December 2015 Update on IOM Haiti Grant

Published: February 2016

Note: IOM staff reviewed this page prior to publication and prepared this response.

As part of our work on labor mobility, in July 2014 the Open Philanthropy Project made a grant to support a pilot project led by the International Organization for Migration (IOM) to give 100 Haitian workers access to H-2A visas for seasonal work in the United States. We granted a total of $1,490,504 in two tranches to support the project. In making the grant, we hoped that the project would result in a total of roughly $1M additional income for participants in the first year, as well as potentially laying the groundwork for larger flows of Haitians using H-2A visas in the future.

The project encountered a number of obstacles, and ultimately fell well short of this goal. Recruiting employers for the Haitian workers was more challenging than anticipated, though by June 2015 our understanding was that the project had received job orders for 95 workers. However, a variety of regulatory barriers in the U.S. and a number of workers’ visa applications being rejected by the U.S. Embassy in Haiti led to only 14 people being able to participate in the program, for an average duration of ~2 months. Accordingly, our current estimate is that the project led to only ~$53,000 of gross income for the participants.

We think there is a decent chance that the project simply encountered bad luck in 2015 and would have been more successful going forward. However, our best guess about the likelihood that any given number of Haitians will be able to participate in the H-2A program in the future has been marked down significantly in light of the barriers encountered by the project this year. Accordingly, we have decided not to renew our support for the project as currently constituted. Our understanding is that a small portion of the funding we granted remains unspent and will be returned within a couple months. (May 2016 note: $180,022 in unspent funds were returned to us.)

See IOM’s response to this update here.

Narrative of the project

We disbursed the first tranche of $450,655 at the start of the project, with the remaining funding conditional on the project leaders identifying U.S. employers willing to employ 100 Haitian workers, and on evidence that the Haitian workers would be able to obtain H-2A visas.

In December 2014, we decided to disburse the second tranche of $1,039,850, even though our first condition had not been met (our second condition appeared to have been met, since program staff told us that they did not anticipate structural problems with H-2A visa access). We believed that program staff were still likely to find 100 (or moderately fewer) job placements. In our December 2014 update, we wrote: “[the 100 job condition] has not been met, though program staff report confidence that at least 100 placements will eventually be found. IOM and PTP have identified a pipeline of 11 interested employers, with three of the employers who have expressed strong interest seeking a total of ~130 employees. […] we would still guess that the project is more likely than not to get 100 or more placements. (We would guess with more confidence that the program will be able to secure at least some smaller number of places.) While we would obviously prefer that the formal criteria had been met, our overall expected value for the number of placements made in 2015 remains near 100, though perhaps erring somewhat on the lower side (e.g. 80).”

In March 2015, we learned that the project still had not confirmed any job orders from U.S. employers, and that IOM and the U.S. Association for International Migration (USAIM), which collaborated with IOM on the project, were planning to increase outreach efforts to U.S. farmers over the next three months. In June 2015, we spoke with IOM and other organizations collaborating on the project and learned that employers had submitted 95 job orders to the U.S. government for approval:

  • Employer #1 (Pacific Northwest): 30 workers for four months
  • Employer #2 (Pacific Northwest): 45 workers for one and a half months
  • Employer #3 (Southeast): 16 workers for two five-month contracts
  • Employer #4 (Northeast): 4 workers for three months

We later received an update from IOM on the requests submitted to the U.S. government, with changes in job orders from Employer #1 and Employer #2. The net impact of these changes was losing four job orders, leaving 91 remaining:

  • Employer #1: 44 workers
  • Employer #2: 27 workers
  • Employer #3: 16 workers
  • Employer #4: 4 workers

More recently, we learned that Haitian H-2A visa holders would not be able to fill most of the job orders:

  • The U.S. Department of Labor questioned whether Employer #1 needed as many workers as it claimed since it was already late in the year, which led to delays and to Employer #1 canceling all 44 job orders.
  • The U.S. Embassy in Haiti declined all 27 workers interviewing for H-2A visas for Employer #2. Employer #2 found the majority of the workers it needed elsewhere, but reserved eight job orders for the program. IOM later presented eight alternates at the U.S. Embassy in Haiti to interview for the remaining jobs. Seven of IOM’s alternates eventually received H-2A visas and worked in the U.S. for four weeks.
  • Half of Employer #3’s job orders were actually for 2016, so only eight job orders were available for 2015. Seven Haitian workers received H-2A visas for Employer #3 and worked in the U.S. for twelve weeks.
  • Employer #4 was not able to comply with housing requirements, and dropped its request for four job offers.

In total, only fourteen workers were ultimately able to participate in the program. Assuming 40 hour work weeks and that they earned the legally mandated H-2A wages for the regions they were working in, they earned a total of ~$53,000. Note that that is not an appropriate estimate of the project’s immediate net humanitarian benefits, as it does not account for a number of significant factors that would suggest a lower estimate:

  • The counterfactual income for other potential holders of the jobs the Haitians ended up working (who would likely have annual incomes several times higher than the Haitian workers but still be quite low-income by American standards).
  • Any taxes or additional expenses that the workers might have incurred in the U.S.
  • Foregone wages in Haiti. Our understanding from Michael Clemens is that these are quite low, on the order of $10/week.

The main factor that we believe would point the other way would be the possibility that some of the workers may have worked more than 40 hours/week and received additional pay.

In a longer-term sense, we see the main benefit of the project as being the relationships that it developed with the employers who submitted job orders. The three largest employers that submitted job orders in 2015, two of which actually received Haitian workers, expressed interest in submitting a larger number of job orders for Haitian H-2A workers in 2016.

Our understanding is that a small portion of the funding we granted remains unspent and will be returned within a couple months. (May 2016 note: $180,022 in unspent funds were returned to us.)

Conclusions and lessons learned

At the end of the pilot project, we find that the program only produced a small fraction of the immediate benefits we anticipated. In our initial grant write up, we estimated that the project would produce around $1 million in total additional income for Haitian H-2A visa holders (around $10,000 in additional income for 100 workers over an average of six months). We now think that the program actually produced roughly $53,000 in gross income for the participants, and the additional income would be even less.

We made two significant mistakes that led us to overestimate the likely immediate benefits of this project. Although we noted in our December 2014 update that “as with all US visa applications, universal access cannot be guaranteed in advance and individual applicants may be rejected,” after learning about the rejection of 29 H-2A visa applicants, we now think that we underweighted this concern. We also significantly overestimated benefits per participant because we believed that they would work in the U.S. for an average of six months (rather than the eight weeks that they ended up averaging). This was primarily a straightforward mistake in assuming that workers would be able to stay six months, rather than the ~3 month average duration of request, and secondarily a result of unanticipated delays in getting visas.

However, we initially supported this project largely because of the possibility that it would have larger long-run benefits, not because of the potential immediate income benefits, and the immediate results do not foreclose the possibility that many more Haitians might be able to use the H-2A program in the future. We were heartened to hear that the three largest employers that submitted job orders in 2015 expressed interest in submitting a larger number of job orders for Haitian H-2A workers in 2016, and we see a decent chance that the project encountered bad luck in 2015 and would be more successful at turning job orders into visas going forward. However, our best guess about the likelihood that any given number of Haitians will be able to participate in the H-2A program in the future has been marked down significantly in light of the barriers encountered by the project this year. Accordingly, we have decided not to renew our support for the project as currently constituted.