When the Border Closes: A Demand-Driven Spatial Model of Mass Return Migration in Cambodia

What happens when nearly one million migrant workers return home in a matter of months? How can labour markets absorb such a sudden influx, and what policies can help returning workers find decent employment?

In 2025, the abrupt closure of the Cambodia–Thailand border triggered the return of an estimated 820,000 to 950,000 Cambodian migrant workers, equivalent to nearly 10 per cent of the country's labour force. This unprecedented labour market shock placed considerable pressure on local economies, particularly in border provinces where formal employment opportunities were already limited.

Drawing on a new ILO working paper produced as part of the Global Accelerator on Jobs and Social Protection for Just Transitions’ technical support to Cambodia, with funding from the Government of the Republic of Korea, this seminar will examine how Cambodia's labour market has been affected by this mass return migration and what the findings reveal about the challenges of economic reintegration. Using a newly developed quantitative model calibrated to Cambodian labour market and economic data, the research explores how returning workers are absorbed into formal employment, informal sector employment and non-employment, and how barriers such as unrecognised skills, limited professional networks and geographic mismatches shape their opportunities.

The findings are striking. Model simulations suggest that more than 90 per cent of the labour supply shock is absorbed through informal sector employment and non-employment. They also reveal that returnees face additional barriers to formal employment that can generate significant welfare losses, even when aggregate employment figures show little change.

The seminar will discuss what these findings mean for policy, including the potential roles of skills recognition, employment services, mobility support, social protection and measures to stimulate labour demand. Beyond the Cambodian case, the research offers a new framework for understanding how economies can respond to sudden migration shocks and design more effective policies to support returning workers and their communities.