Participating Pacific Island Nations in Temporary Overseas Work Schemes; Facing Labor Market Disruptions and Productivity Opportunity Cost

Abstract

Since 2007, Australia and New Zealand have employed workers on a temporary basis from a number of countries from the pacific. This has been widely suggested to provide a triple benefit to the workers, the receiving economy and their home economies. For the period that the workers are employed under the temporary schemes, they are extracted out of their home economies. This creates an opportunity cost to their home economies for the period they are contributing to the labor force overseas. This is suggested to have labor market implications not only in the short-term but could potentially have a long term impact on the aggregate output. This report provides a review of the opportunity cost of labor force participation that is lost by the participating economies within the pacific.