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.     

Are International Remittances Altruism or Insurance? Evidence from Guyana Using Multiple-Migrant Households

While international remittances provide significant disposable income for many households in less-developed countries, there is no consensus on migrants’ remittance motivation. Two principal competing explanations for remittances are altruism and risk sharing. This paper employs previously unanalyzed data to bring new evidence to the debate. We develop a simple theoretical model that yields distinct testable predictions for each motivation. Among the model’s testable predictions is differential remittance behavior by migrants from households with multiple versus single migrants under altruism and risk sharing. Our estimation finds significant differences in remittance behavior of multiple and single migrants and these differences support the altruistic incentive to remit.     

Remittances from international migration: A review in perspective

Remittances—the portion of international migrant workers' earnings sent back from the country of employment to the country of origin—have come to play a central role in the economies of labor-sending countries. Recent research has tended to focus on enumerating the costs and benefits of remittances. This paper proposes an alternative perspective and delineates the “Remittances System” as a heuristic to clarify intermediate relationships between determinants and effects of remittances. Using the heuristic as a framework for review of recent literature concerning remittances, the paper identifies gaps in currently available research and argues for greater focus upon the social and political consequences of remittance flows.     

Do remittances moderate financial development–informality nexus in North Africa?

The prevalent informality and sheer size of international remittances characterize the North African countries. This study primarily aims at investigating how remittances moderate the effects of financial development on the informal economy in North African countries. Employing pool mean group (PMG)/panel ARDL approach and a balanced panel data set over the period 1980–2015, we find that remittances moderate the negative relationship between financial development and informal economy. This finding suggests that remittances bolster financial development, which, in turn, decreases the informal economy. Based on this result, we recommend that tailored policies and interventions are needed to promote financial development and international remittances in the North African region.     

Did the Early A8 In-migrants to England go to Areas of Labour Shortage?

This paper analyses the local incidence across England of migration flows from the eight Accession (A8) countries of east and central Europe immediately following the 2004 expansion of the European Union. It examines not only the total inflow of A8 migrants but also the three largest nationality groups, as well as three large groups defined by the type of job they gained. The distributions of these migrant groups are related to labour market conditions to see how far migrants were attracted to areas with tight labour supply. Migrant group distributions are modelled to take into account other potential drivers such as the patterns of earlier migrant populations. Datasets on the A8 migrants have limitations, and these are noted because policy development may be hindered as a result.     

Remittances from international labour migration: a summary of findings and issues for labour-exporting developing countries of the ESCAP region

International labor migration from the ESCAP region to the Middle East is analyzed, and patterns of remittances from migrants are examined. The focus is on "contract" migration, in which the workers involved have no intention of settling in the country of employment and which is characterized by a job contract that is concluded by the employer on behalf of the workers. Topics discussed include the labor market situation, controversies over the benefits of remittances, the flow of migration and the stock of workers in host countries, characteristics of migrating workers, management of the migration flow, the size and significance of remittance flows to ESCAP countries, and policy issues.     

The migration and development nexus in Southern Africa Introduction

The role of international and internal migration in facilitating or inhibiting development is currently attracting considerable attention globally. In southern Africa, the migration–development nexus has been researched for a number of years and policy makers in both the development and migration fields are now paying it increasing attention and increasingly recognising the significance of migration for development and poverty reduction. Much of the international debate on this nexus is hampered by the absence of sound, reliable national and local data. This collection of essays by southern African researchers combines the national with the local, the quantitative with the qualitative, and addresses several prominent themes in the global migration–development debate: remittances, the brain drain and migrant rights. It also focuses on key migration–development issues which have received less attention globally, but which are of critical importance to southern Africa: migration and HIV/AIDS, migration and food security and the rural impact of migrant retrenchments. This Introduction to the collection contextualises the essays within current international and local debates.     

The Effects of Remittances on Output per Worker in Sub‐Saharan Africa: A Production Function Approach

This paper uses a production function to examine the channels through which remittances affect output per worker in 31 Sub‐Saharan African countries from 1980 to 2010. Lagged remittances increase physical capital per worker, average years of schooling and total factor productivity, but the effectiveness of remittances varies with the income level of the recipient nation. Although remittances have increased both physical capital and total factor productivity among the upper middle income nations, among the lower middle income, they have increased only the physical capital. Meanwhile a reduction in institutional risk has encouraged investment and efficiency, but its relationship to the effectiveness of remittances has been inconclusive.     

Do International Remittances Affect Poverty in Africa?*

Abstract: International remittances flowing into developing countries are attracting increasing attention because of their rising volume and their impact on recipient countries. This paper uses a panel data set on poverty and international remittances for African countries to examine the impact of international remittances on poverty reduction in 33 African countries over the period 1990–2005. We find that international remittances—defined as the share of remittances in country GDP—reduce the level, depth, and severity of poverty in Africa. But the size of the poverty reduction depends on how poverty is being measured. After instrumenting for the possible endogeneity of international remittances, we find that a 10 percent increase in official international remittances as a share of GDP leads to a 2.9 percent decline in the poverty headcount or the share of people living in poverty. Also, the more sensitive poverty measures—the poverty gap (poverty depth) and squared poverty gap (poverty severity)—suggest that international remittances will have a similar impact on poverty reduction. The point estimates for the poverty gap and squared poverty gap suggest that a 10 percent increase in the share of international remittances will lead to a 2.9 percent and 2.8 percent decline, respectively, in the depth and severity of poverty in African countries. Regardless of the measure of poverty used as the dependent variable, income inequality (Gini index) has a positive and significant coefficient, indicating that greater inequality is associated with higher poverty in African countries, much in conformity with the literature. Similar results were obtained for trade openness. In the same vein, per capita income has a negative and significant effect on each measure of poverty used in the study. Our results also show that inflation rates positively and significantly affect poverty incidence, depth and severity in Africa. In all three poverty measures, the dummy variable for sub‐Saharan Africa is strongly positive, and strongly negative for North Africa. The policy implications of these results are discussed.     

Poverty,gender and migrancy: Lesotho's migrant farmworkers in South Africa

During the 1990s, eastern Free State vegetable farmers increasingly relied on migrants from neighbouring Lesotho for seasonal labour. This coincided with a major downsizing of the mine labour force in South Africa, hitherto the major employer of Basotho migrant workers. However, there was no simple process of transfer of unemployed migrants from the mining to the farming sector; rather, decisions were mediated by domestic relationships and household poverty in Lesotho. Basotho women and girls have been a major casualty of mine retrenchments and the drying up of remittances, and those with domestic skills but little formal training have been forced into the labour market, mainly domestic work in towns and labour on farms. This article examines the Basotho migrants' experiences and conditions of employment, the regulatory environment within which they are recruited and employed, and their future in the context of changing immigration and migration legislation in South Africa.     

The role of politics in the migration of Zimbabwean teachers to South Africa

This paper contributes to the debate on the role played by the political crisis in Zimbabwe in causing teacher migration to South Africa in the presence of other social and economic drivers. The paper uses data collected through a questionnaire self-administered by 100 Zimbabwean teachers in South Africa (migrants) and another 100 in Zimbabwe (non-migrants). In-depth interviews with a few migrant teachers were used to supplement these data. Although it was the second most mentioned reason for the teachers' migration to South Africa, the role played by political violence or repression in Zimbabwe in causing this migration should not be downplayed. Most migrant teachers came from Zimbabwean schools affected by political violence to a large extent before or after the 2008 presidential elections, especially rural areas. Teachers that held positions or distributed opposition party regalia were mostly displaced by violence. There is an urgent need for political transformation to more democratic rule in Zimbabwe.     

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.     

Impact of financial development on domestic investment: Evidence from West African countries

This paper investigates the effect of financial development on domestic investment in West African countries. The study uses data from 1985 to 2019 and employs the pooled mean group technique. The main finding of the study is that financial development has a positive effect on domestic investment in the long run but an insignificant effect in the short run. Furthermore, remittances, real GDP per capita and trade openness increase investment rate. The results of causality tests support the view that investment is a channel through which financial development stimulates economic growth. Therefore, it is reasonable for the selected countries to formulate policies that promote domestic credit to the private sector in order to ease liquidity constraints and increase investment and economic growth.     

Migrant Remittances Provide Resilience Against Disasters in Africa

How responsive are migrant remittances to various disasters, both natural and human-made? Would remittances be affected by systemic financial crises, such as the 2008–09 financial crisis, or more recent crises affecting the Eurozone? Using panel data on 23 sub-Saharan African (SSA) countries from 1980 to 2007, we find that remittances are slow to respond to natural disasters, unresponsive to outbreaks of conflict, and will slowly decline following a systemic financial crisis. This suggests that, given its stability, remittances are sources of resilience in SSA.     

Remittance,Institutions and Investment Volatility Interactions: An Intercontinental Analysis

Generating massive investment for growth and development has been one of the main policy goals of most economies around the globe. Countries, most especially developing ones, are highly susceptible to investment volatility owing largely to the fragile nature of their economies as well as weaknesses in terms of dysfunctional institutions. Therefore, sound economic management suggests the need to better understand possible sources for mitigating the adverse effects of investment volatility. Remittances have been identified as important capital flows which do a good job of dousing macroeconomic volatilities. It is on this basis that the study sought to uncover the causal relationship between remittances and investment volatility via the intermediating role of institutions. Using a panel of 70 countries and the system Generalized Method of Moments (GMM) estimator, three insightful outcomes come to the fore. First, remittances played countercyclical roles across the estimated regressions. Second, institutional quality had no significant role in mitigating investment volatility and lastly, the interactive terms of both remittances and institutions significantly mitigated the negative impacts of investment volatility with the exception of the political component of the institutional architecture. Policy suggestions are drawn based on our results.     

Capital Inflows and Exports Diversification in Sub‐Saharan Africa during the MDGs Era

This paper explores the impact of different forms of capital inflows, including foreign direct investment, foreign aid, portfolio investment, and remittances, on exports diversification in sub‐Saharan Africa during the Millennium Development Goals (MDGs) era. We employ the Generalized Method of Moments (GMM) estimator to deal with the endogeneity issue. Using a sample of 35 countries over the period 2000–15, it shows that the impact of capital inflows on exports diversification depends on the type of capital. We find evidence that foreign aid, foreign direct investment, and remittances have positive effects on exports diversification, while portfolio inflows negatively affect exports diversification. Moreover, we find that the impact of capital inflows on exports diversification differs across the region of destination of the exported products. This study underscores the important role of international cooperation and capital inflows in sub‐Saharan Africa, and lends support to policies aiming to attract foreign capital.     

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.     

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。     

Workers' Remittances,Capital Inflows,and Economic Growth in Developing Asia and the Pacific

This paper examines the impact of remittances on economic growth, using developing countries in Asia and the Pacific as a case study. Using data for the period 1993–2013, our results show that remittances only generate negative and significant impacts on economic growth if they reach 10 percent of GDP or higher. A remittances‐to‐GDP ratio of below 10 percent could still impact growth negatively, but the effect is statistically insignificant. The present study finds some degree of substitutability between remittances and financial development. Foreign direct investment (FDI), but not other types of capital inflow, contributes significantly to economic growth. Other traditional growth engines, including education, trade openness, and domestic investment, are crucial in promoting growth in developing Asian and Pacific nations.     

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."