Research on the Effect of Social Networks on the Kuwait Labour Market Prepared by the International Organization for Migration (IOM) Joint Programme for the Support of the Public Authority for Manpower Kuwait City, Kuwait May 2016 1 Key Messages: Workers use a range of formal and informal networks that act as social capital for their mobili ty and work trajectory. While networks in home countries play a crucial role in facilitating workers’ move to destination countries, networks with fellow nationals and non- nationals developed during employment abroad are more important in determining their employment trajectories. Large communities of foreign workers in Kuwait (i.e. India) use social networks to sustain their exponential growth through leveraging non-demand driven employment opportunities while smaller communities of foreign workers’ (i.e. Nepal) numbers remain consistent as they tend to use formal recruitment channels to pursue formal demand driven employment opportunities . Institutional factors such as policies of sending and receiving countries may at times amplify the potential negative impact of social networks on labour markets in receiving states. The strength of social capital depends on and reflects not only on the numbers of foreign nationals in the receiving state workforce but also on the level of employment of the workers. Workers who have weaker social capital are likely to face exclusion in the labour market. Workers using social networks to obtain employment opportunities under Visa 20 (domestic workers) and Visa 18 (government projects) are often associated with illegal visa trading. Workers who use social networks to acquire jobs under Visa 18 (shoon) tend to have a mismatch between their skills and the requirement of the jobs. Public Authority for Manpower (PAM) in Kuwait, has limited control on remedying the negative effects of social networks on the Kuwait labour market in its current structure. 2 TABLE OF CONTENTS TABLE OF CONTENTS ..................................................................................................................................... 3 List of Boxes .................................................................................................................................................. 6 ABBREVIATIONS ............................................................................................................................................ 7 CHAPTER I. WHY A FOCUS ON SOCIAL NETWORKS OF WORKERS ................................................................ 8 A. Introduction ...................................................................................................................................... 8 B. Objectives of the research .............................................................................................................. 10 C. Research questions ......................................................................................................................... 10 D. Structure of the report .................................................................................................................... 11 E. Conceptual framework ................................................................................................................. 11 CHAPTER II: METHODOLOGY ...................................................................................................................... 12 A. Site selection and justification ........................................................................................................ 12 1. Study site and rationale for Nepal .............................................................................................. 12 2. Study site and rationale for India ................................................................................................ 13 B. Research methods .............................................................................................................................. 14 1. Data analysis ............................................................................................................................... 14 2. Ethical considerations ................................................................................................................. 15 C. Limitations of the study ...................................................................................................................... 15 CHAPTER III: STUDY FINDINGS .................................................................................................................... 15 A. Policies and regulations determining labour mobility of foreing workers in Kuwait ..................... 15 B. Defining social network impact on labour mobility to Kuwait ....................................................... 17 1. How social networks and intermediaries help temporary workers move to Kuwait ................. 17 SOCIAL NETWORK EFFECT FROM CORRIDORS SENDING SMALL VOLUMES OF WORKERS: CASE STUDY OF NEPAL .......................................................................................................................................................... 19 A. An overview of trends of contractual workers' mobility from Nepal to Kuwait ............................. 19 1. Profile of Nepali workers in Kuwait ............................................................................................ 20 2. Employment details .................................................................................................................... 22 3. Reasons of Nepali workers for choosing Kuwait as a destination for temporary work ............. 23 B. The Process Determining Labour Mobility to Kuwait and the Role of Intermediaries and Social Networks ................................................................................................................................................. 25 3 1. Role of intermediaries and social networks in labour mobility to Kuwait .................................. 25 2. Why Nepali workers prefer social networks over formal recruitment agencies? ...................... 26 3. Creating a pathway to Kuwait: Chain mobility and the role of intermediaries and social networks 28 C. Role of Social Networks in Job Placement ...................................................................................... 30 1. Obtaining a job ............................................................................................................................ 30 2. Role of social networks in the selection process ........................................................................ 33 4. Role of social networks in creating positions in labour market .................................................. 35 D. Utilizing Old or New Social Networks after Moving to Kuwait ....................................................... 36 1. Making new networks in Kuwait ................................................................................................. 36 E. Role of Social Network in Promotion, Salary Increases and other Incentives ................................ 40 F. Job Hopping and the Role of Social Networks in Kuwait ................................................................ 41 G. Analytical Conclusion: The Impact of Nepali Foreign Workers' Networks on the Kuwaiti Labour Market ..................................................................................................................................................... 42 1. Impact on creating chain mobility to Kuwait .............................................................................. 42 2. Impact on creation of positions .................................................................................................. 43 3. Impact on selection of workers .................................................................................................. 43 4. Other Impacts ............................................................................................................................. 44 SOCIAL NETWORK EFFECT FROM CORRIDORS SENDING LARGE VOLUME OF WORKERS: CASE STUDY OF INDIA ........................................................................................................................................................... 45 A. Indian Foreign Workers in Kuwait: An Overview ............................................................................ 45 B. Indian worker population in Kuwait ............................................................................................... 46 1. Profile of Indian workers in Kuwait ............................................................................................. 46 2. Job sector profile......................................................................................................................... 47 3. Employment details .................................................................................................................... 47 C. Labour Mobility: Policies and Regulations ...................................................................................... 48 1. Policies and regulations in India ................................................................................................. 48 2. Creation of Networks that Facilitate Movement of Workers to Kuwait ......................................... 49 D. The Process Determining Labour Mobility to Kuwait and the Role of Intermediaries and Social Networks ................................................................................................................................................