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Optimal Design of Guest Worker Programs: An Introduction

A large number of countries around the world have adopted guest worker programs for low-skilled workers. These programs—also known as temporaryworker programs—include initiatives that have brought seasonal farmhands to the United States from Mexico, industrial laborers from Turkey to Germany, and construction workers from India to the United Arab Emirates. These programs are typically offered by relatively prosperous host countries seeking cheap, and usually low-skilled, labor from nationals of poor home countries. Although there are many differences between guest worker programs, most share a set of standard features.1 Most notably, the programs usually allow noncitizens to work in a host country for a fixed period of time without a definite path to citizenship or permanent immigrant status. In addition, guest workers are not given the full slate of political and economic rights that citizens and permanent immigrants enjoy. Nor do they benefit from the special international regimes that govern political refugees. Guest worker programs also normally tie workers to specific employers and require the noncitizen to work in preapproved industries. Workers participating in programs with these features are employed in an enormous range of industries—including construction, agriculture, manufacturing, and household service—and countries around the world. Host countries use these programs to meet demands for low-wage workers without having to make long-term commitments to the im-