (ref. All HH members who work are self- (0.05) (0.05) (0.05) (0.05) employed) Some HH members who work are wage employed, -0.17*** -0.15** -0.15** -0.15** some are self employed (0.05) (0.05) (0.05) (0.05) None are working -0.01 0.02 0.02 0.02 (0.05) (0.08) (0.08) (0.08) Rural HH -0.01 -0.02 -0.02 -0.02 (0.04) (0.04) (0.04) (0.04) At least 1 migrant within Bhutan 0.01 0.00 0.00 0.00 (0.04) (0.04) (0.04) (0.04) Household Head Female (ref. male) 0.02 0.02 0.02 (0.04) (0.04) (0.04) Age Head 0.01 *** 0.01 *** 0.01*** (0.00) (0.00) (0.00) Primary or lower (ref. none) 0.02 0.02 0.02 (0.05) (0.05) (0.05) Lower secondary -0.05 -0.05 -0.05 (0.07) (0.07) (0.07) MIGRATION DYNAMICS IN BHUTAN 37 Middle secondary 0.04 0.04 0.05 (0.06) (0.06) (0.06) Higher secondary -0.12 -0.12 -0.12 (0.07) (0.07) (0.07) Certificate/ Diploma -0.10 -0.10 -0.10 (0.08) (0.08) (0.08) Bachelors -0.13 -0.13 -0.13 (0.09) (0.09) (0.09) Masters and above 0.03 0.03 0.03 (0.09) (0.09) (0.10) Unemployed (ref. employed) 0.03 0.03 0.03 (0.07) (0.07) (0.07) Inactive -0.07 -0.07 -0.07 (0.06) (0.06) (0.06) Local Labor Market Youth Unemployment Rate (DZ) 0.00 (0.00) Unemployment rate 15+ (DZ) 0.00 (0.01) Ratio Youth/Overall U. 0.00 (0.01) Constant -0.94 ** -0.66 -0.76 * -0.78 * -0.77*   (0.36) (0.35) (0.34) (0.35) (0.35) Observations 607 607 602 602 602 Standard errors in parentheses Reference categories are female respondent, no education, employed, single household beyond migrant, living in a household where all members that are employed are independent, where the household head is a female, without education, and employed. * p < 0.10, ** p < 0.05, *** p < 0.01 38 MIGRATION DYNAMICS IN BHUTAN Table A3. Differences between households where there is an intention to migrate (realized or not) and households without an intention to migrate (N=1207). (1) (2) (3) (4) (5) =1 if Effective =1 if Effective =1 if Effective =1 if Effective =1 if Effective or Aspiring or Aspiring or Aspiring or Aspiring or Aspiring Migrant, 0 if Migrant, 0 if Migrant, 0 if Migrant, 0 if Migrant, 0 if non-migrant non-migrant non-migrant non-migrant non-migrant Own Characteristics Male (ref. female) 0.07** 0.07*** 0.08*** 0.08*** 0.08*** (0.02) (0.02) (0.02) (0.02) (0.02) Age -0.04 *** -0.03 *** -0.03 *** -0.03 *** -0.03*** (0.01) (0.01) (0.01) (0.01) (0.01) Age # Age 0.00 *** 0.00 ** 0.00 ** 0.00 ** 0.00** (0.00) (0.00) (0.00) (0.00) (0.00) Primary or lower (ref. None) 0.06 0.06 0.03 0.03 0.03 (0.05) (0.04) (0.04) (0.04) (0.04) Lower secondary 0.05 0.08 0.103* 0.10 0.104* (0.05) (0.05) (0.05) (0.05) (0.05) Middle secondary 0.09 * 0.11** 0.13 ** 0.13 ** 0.13** (0.04) (0.04) (0.05) (0.05) (0.05) Higher secondary 0.57 *** 0.55 *** 0.59 *** 0.59 *** 0.60*** (0.04) (0.04) (0.04) (0.04) (0.04) Certificate/ Diploma 0.60 *** 0.61 *** 0.64 *** 0.65 *** 0.65*** (0.07) (0.07) (0.06) (0.06) (0.06) Bachelors 0.77 *** 0.73 *** 0.75 *** 0.75 *** 0.75*** (0.03) (0.03) (0.04) (0.04) (0.04) Master’s and above 0.56 *** 0.56 *** 0.60 *** 0.60 *** 0.61*** (0.13) (0.13) (0.14) (0.14) (0.13) Unemployed (ref. 0.12** 0.11* 0.11* 0.11* 0.11* Employed) (0.04) (0.05) (0.05) (0.05) (0.05) Inactive 0.09 *** 0.11*** 0.10 *** 0.11*** 0.11*** (0.03) (0.03) (0.03) (0.03) (0.03) Second Occupation in 0.02 0.09 0.09 0.10 0.10 Bhutan (0.07) (0.07) (0.07) (0.07) (0.07) Household Characteristics Couple (ref. Single) 0.00 -0.02 -0.03 -0.03 (0.07) (0.07) (0.07) (0.07) Nuclear w/child under 15 -0.21 * -0.21 * -0.22 * -0.22* (0.09) (0.09) (0.09) (0.09) MIGRATION DYNAMICS IN BHUTAN 39 Nuclear w/children older 15 0.02 0.00 -0.01 -0.01 (0.09) (0.09) (0.09) (0.09) Monoparental 0.04 0.01 0.01 0.01 (0.09) (0.09) (0.09) (0.09) Extended (parents) -0.20 * -0.24 ** -0.24 ** -0.25** (0.09) (0.09) (0.09) (0.09) Extended (all other) -0.18 * -0.22 * -0.22 * -0.22* (0.09) (0.09) (0.09) (0.09) Log of monthly HH income 0.00 0.01 0.01 0.01 (per capita) (0.01) (0.01) (0.01) (0.01) At least a child under 15 0.01 0.03 0.03 0.03 (0.04) (0.04) (0.04) (0.04) At least 1 elderly above 75 beyond head or 0.05 0.09 * 0.08 * 0.08* spouse (0.04) (0.04) (0.04) (0.04) N_household members 0.04 0.04 0.04 0.04 (0.04) (0.04) (0.04) (0.04) N_ household members # 0.00 0.00 0.00 0.00 N_ household members (0.00) (0.00) (0.00) (0.00) At least 1 employed beyond head or spouse 0.10*** 0.08** 0.08* 0.08* (0.03) (0.03) (0.03) (0.03) At least 1 unemployed 0.07 0.07 0.07 0.08 beyond head or spouse (0.04) (0.05) (0.05) (0.05) All HH members who work are wage -0.08 ** -0.03 -0.03 -0.03 employed (ref. All HH members who work are (0.03) (0.03) (0.03) (0.03) self-employed) Some HH members who work are wage -0.08** -0.07* -0.07* -0.07* employed, some are self employed (0.03) (0.03) (0.03) (0.03) None are working 0.09 0.11 0.10 0.10 (0.05) (0.06) (0.06) (0.06) Rural HH 0.02 0.01 -0.01 -0.01 (0.03) (0.03) (0.03) (0.03) At least 1 member that is a migrant within 0.01 -0.01 -0.01 0.00 BTN (0.02) (0.02) (0.02) (0.02) Household Head Female (ref. male) 0.04 0.04 0.04 (0.02) (0.02) (0.02) AgeHead 0.00 *** 0.00 *** 0.00*** (0.00) (0.00) (0.00) 40 MIGRATION DYNAMICS IN BHUTAN Primary or lower (ref. none) 0.03 0.03 0.03 (0.03) (0.03) (0.03) Lower secondary -0.05 -0.05 -0.05 (0.04) (0.04) (0.04) Middle secondary -0.03 -0.03 -0.04 (0.04) (0.04) (0.04) Higher secondary -0.11 * -0.12 * -0.12* (0.05) (0.05) (0.05) Certificate/ Diploma -0.10 -0.10 -0.10 (0.08) (0.08) (0.08) Bachelors -0.16 * -0.16 * -0.16* (0.06) (0.06) (0.06) Masters and above -0.20 -0.21 -0.21 (0.15) (0.15) (0.14) Unemployed (ref. employed) -0.11 -0.13 -0.13 (0.12) (0.12) (0.12) Inactive -0.05 -0.05 -0.05 (0.04) (0.04) (0.03) Local Labor Market Youth Unemployment Rate (DZ) -0.00* (0.00) Unemployment rate 15+ (DZ) 0.01 (0.01) Ratio Youth/Overall U. -0.01 (0.01) Constant 0.77*** 0.67 *** 0.41* 0.49** 0.49**   (0.17) (0.18) (0.18) (0.18) (0.18) Observations 1,207 1,207 1,198 1,198 1,198 Standard errors in parentheses Ref. cat. is female respondent, no education, employed, single household beyond migrant, living in a household where all members that are working are independent, where the household head is a female, without education, and employed. MIGRATION DYNAMICS IN BHUTAN 41 Box A2. Survey Questionnaire Modules. The rapid phone survey consisted of two main modules that were answered by respondents. The first module collected questions that pertain to the household, such as location and monthly income, as well as to all members residing within each of the three household categories. Information was collected on gender, age, relationship to household head, highest education completed, and work status of each listed member. In addition, information on members who were not present because they either internally or externally migrated was also collected. The second module collected individual-level questions and was customized to each of the three household categories. For households with a current migrant who moved from 2022 onwards to Australia or other high- income English-speaking countries, the module collected information on the country and year of migration. It also collected information on migrant outcomes while in Bhutan and at destination country, such as work status, type of employment (sector, industry, and occupation), wages, and field of certification (or specialization of study). The module also included a variety of other questions to probe primary motivation for migration, financing sources of migration costs, as well as questions that relate to migrant’s marital status, number of children, whether the migrant has taken some of their household members with them abroad, and whether the migrant sends remittances back home. Finally, the module also asked about the migrant’s current willingness to return to Bhutan and the minimum required income that they would accept upon their return. For households with an aspiring migrant, the second module collected more detailed information on aspiring migrants’ socio-demographic profile, such as marital status, number of children, and work status in Bhutan. It also collected information on the nature of their migration aspirations, such as the country they aspire to migrate to, their timeframe for migration, their primary motivations to migrate, wages they expect to get abroad, occupations they expect to work in, as well as their study plans while abroad. The module also probed whether they knew someone currently abroad, their plans to take family members with them once they migrate, and whether they would reconsider their migration plans if their wages were raised beyond a certain threshold in Bhutan. For non-migrant households, the second module collected more details from one working-age member on their work status in Bhutan, including other details on whether they know someone currently abroad and on their aspirations for the future and the factors that contribute to their preferences to stay in Bhutan and not migrate. 42 MIGRATION DYNAMICS IN BHUTAN MIGRATION DYNAMICS IN BHUTAN 43