Migration,remittances and smallholder decision-making: Implications for land use and livelihood change in Central America

We model Central American migrant-sending household agricultural practices given labor losses and the concomitant infusion of remittances. Under the new economics of labor migration (NELM) framework, it is hypothesized that smallholder farm households invest remittance income in their land either to increase crop production or to transition to cattle ranching. We test this hypothesis by developing a combination of multivariate logistic, Poisson and beta regression techniques using Latin American Migration Project data to determine how agricultural land use change compared among migrant and non-migrant households in Costa Rica, El Salvador, Guatemala, and Nicaragua. Results indicate that a rise in months spent abroad and remittances returned do not translate into a higher percentage of farm sales, intensification or transition to cattle ranching – counter to NELM. However, farmers are investing remittances to increase row crop and pasture land holdings. These findings suggest remittance investments in quantitative increase rather than qualitative change in land use practices. Given the expansive land demands supporting low intensity smallholder agriculture and cattle, and the land degradation cattle precipitate particularly, the trend does not augur well for the sustainability of rural landscapes increasingly transformed by international remittances. Appropriate policies to champion coupled human-land system sustainability in Central America might usefully consider viable land use alternatives to remittance investments dedicated to crop and pasture expansion.     

Labour Migration as a Social Security Mechanism for Smallholder Households in Sub-Saharan Africa: The Case of Cameroon

Labour migration is traditionally considered to be a way of protecting household members at the migrant's place of origin from economic pitfalls by receipt of remittances. More recently, young urban migrants from rural regions have been observed to neglect their traditional obligations to support their elderly parents, especially if they do not intend to return to their native village, do not expect any sizeable inheritance and have no reciprocal insurance commitment with their parents. Under such circumstances, rural people are exposed to the risk of staying without support in times of economic crises or during their old age. This paper analyses the potential of migration with remittance strategies in stabilizing the income of rural households. The analytical results are based on a microeconomic survey from Cameroon in 1991/92. A Probit model is applied to analyse access to remittances and a Tobit model to look into their extent. A major result of this analysis is that migration with remittance strategies fails as a social security mechanism when the potential remitter does not expect any sizeable inheritance.     

Do Migrants Insure Those who Stay Behind? Evidence from the Kayes Area (Western Mali)

This article uses recent household survey data from the Kayes area (western Mali) to analyse the determinants of remittances from both internal and international migration. The underlying assumption is that remittances are part of an insurance contract between the migrant and his family. Although this idea is not new, few tests have appeared in the recent literature. After a discussion of various measures of crop income shocks, we employ Powell's censored least absolute deviation (CLAD) estimators in addition to more standard parametric estimators to assess the influence of shocks on remittance behaviour. In contrast to Heckman's two-step or the Tobit estimator, Powell's estimator is consistent in the presence of heteroscedasticity and is robust to violations of the normality assumption for the residuals. Regression results bring some support for the view that insurance is an important motivation for remittances. This welfare function should be taken into account by policy-makers in the design of migration policies.     

Migrant remittances and financial inclusion among households in Nigeria

This article investigates the impact of remittances on financial inclusion, using the 2009 World Bank’s Migration and Remittances Household Survey data for Nigeria. An instrumental variable estimation technique was used to estimate the impact of remittances on financial inclusion, and migrant network effect was used as an instrument to control for potential endogeneity between remittance and financial inclusion. This article finds that the receipt of remittances increases the probability of using formal financial services, such as deposit accounts and Internet/mobile banking. This article concludes that reducing barriers and costs to remittance inflows can improve the access to and use of formal financial services in Nigeria, which can lead to an increase in funds for investments and the economic growth of the country.     

Consequences of out-migration for land use in rural Ecuador

In rural Ecuador and elsewhere in Latin America, the departure of migrants and the receipt of migrant remittances have led to declining rural populations and increasing cash incomes. It is commonly assumed that these processes will lead to agricultural abandonment and the regrowth of native vegetation, thus undermining traditional livelihoods and providing a boon for biodiversity conservation. However, an increasing number of household-level studies have found mixed and complex effects of out-migration and remittances on agriculture. We advance this literature by using household survey data and satellite imagery from three study areas in rural Ecuador to investigate the effects of migration and remittances on agricultural land use. Multivariate methods are used to disaggregate the effects of migration and remittances, to account for other influences on land use and to correct for the potential endogeneity of migration and remittances. Contrary to common assumptions but consistent with previous studies, we find that migrant departure has a positive effect on agricultural activities that is offset by migrant remittances. These results suggest that rural out-migration alone is not likely to lead to a forest transition in the study areas.     

Does female human capital formation matter for the income effect of remittances? Evidence from developing countries

The existing literature has focussed extensively on the development outcomes resulting from international migrant remittances. Yet, the human capital channel promoting remittance effectiveness has received little attention. Given the multilateral policy drive to promote female literacy in recent decades, it is relevant to examine whether female human capital formation improves the effectiveness of remittances in terms of its impact on per capita income. Using a panel of 103 developing economies over the period 1970–2012, this paper attempts to answer this question empirically. The paper finds that female human capital affects the remittance-growth relationship differently according to whether it is the primary, secondary or tertiary level of human capital. Our estimates of the marginal impacts of remittances show that while higher levels of skilled human capital (secondary and tertiary enrolments) enhance the marginal impact of remittances on per capita income, low-skilled human capital (primary enrolments) fails to do so. Our conclusion stresses the need to encourage female human capital beyond the promotion of literacy rates in developing countries.     

Who Remits More? Who Remits Less? Evidence from Kosovar Migrants in Germany and Their Households of Origin

The prevalence of subsistence-oriented farming and the scarcity of non-farm employment make migration a common livelihood strategy in rural Kosovo. Consequently, many households rely heavily on remittances. Although migrants themselves often struggle to finance their everyday lives in their host countries, remittances continue to flow. As almost all migrants remit, it is required that the level of remittances be monitored and the factors determining the absolute amount of remittances to the home country be known. There are three overarching determinants: the connection between the migrant and the household of origin, the need for financial support of the household of origin and the financial means of the migrant. This contribution draws on an original, detailed and very recent database collected using an innovative survey design. It provides significant insights into the country- and culture-specific driving forces behind remittances from Germany to Kosovo.     

Assessing the Effects of Hazards and Interventions on Farm Household Liquidity in Sudan - A Preliminary Accounting Model

The informed assessment of the effects of hazards on farm households and the design of appropriate interventions requires a knowledge of the pattern of household cash and asset stocks and flows. This paper uses the example of a poor farm household in Kordofan, Sudan to build a debt/savings model and then study the effects of environmental “shocks” and different forms of interventions. The results suggest that, in the absence of external injection in the form of technological improvement or worker remittances, over the period 1988–1992, households would have descended into a debt spiral, even with formal credit. With income improvements solvency would have only been ensured if formal credit had been available. Although more work needs to be done to increase the validity of such “accounting” models of farm household liquidity, this study has established a methodology which can be improved upon and applied elsewhere.     

Do remittances support consumption during crisis? Evidence from Kosovo

This paper focuses on the effect of remittances on per capita consumption over time in a context of conflict, war-to-peace transition and crisis. We use two household surveys from Kosovo with unique timing, one collected immediately after the civil war in 2000 and the other during the economic crisis in 2010. This territory, in which the tension among ethnic groups is the focus of international concern, is one of the top remittance-receiving countries in the world. We examine the effect of remittances not only at the average level of consumption, but also at various parts of the distribution of consumption using quantile regressions. We find that remittances alleviate poverty by enhancing the consumption level of the most vulnerable households, and the positive effect of remittances on consumption has remained constant between 2000 and 2010. This result may be connected with the resilience of remittances.     

Off-farm labour allocation decisions in small-scale rural households in Zimbabwe

The double hurdle model is used to analyse the off‐farm labour decisions of small‐scale agricultural household members in the Shamva District of Zimbabwe. The approach permits the joint modelling of the decision to participate in the labour market and the decision regarding the amount of time allocated to work. Results indicate that a number of variables (notably, gender, education and assets) indeed have effects which are qualitatively and quantitatively different in terms of participation and hours worked. Overall, the empirical analysis confirms the importance of individual characteristics (such as gender and education) and household/farm characteristics (e.g. land area accessible to the household, productive assets, remittances and the agricultural terms of trade) in influencing the labour market decisions of rural household members.     

Labor force participation of women left behind in Tajikistan

This paper examines the impact of male migration on the labor force participation of the women left behind in Tajikistan. Studies from many countries show that when men migrate, female labor force participation decreases and this is largely explained by the income effect from remittances. Our study challenges this finding. Using panel data from 2007, 2009 and 2011, we find that, in Tajikistan, migration has no significant effect on the number of hours that women work. We use panel data which allow us to control for unobservable heterogeneity, rather than the cross-sectional data used by others. We analyze several countervailing factors that may have neutralized the income effect, such as the need to substitute for the missing labor in the household. We also find that women work more when the household has a farm, regardless of the presence of a migrant in the household.     

Horticulture,livelihoods, and urban transition in Africa: evidence from South‐West Cameroon

This article documents change in periurban horticulture using repeat surveys in 1995 and 2004 of about 300 households around Muea, Cameroon. Real household incomes increased by 14%, with a large shift from farm to nonfarm income. Within agriculture, activity shifted from staple crops to horticulture, both for sale and in home consumption. In 1995, there were large remittances from farmers involved in periurban horticulture to their village of origin; in 2004 remittances continued and horticultural farmers were also heavily involved in informal financial associations. Periurban horticulture is disproportionately practiced by women and older workers, and plays an important and growing role in African livelihoods.     

The impact of migration on rural poverty and inequality: a case study in China

Large numbers of agricultural labor moved from the countryside to cities after the economic reforms in China. Migration and remittances play an important role in transforming the structure of rural household income. This article examines the impact of rural‐to‐urban migration on rural poverty and inequality in a mountainous area of Hubei province using the data of a 2002 household survey. Since migration income is a potential substitute for farm income, we present counterfactual scenarios of what rural income, poverty, and inequality would have been in the absence of migration. Our results show that, by providing alternatives to households with lower marginal labor productivity in agriculture, migration leads to an increase in rural income. In contrast to many studies that suggest that the increasing share of nonfarm income in total income widens inequality, this article offers support for the hypothesis that migration tends to have egalitarian effects on rural income for three reasons: (1) migration is rational self‐selection—farmers with higher expected return in agricultural activities and/or in local nonfarm activities choose to remain in the countryside while those with higher expected return in urban nonfarm sectors migrate; (2) households facing binding constraints of land supply are more likely to migrate; (3) poorer households benefit disproportionately from migration.     

Disability and household economic wellbeing: evidence from Indonesian longitudinal data

A health shock in general, and a disability in particular, may expose households to material insecurity due to out-of-pocket health expenditures and reduced earnings. Studies on the impact of disability on household welfare in developing countries are scarce, although the expected impact is large given the absence of social protection programmes. Using a unique Indonesian longitudinal dataset with individuals followed over a 17-year period, this study analyses the economic impact and coping mechanisms adopted by households following a physical disability. Fixed effects estimations reveal that households experience rising health expenditures and reduced labour income. Households cope by reducing their food, non-food and education expenditures, selling assets and receiving more remittances. While all household groups are affected by disability, only the poorest households become significantly more likely to cut their food expenditures.     

Mobile money,agricultural marketing,and off‐farm income in Uganda

Mobile money (MM) services can contribute to welfare gains in smallholder farm households. Previous research showed that one important pathway for these MM‐related welfare gains is through higher remittances received from relatives and friends. Here, the role of other impact pathways is examined, especially focusing on agricultural marketing and off‐farm economic activities. The analysis builds on panel data from smallholder coffee farmers in Uganda. Regression models show that the adoption of MM technology has contributed to higher household incomes and consumption levels. Off‐farm income gains are identified to be an important pathway, also beyond remittances. Typical off‐farm income sources are small businesses in trade, transport, and handicrafts, which benefit from novel savings and money transfer opportunities through MM. In terms of agricultural marketing, MM users sell a larger proportion of their coffee as shelled beans to buyers in high‐value markets, instead of selling to local traders immediately after harvest. MM services help to reduce cash constraints and facilitate transactions with buyers from outside local regions. In conclusion, MM can contribute to rural development through various important pathways. Analysis of adoption patterns suggests that MM services are socially inclusive.     

Getting stuck,falling behind or moving forward: Rural livelihood movements and persistence in Nepal

Research on household livelihood dynamics is central to rural poverty reduction. In this paper, we adopt a three-wave panel dataset to explore the persistence of and transitions in household livelihoods in three districts of Nepal using duration and dynamic probit models. The results demonstrate that the livelihood strategies of rural households are dynamic: approximately 16 per cent of the sample households transitioned up to high-remunerative livelihood strategies, 10 per cent of the households shifted down to either low- or medium-remunerative livelihood strategies, and 69 per cent remained trapped in low-remunerative livelihood strategies. The major upward transition occurred from medium-remunerative strategies to high-remunerative strategies (14 per cent). Overall, 70 per cent of the households persisted in one of the three livelihood strategies, and the remaining 30 per cent changed their strategy at least once. This dynamic is associated with the households’ duration in a particular livelihood strategy and the various characteristics of households and household heads. Understanding livelihood movement, livelihood persistence and the associated covariates and targeting the poor on this basis is crucial to combating rural poverty and dismantling poverty traps. To this end, the present study suggests (i) strengthening physical and financial asset endowments to address low-remunerative strategies, (ii) improving infrastructure connectivity, particularly in remote and inaccessible areas, (iii) insuring against shocks, iv) enhancing opportunities for generating remittances and enabling petty trade, and (v) supporting the establishment of business ventures.     

Agriculture,Land Tenure and International Migration in Rural Guatemala

In this paper, we ask what the effects of migration and remittances are on land tenure, agriculture and forests, based on empirical evidence from four rural communities in Guatemala. Our results suggest that remittances improve migrant families' access to agricultural land which – depending on the context – fosters more equitable local land distribution patterns or land concentration by migrant families. Changes in the political economy of the country also combine to stimulate these patterns, while remittances contribute to secure land rights held by migrant households. But even though migrant households are acquiring more land, the trend does not change the traditional pattern of land distribution in the country. Regarding forests, significant changes were not observed in two of the communities, while in one we observed forest decline and in the last, forest recovery. A trend away from reliance on the land for survival results in forest recovery.     

The Impact of Migration,Remittances and Public Transfers on Technology Adoption: The Case of Cereal Producers in Rural Kenya

Risk and liquidity constraints are major obstacles to the adoption of modern technologies in many rural African countries. Migration and remittances can help rural households overcome these constraints and increase the adoption of modern technologies. We analyse the impact of migration, remittances and government transfers on the adoption of improved seeds in rural Kenya. Using data from the World Bank, two stage least‐squares estimates show that both migration and remittances positively affect the adoption of improved seeds. However, three stage least‐squares estimates reveal that the adoption of new technologies is more related to migration than remittances.     

Remittances,monetary institutions,and autocracies

ABSTRACT

How do remittances affect the choice of exchange rate regimes? Previous research shows that remittances, by easing the ‘impossible trinity’, increase the probability of governments adopting fixed exchange rates. However, that research overlooks the conditioning effect of monetary and political institutions. We argue that remittances, by altering recipient governments’ incentives to use monetary policy counter-cyclically, make central bank independence a credible anti-inflationary tool in less credible regimes; that is, autocracies. Thus, autocracies that receive remittances do not need to rely on fixed exchange rates. In this way, remittances open policy alternatives for developing autocracies. Statistical tests on a sample of 87 developing and transitional countries between 1980 and 2010 support our argument.     

Home‐grown food and the benefits of sharing: The “intergenerational pact” in postsocialist Moldova

The policy literature on postsocialist Europe tends to frame smallholders' practices of food self‐provisioning and sharing as driven by necessity and proposes land consolidation to increase productivity and efficiency. However, these practices generate nonfinancial benefits, which need to be accounted for. In this paper, I test the socio‐economic relevance of these practices in the Republic of Moldova, the country with the highest density of farming households in Europe and whose government has embraced the rural modernization agenda to integrate into the EU economic space. I carry out quantitative estimates using the household budget survey and complement the results with qualitative insights from an original smallholder survey. I find that food self‐provisioning and sharing are positively related to subjective well‐being and that there is an “intergenerational pact,” with home‐grown food flowing from late‐adulthood smallholders to urban‐based young families and the vulnerable elderly. A counterfactual analysis shows that poverty and inequality would be higher in the absence of donated food, especially in urban areas. The preservation of smallholder farming through widespread access to land could thus help fight poverty and provide social benefits vis‐à‐vis land consolidation.