Asymmetric Information under the <i>Kafala</i> Sponsorship System: Impacts on Foreign Domestic Workers’ Income and Employment Status in the GCC Countries

Abstract

This paper examines the legal and policy implications of information asymmetry on foreign domestic workers employed under the Kafala sponsorship system in the Gulf Cooperation Council (GCC) countries. Drawing from ethnographic and field-based observations in large GCC migrant destinations—including Kuwait, Qatar, and the United Arab Emirates (UAE)—we investigate the flow of information and market uncertainties between five key stakeholders: labor-receiving government, labor-sending government, recruitment agencies (subagents), sponsors (employers), and social networks. Several factors contribute to asymmetric information: the lack of bilateral labor agreements and government policy coordination, programs between and among government entities, the absence of labor law for domestic workers, and the laissez faire approach of the labor-receiving government. These sources of asymmetric information do not only create serious market vulnerabilities for the domestic worker population, but often lead to loss of employment and early deportation. The concluding section further outlines various critical policy implications and potential areas of methodological research on GCC migration.