The impact of migration and remittances on labor supply in Tajikistan

Remittances from labor migrants abroad have become the largest component of financial flows to developing countries. While they are an important source of foreign currency for low-income countries, the impact of outmigration and remittances on the economic development of the sending country is ambiguous. To narrow this knowledge gap, this paper examines their impact on the domestic labor market, using the case of Tajikistan – a labor migrant contributor and remittance dependent country in Central Asia. Specifically, we estimate the impact of international migration and receipt of remittances on the labor supply decisions and employment of the family members left behind. To ensure rigorous inferences, we apply a control function approach using unique high-frequency household panel data. Our method enables us to correctly address the simultaneity of migration/remittance and labor supply decisions of the left-behind members. Our main estimates are that sending migrants reduces the labor supply of the left-behind members by 5.4 percentage points, and that receiving remittances reduces it by 10.2 percentage points, respectively. These findings suggest that the reservation wage effect of having a migrant member and receiving remittances is large and surpasses other positive effects they might have.     

REMITTANCES AND AGGREGATE LABOR SUPPLY: EVIDENCE FROM SIXTY‐SIX DEVELOPING NATIONS

Do remittances reduce labor supply in recipient economies? This paper addresses this question with aggregate level data for a panel of sixty‐six developing countries from the Middle East and Africa, Asia and the Pacific, and Latin America and the Caribbean over the period 1985 to 2005. The results exhibit a positive and significant relationship between remittances and aggregate labor supply. The effect is clearly driven by men in each of the three regions. Three potential explanations are put forward to explain these empirical findings: (1) non‐migrating household members are likely to increase their labor supply in order to defray migration‐related expenses; (2) neighboring households increase their labor supply to help family members migrate after they become more aware of the benefits of remittances; and (3) remittances overcome credit constraints, thus generating employment.     

Remittances and development: the impact of migration to South Africa on rural livelihoods in southern Zimbabwe

The development potential of remittances has not received much policy attention in the migrants' countries of origin. The Homelink facility established by the Reserve Bank of Zimbabwe in May 2004 excludes undocumented migrants, who are unlikely to use formal channels to send their remittances back home, and studies on international migration from Zimbabwe to South Africa have neglected the role of remittances, especially from undocumented migrants. However, some countries have realised this potential and developed strategies to encourage the flow and investment of remittances, which can contribute significantly to poverty reduction and development. Without such regulations and policies, which require the collaboration of government, migrant groups, the local community, non-governmental organisations and other international organisations, migrant remittances will continue to be used mainly for consumption, with a very small proportion being invested in sustainable investment.     

Identifying the effects of migration on parental health: Evidence from left-behind elders in China

This study pioneers the application of the New Economics of Labor Migration theory to outline and estimate two opposite effects of labor loss driven by the migration and remittances of adult children on the health of left-behind elderly parents through the changing rural market constraints. We use China's rural household survey data and simultaneous equation econometric techniques to estimate the effects of migration on the physical and mental health of left-behind elders. Results indicate that the loss of labor due to migration has a significantly negative effect on the health of left-behind elders, but remittances from migrants can compensate for the adverse effect. This study provides a comprehensive understanding that remittances from migration relax the constraints on household resource allocations in undeveloped rural areas with imperfect market conditions. Overall, left-behind elderly parents benefit from migrant children both physically and mentally.     

The effect of immigration quotas on the average quality of migrating labor and income distribution

In this paper, the authors develop "a simple two-country, single-period model to study the effect of quota restrictions on the composition of migrating labor. [They] have divided the migrant population in two general categories called high skilled and low skilled and have shown that free migration of any category of labor occurs if and only if the country's share of world resources is different from its share of the world labor endowment in that category." Two possible outcomes, given differing labor endowments and income differentials, are considered. The potential effect of illegal immigration is also noted. The authors conclude that their model "is applicable not only to 'brain drain' problems, but also to guest worker programs and/or the mass migration of low skilled workers from poor countries to rich countries."     

Remittances and Competitiveness: The Case of the Philippines

The paper looks at the impact of migration and workers’ remittances on the competitiveness of the home economy. It extends existing research that concentrated on the exchange rate effects of remittances, the so-called Dutch disease effect, by adding labor market effects. The results show that the labor market effects of emigration and remittances have a significant impact on competitiveness that goes beyond the traditional exchange rate effect.     

A Note on the Labor Market Effects of Remittances in Latin American and Caribbean Countries: Do Thresholds Exist?

The labor market effects of remittances have long been examined in the empirical literature. To date, the results have been mixed: some authors observe a negative association between remittances and unemployment while others report that remittances increase unemployment. This study empirically examines the impact of remittances on unemployment using macroeconomic data for a sample of 18 Latin American and Caribbean countries. Specifically, the study tests whether there is a nonlinear relationship between the variables. Results suggest that when the remittance‐to‐GDP ratio is low, remittances have a positive and significant impact on unemployment. However, as they increase, remittances are negatively associated with unemployment. This suggests the possibility that estimations based on the assumption of a linear relationship between remittances and labor may mask the true relationship between the variables.     

外出农民工特征变量及行为抑制:从汇款动机生发

对外出农民工汇款动机及其关键影响因素实证分析表明:农民工汇款更多的表现为交换动机和利己主义,利他主义也得到部分证实。个人特征变量(性别、受教育程度、婚姻等)对农民工汇款意愿和汇款水平均没有显著影响;夫妻共同外出和子女在原籍读书对农民工的汇款行为有显著影响;工资是影响农民工汇款能力的核心指标;回流意愿对农民工汇款意愿和汇款水平均有显著影响,但汇款衰退假说没有得到证实。     

城乡劳动力流动对收入差距变化的影响——机理分析与实证检验

我国城乡劳动力流动规模与收入差距同时扩大的现象引起了学界的重视,但是,学者们就城乡劳动力流动对收入差距的具体影响存在观点分歧;通过分析城乡劳动力流动影响收入差距的作用机理发现：城乡劳动力流动是扩大还是缩小城乡收入差距,关键取决于进城务工人员工资水平的高低,如果他们的工资水平相对于城镇居民来说太低,则城乡劳动力流动不仅不会带来城乡收入差距的缩小,反而会导致差距扩大。这一结论得到了基于山东省相关时间序列数据分析和计量检验的支持。     

COVID-19 and the intentions to migrate from developing countries: Evidence from online search activities in Southeast Asia

COVID-19 has had an enormous effect on labor markets globally. Economic restrictions, notably strict border controls and lockdowns, have led many workers to lose their jobs and forced many migrants to return to their homes or change their migration plans. While adverse effects on labor mobility are expected, variations in the prevalence of COVID-19 and governmental responses to the pandemic across countries are likely to influence workers’ intentions to migrate in different ways. To understand the effects of pandemics on the international labor supply, we explore the impact of COVID-19 and the various economic restriction policies on job search behavior by considering cases from Southeast Asian countries using the difference-in-differences (DID) approach with data from Google Trends Index (GTI). We find that the search volume of queries related to the labor market dramatically increased over time following the outbreak of COVID-19. However, we do not observe any positive impact on the search volume related to emigration, regardless of the infection control measures in the host countries. Our results imply that the job insecurity increases after the imposition of lockdown in the respective countries. On the other hand, the expectation to migrate outside of the country, which requires preparation time and incurs high costs, does not seem to have increased in developing countries.     

The impact of circular migration on a village economy

The author examines the economy of a rural village in Indonesia in which a high proportion of households rely on remittances from urban informal sector earnings. Household income and per capita income are analyzed according to whether or not households have at least one temporary migrant, and by the sex and age of the household head. Findings indicate that "remittances from short-term circular migration push many households into the middle and upper income ranges. However, the wealthiest households continue to rely on traditional high earning activities and do not depend on remittances. The poorest households are scattered among those who rely on remittances and those still totally dependent upon traditional low earning village activities, regardless of the sex and age of the household head."     

Restrictive immigration policy in Germany: pains and gains foregone?

Many European countries restrict immigration from new EU member countries. The rationale is to avoid adverse wage and employment effects. We quantify these effects for Germany. Following Borjas (in Q J Econ CXVIII(4):1335–1374, 2003), we estimate a structural model of labor demand, based on elasticities of substitution between workers with different experience levels and education. We allow for unemployment which we model in a price-wage-setting framework. Simulating a counterfactual scenario without restrictions for migration from new EU members countries in Germany, we find moderate negative wage and employment effects for incumbent foreigners, but positive effects for natives. Our results indicate that for the native German population as a whole the immigration restrictions are not welfare enhancing.     

Are Indian Subcontinent remittance markets connected to each other?

Indian subcontinent countries are some of the largest exporters of labor, and thus, largest receivers of remittances. Having many characteristics in common, their labor markets may be connected due to labor substitution and complementarity. We study the interactions of remittance inflows into India, Pakistan, Bangladesh and Sri Lanka via the Diebold-Yilmaz method. We find a low degree of spillovers across countries. In other words, the dynamics of remittance inflows in each country are largely explained by internal factors, not due to spillovers from other countries. That indicates that international remittance inflows in countries in the Indian Subcontinent that we consider in this study are essentially independent. We also find that the dynamic connectedness tends to fall over time in the aftermath of the 2008–2010 financial crisis, which is reversed after 2014. The initial decline probably happened due to the recovery in the labor receiving economies whereas the increase after 2014 probably reflects the jitters felt in all economies. We conclude that spillover of four countries’ remittance inflows is time-varying.     

Weather shocks,poverty and crime in 18th-century Savoy

Did weather shocks increase interpersonal conflict in early modern Europe? I address this question by exploiting year-to-year seasonal variations in temperature and detailed crime data assembled from Savoyard criminal procedures over the period 1749–92. I find that temperature shocks had a positive and significant effect on the level of property crimes, but a negative and significant effect on violent crimes. I further document how seasonal migration helped to increase the coping capacity of local communities. Indeed, migrant labour both brought in remittances that supplemented communities’ resources, as well as temporarily relieved impoverished households of the burden of feeding these workers. I show that while temperature shocks were strongly associated with an increase in property crime rates, the effect was much lower in provinces with high levels of seasonal migration. I provide historical evidence demonstrating that the inflow of remittances may have driven this relationship.     

农民工的城市住房问题研究

进城的农民工尽管已经加入到城市的劳动分工,承担着城市专业分工的一些重要功能,但是并没有自然地整合到城市社会中去。农民工居住环境恶劣,严重地阻碍了他们对城市的认同,而现有的住房制度,又构成了农民工向城市迁移的反推力。只有"安居"才能"乐业",多渠道采取措施解决其住房问题是农民工真正融入城市社会的关键。     

珠三角"民工荒"的原因与启示

自2004年起,珠三角地区许多企业遇到了招工难问题,由过去的"民工潮"转变为"民工荒". "民工荒"现象的产生最直接的原因就是农民工工资低,生活就业环境差,但深层的原因是我国农民工文化和技能水平低,人力资本不足与珠三角地区产业结构升级矛盾所引起的.因此,化解珠三角"民工荒"的出路在于:一是加强对农民工的人力资本投资,提高民工就业能力;二是加快产业结构升级和转移,实现区域经济协调发展.     

Are Bilateral Remittances Countercyclical?

By putting together a relatively large data set on bilateral remittances of emigrants, this paper is able to shed light on the important hypothesis of smoothing. The smoothing hypothesis is that remittances are countercyclical with respect to income in the worker’s country of origin (the recipient of the remittance), while procyclical with respect to income in the migrant’s host country (the sender of the remittance). The econometric results confirm the hypothesis. This affirmation of smoothing is important for two reasons. First, it suggests that remittances should be placed on the list of criteria for an optimum currency area. Second, it brings into doubt plans by governments in some developing countries to harness remittances for their own use, in that government spending in these countries generally fails the test of countercyclicality which remittances pass.     

Unintended consequences of China's new labor contract law on unemployment and welfare loss of the workers

China's new Labor Contract Law, which intended to strengthen the labor protection for workers, went into effect on January 1, 2008. The law stipulated that the maximum cumulative duration of successive fixed-term (temporary) labor contracts is 10 years, and employees working for the same employer for more than 10 consecutive years are able to secure an open-ended (permanent) labor contract under the new law, which is highly desirable to employees. However, in order to circumvent the new Labor Contract Law, some employers may have dismissed workers, after the passage of the new law, who had worked in the same firm for more than 10 years. Using data from the 2008 China General Social Survey, we find strong evidence that firms did in fact dismiss their formal-contract employees who have been employed for more than 10 years. Additionally, using a regression discontinuity design based on this exogenous change in unemployment status for this particular group of workers, we show that the dismissed workers suffered significant welfare loss in terms of happiness. Our results are robust to various specifications and placebo tests.     

Labor migration and problems of innovative development

The negative effects of the current process of labor migration in Russia are analyzed in this article. It is proposed to limit the migration of low-skilled labor by means of setting quotas and to make the number of labor migrants contingent upon the direct investment in high technology from countries that export labor.     

The export of manpower from Pakistan to the Middle East, 1975–1985

This article summarizes the major findings of recent research undertaken on: (1) Pakistani migration to the Middle East, and (2) on international labour migration in the Middle East and North Africa. The export of manpower from Pakistan for temporary employment in the Middle East has risen dramatically since the oil boom of the mid-1970s. As a consequence, remittances, which constitute the major gain from migration, have become an important source of foreign exchange, amounting to almost 80% of total merchandise export earnings by 1980/ 1981. The direct beneficiaries of these remittances are a million or so migrant households, whose average premigration income was somewhat above the national average household income. Remittances have enabled these households to significantly increase current consumption and purchase assets with the potential of improving their future income stream. Domestic labour has also benefited to the extent that migration has contributed to rising real wages in recent years.Migration has not, however, been an unqualified gain for the economy as a whole. The major cost has been the decline in productivity caused by the departure of quality labour among manual skills and professional categories, both of which cannot be easily replaced. It seems that, on balance, Pakistan has benefited from this labour export. Prospects for continuing migration on a substantial scale remain good for the near future, provided, of course, that projected growth rates of oil exporters materialize. The net benefits for the economy from migration in the coming years will primarily depend upon the extent to which scarce skills can be speedily replaced and remittances utilized to build productivity-increasing assets.