Migration is a longstanding and integral part of the MENA region’s economic and social fabric, with profound implications for labour markets and human capital development. Countries of origin face complex choices in managing both the drivers and consequences of emigration.

Migration is often viewed as a source of brain drain and a loss of human capital. Yet it can also ease pressure on domestic labour markets, provide income diversification through remittances and support investment in education – particularly when migrants return with enhanced skills and savings.

While migration offers opportunities, it also presents challenges, especially for countries that are traditionally labour exporters but now find themselves hosting growing migrant populations.

Human capital, labour markets and emigration

Labour market conditions in the MENA region are a central driver of emigration decisions. Evidence from the Egypt Labour Market Panel Survey 2023 (ELMPS, 2023) shows that 40% of current migrants were unemployed before migrating, while 43% were engaged in irregular employment. The lack of decent job opportunities remains a key push factor, particularly for young people. Emigration can therefore act as a ‘pressure valve’, helping to ease labour market pressure where job creation lags behind labour force growth.

At the same time, human capital plays a decisive role in shaping migration patterns. More educated individuals are more likely to migrate, and there is evidence that prospective migrants invest in their own education – a phenomenon often referred to as ‘brain gain.’ Remittances by overseas migrants are frequently channelled into educational investments of children and youth left behind.

While concerns over brain drain remain – especially when skilled migration is permanent – return migration can also help potentially to offset these losses. Research shows that returnees are more likely to engage in entrepreneurship, earn wage premiums and achieve greater upward occupational mobility compared with non-migrants. These benefits are especially pronounced among more educated returnees.

Thus, human capital and labour market dynamics are both causes and consequences of emigration.

Effects of displacement on host labour markets

Many MENA countries are increasingly becoming destinations, not just sources, of migration. For example, the Syrian conflict has displaced over six million people, many of whom have sought refuge in neighbouring countries.

Jordan, which hosts over a million Syrians, offers an instructive case. Contrary to common concerns, research (for example, Fallah et al, 2019) finds that the refugee influx has had limited negative effects on labour market outcomes in Jordan. There were no significant adverse impacts on employment, wages or hours worked among Jordanians.

This is due in part to the low labour market participation of Syrian women and children, the prevalence of informal work among refugees and the rise in overall demand for goods and services. In addition, international aid and European Union trade concessions under the Jordan Compact are likely to have cushioned potential negative effects.

While national-level impacts appear modest, the presence of refugees has influenced internal migration patterns of nationals. As Elmallakh and Wahba (2023) find, refugee camps and rising housing demand in host governorates have driven residential mobility among Jordanians, often due to increasing rents and strain on public services.

But these areas have also experienced a rise in job-related mobility and commuting, suggesting that economic opportunities remain attractive despite residential challenges. Importantly, the presence of refugees did not significantly alter Jordanians’ international migration or return migration trends.

But refugee impacts are not felt uniformly across all population groups. Economic migrants in Jordan, particularly low-skilled men in the informal sector, experienced reduced working hours and lower wages in areas with high refugee concentrations (Malaeb and Wahba, 2024). In other words, economic migrants were competing with refugees in the labour market. This underscores the need to monitor the broader labour market impacts of refugee inflows on vulnerable non-native groups as well as on nationals.

At the same time, mitigating these pressures requires proactive strategies that support refugee integration and reduce long-term strain on host communities. Successful refugee integration depends heavily on early and sustained investments, especially in education.

In Türkiye, large-scale teacher training programmes have led to lower absenteeism and better academic performance among refugee students (Tumen et al, forthcoming). Language training interventions have improved learning outcomes and mental health (Tumen et al, 2025), while ethnically mixed classrooms have fostered friendships and enhanced social cohesion (Boucher et al, 2021).

These findings highlight the importance of language proficiency and early intervention to ensure better integration of children and young refugees. In short, making the transition from short-term humanitarian relief to long-term development planning is essential to benefit both migrants and host communities.

Policy implications

Migration poses both challenges and opportunities for MENA countries. To harness the development potential of migration, strategies must aim to deliver mutual benefits for origin countries, host countries and migrants – a ‘win-win-win’ approach.

For origin countries, migration can ease labour market pressures and generate remittances and skills through return migration. For host countries, migration can fill labour shortages and stimulate economic demand. For migrants, it can improve employment, income and human capital outcomes.

Robust data is essential for effective policy-making. Yet many MENA countries lack reliable migration statistics, particularly on emigration, return migration and refugee integration. Strengthening data systems – through improved labour force surveys, administrative records and regional collaboration – is crucial for designing and evaluating targeted interventions. This also includes monitoring educational and labour market outcomes across the migration cycle.

Given the region’s large youth population, converting the demographic bulge into a demographic dividend is an urgent priority. Skill partnerships between sending and receiving countries, along with improved systems for recognising foreign qualifications, can enhance mobility while addressing underemployment. These efforts should be supported by training programmes aligned with labour market needs in both origin and destination countries.

Moreover, remittances serve as a crucial financial lifeline for many households but often fall short of their development potential. Reducing remittance costs – by fostering competition and adopting digital financial tools – can help to shift flows into formal channels. At the same time, exchange rate and financial sector policies must avoid creating disincentives for using official remittance systems.

Finally, host countries need sustained humanitarian and development support. Forced displacement places heavy burdens on public services and infrastructure. International donors must commit to long-term, predictable financing, and align humanitarian aid with development goals – particularly in sectors like education, health and housing.

In summary, a triple-win migration strategy requires better data, investment in return migration, skill partnerships, lower remittance costs and continued support for host countries.

Further reading

Boucher, V, S Tumen, M Vlassopoulos, J Wahba and Y Zenou (2021) ‘Ethnic mixing in early childhood: Evidence from a randomised field experiment and a structural model’, CEPR Discussion Paper No. 15528.

Elmallakh, N, and J Wahba (2023) ‘Syrian refugees and the migration dynamics of Jordanians: Moving in or moving out?’, Economic Development and Cultural Change 71: 1283-1330.

Fallah, B, C Krafft and J Wahba (2019) ‘Effects of Syrian influx on Jordanians’ labor market outcomes’, Journal of Development Economics 139: 203-16.

Malaeb, B, and J Wahba (2024) ‘Impact of refugees on male immigrants’ labor market outcomes in Jordan’, International Migration Review 58: 410-41.

Tumen, S, M Vlassopoulos and J Wahba (forthcoming) ‘Training teachers for diversity awareness’, Journal of Human Resources.  Tumen, S, M Vlassopoulos and J Wahba (2025) ‘The power of language: Educational and mental health impacts of language training for refugee children’, IZA Discussion Paper No. 17593.