Direct Monetary Costs and Its Determinants in Migration Decisions: Case of Cross-Border Labour Migration from Cambodia to Thailand

Migration cost is a critical factor of human labour mobility, and little is known about how much migrant workers would pay for their foreign jobs. Previous studies do not capture the effects of direct worker-paid migration costs on migration decisions; the endeavour to ensure a positive return on migration thus remains a puzzling and new frontier in labour migration research. The paper investigates the effect of the direct monetary costs on formal or informal migration decisions of Cambodian labour migrants to Thailand, using unique data from a 422-household survey in Cambodia. The survey also includes data from 17 registered recruiting agencies that enable us to construct the alternative specific conditional logit model with alternative migration cost-specifics. After controlling for the endogenous costs of moving using the Control Function method, we find that reducing the total cost of labour migration lowers the probability of choosing irregular migration by 15.8 percentage points. The choice of regular or irregular migration is also determined by other factors such as destination countries' immigration policies, such as deportation, length of stay, and income. The labour migration policies should be revisited by considering these factors to curb the high migration cost.