rss_2.0IZA Journal of Development and Migration FeedSciendo RSS Feed for IZA Journal of Development and Migration Journal of Development and Migration Feed, routinization and wage inequality: gender differences in the case of Uruguay<abstract> <title style='display:none'>Abstract</title> <p>Technology has changed the way we work, creating and destroying employment but especially modifying the occupational tasks we perform. This paper seeks to analyze the contribution of technology to changes in the distribution of wages in Uruguay and its differences between genders. We address this question from the task-based approach perspective. We use the recentered influence function regression decomposition method to analyze men and women wages and the gender wage gap over the period 2005–2015. Our estimates suggest that introducing occupational tasks linked to technology into the analysis contributes to explain changes in the wage distribution as well as in the gender wage gap. Contrary to the routinization hypothesis predictions we find that technology has an overall equalizing effect but, it pushes up the gender wage gap among private employees except at the very top of the wage distribution.</p> </abstract>ARTICLEtrue vs Historical Migrants: A Study on the Canadian Provincial Trade-Migration Nexus<abstract> <title style='display:none'>Abstract</title> <p>We contribute to the literature by exploring the variation in the trade-creating effect of migration networks across historical migrants and recent migrants by applying a micro-founded gravity model of trade. Both the stock of historical migrants and recent migrants variables are constructed by merging Canadian Census data with the migration data available in Statistics Canada. We address the endogeneity issue by applying IV estimators including two-step feasible GMM and PPML with IV and fixed effects by utilizing the imputed annual migration flow, the historical stock, and recent stock of migrants as instrumental variables proposed by <xref ref-type="bibr" rid="j_izajodm-2023-0007_ref_054">Peri and Requena (2010)</xref>. Taking Canadian geographical features into account, this study also applies carefully measured gravity variables. We control for the time-varying, exporter-year fixed effects, and importer-year fixed effects in a panel estimation. Estimated results show that annual migration, recent provincial stock of migrants, and historical stock of migrants significantly increase Canadian interprovincial trade. This impact is stronger for the stock of historical migrants relative to the stock of recent migrants and annual migration flow. Sub-sample analysis shows that both recent and historical migration consistently increase interprovincial service trade, only but not interprovincial goods trade. A greater combination of English and French-speaking provinces-pair significantly increases interprovincial trade. Regional trade agreements significantly impact the interprovincial trade of Canada. Our estimated results are robust to different estimation methods and alternative measures for the migrants’ stock and flow variables.</p> </abstract>ARTICLEtrue COVID-19 Pandemic in Latin American and Caribbean countries: Gender Differentials in Labor Market Dynamics<abstract> <title style='display:none'>Abstract</title> <p>We study gender differences in changes in labor market dynamics before the pandemic and during the COVID-19 pandemic in four Latin American and Caribbean (LAC) countries: Brazil, Chile, Dominican Republic, and Mexico. Specifically, we look at differences in labor market states and at differences in the transitions of workers across labor market states. To identify the pandemic's impact, we compare labor market stocks and labor market flows for a number of balanced panels of workers during the pandemic and before the pandemic. We find that the pandemic has negatively affected employment and labor market participation of both men and women, but that the effect is significantly stronger for women, magnifying the already large gender gaps observed in LAC countries. The main channel generating this stronger impact is the increase in child care work performed by women with school-age children.</p> </abstract>ARTICLEtrue to remit: the effect of remittances on household consumption and dietary diversity in India<abstract> <title style='display:none'>Abstract</title> <p>India has enjoyed over twenty years of rapid economic growth. The benefits of this growth, however, have largely bypassed India's poor; around a quarter of the world's malnourished children reside in India, and their health poses a significant challenge for the Indian government. Although the growth in India's domestic economy did not result in many trickle-down benefits for the hungry poor, anecdotal evidence suggests that food security related indicators has benefited from another factor. Both rural or urban households have become increasingly reliant on remittances and used them to improve their food security. This paper explores the pattern of relationship between remittances and food consumption/diversity utilising data from the India Human Development Survey collected in 2005 and 2011–12. Using Heckman procedure and the instrumental variable approach to correct for selection and simultaneity bias, the paper finds that remittances increase total food expenditure (mainly the expenditure on protein-rich food such as meats, eggs, pulses, vegetables and fruits) as well as food diversity, measured using the Household Dietary Diversity Score, Shannon and Simpson Index. The results are robust to models’ specification and support the existing evidence that remittances represent a mechanism by which households improve their food security.</p> </abstract>ARTICLEtrue of the formal sector: Evidence from India's manufacturing industries<abstract> <title style='display:none'>Abstract</title> <p>The employment structure of India's formal manufacturing sector has undergone substantial changes since the early 2000s with a steep rise in the use of contract workers in place of directly hired workers. Much of the existing literature has attributed the widespread use of contract labour to India's rigid employment protection legislation. The resulting informalisation of the workforce in the organised sector raises concerns about the sustainability of employment growth. Using a 14-year plant-level panel data from the Annual Survey of Industries, we find that in addition to labour market rigidities and the existence of a wage differential between contract and directly hired workers, plants in the organised manufacturing sector have another important incentive to hire contract workers. Plants appear to be using contract workers to their strategic advantage against the directly hired workers to keep their bargaining power and wage demand in check. Importantly, the strength of this bargaining channel varies across plants depending on their capital intensity of production, size and existing contract worker intensity.</p> </abstract>ARTICLEtrue human capital of firms and the formal training of workers<abstract> <title style='display:none'>Abstract</title> <p>The benefits of formal training are numerous, and yet in many regions few firms utilize them. In this study, we build on the literature by exploring how two forms of human capital–the quality of management practices and the proportion of university educated employees - influence the adoption of formal training. Using both cross-sectional and panel firm-level data for 29 economies in Eastern Europe and Central Asia (ECA) and 6 Middle East and North Africa (MENA) economies, management practices of the firm are found to be positively correlated with the implementation of formal training in ECA but not in MENA. The proportion of university educated workers is positively correlated with formal training in both ECA and MENA, but the finding is more robust for the latter. The study explores potential explanations why management practices have no influence on formal training in MENA and related policy implications.</p> </abstract>ARTICLEtrue Remittances During a Global Shock: Evidence From the COVID-19 Pandemic in Mexico<abstract> <title style='display:none'>Abstract</title> <p>During a global shock two forces act upon international remittances in opposite directions: income losses among migrants may reduce their ability to send remittances and, at the same time, migrants’ concern for their family's wellbeing may prompt them to send more remittances back home. Which of these drivers prevail is an empirical matter. We assemble quarterly data at the subnational level in Mexico to study the behavior of remittances during the Covid-19 pandemic. We estimate elasticities of remittances with respect to employment conditions at both origin and destination places of Mexican migrants. Our results show that destination country conditions have been the main driver of remittances to Mexico, whereas origin country conditions had no discernible effect on remittances during the pandemic. We also show that contractions in consumption in Mexico are associated with reductions in remittances. We conclude that risk-coping via remittances provides limited protection during global crises.</p> </abstract>ARTICLEtrue labor markets in the Middle East and North Africa recovering from the COVID-19 pandemic?<abstract> <title style='display:none'>Abstract</title> <p>The COVID-19 pandemic has not only led to a health crisis, but also to economic and labor market crises. In an effort to avert the public health threat, countries in the Middle East and North Africa (MENA) initially put in place some of the world's most stringent government responses. This paper explores how labor market outcomes for MENA workers have evolved during the COVID-19 pandemic. The paper uses the Economic Research Forum (ERF) COVID-19 MENA Monitor (CMM) phone surveys in Egypt, Jordan, Morocco, Sudan, and Tunisia, with waves spanning November 2020 to August 2021. Analyses examine outcomes of employment, unemployment, and labor force participation, along with hours of work and hourly wages. Results show differences in the evolution of pandemic-era labor markets by workers’ gender, age, and education, along with their February 2020 labor market status and industry, as well as their pre-pandemic income. Employment rates have largely recovered and hours of work generally increased. Inequality in wages was initially exacerbated by the pandemic, but there has been at least some recovery on this margin as well.</p> </abstract>ARTICLEtrue role of refugees in the underground economy of the European Union<abstract> <title style='display:none'>Abstract</title> <p>This paper explores the impact of refugees on the size of the underground economy in 28 European Union countries over the period from 1998 to 2017. It applies a nonlinear methodology by employing dynamic panel threshold estimations. The main findings uncover a nonlinear connection between refugees and the informal economy with an inverted V-shape and a different magnitude of effects depending on the share of the refugee population. The underground economy is stimulated at a low level of refugee inflows (where immigrants make up &lt;0.572% of the total population). Large inflows compress the underground economy, which increases competition in the labor market based on lower labor costs. Economic growth and international trade play a crucial role in reducing the size of the informal economy. Equally importantly, coherent unemployment policy and adequate regulation of illegal immigrants support this process.</p> </abstract>ARTICLEtrue international remittances promote poverty alleviation? Evidence from low- and middle-income countries<abstract> <title style='display:none'>Abstract</title> <p>Unlike previous empirical studies, this paper investigates the contemporaneous and lagged impacts of international remittances on poverty alleviation using data for 65 low- and- middle-income countries from 2002 to 2016. By using two-stage least square (2SLS) regression analysis, this study establishes that, in general, international remittances per gross domestic product (GDP) significantly mitigate poverty. On average, a 10-percentage-point increase in remittances will lead to a similar decrease in the poverty headcount ratio at USD 1.90 a day, a 4.8-percentage-point decline in poverty gap ratio at USD 1.90 a day, and a 6.7-percentage-point reduction in the poverty gap ratio at USD 3.20 a day. This result remains robust with the inclusion of political factors in the model. Moreover, the system-generalized method of moments (SGMM) estimations found that the contemporaneous effects of international remittances are much more substantial than their lagged effects. This indicates that most of the poverty alleviation role of remittances is contributed by its direct effect on increasing the wealth index of recipient households rather than the spillover effect on other members of the community. Therefore, we strongly suggest that efforts be made to improve the remittance infrastructures, especially in recipient countries, and the development of cooperatives in the enclaves of migrant workers to spread the beneficial effects of remittances to all members of society.</p> </abstract>ARTICLEtrue Assimilation of Mexicans and Central Americans in the United States<abstract> <title style='display:none'>Abstract</title> <p>Using United States Census data between 1970 and 2017, we analyze the economic assimilation of subsequent arrival cohorts of Mexicans and Central Americans by comparing their earnings and employment probability to those of natives with similar age and education. We find that, on average, these immigrants started with an earnings gap of 40–45% and eliminated half of it within 20 years of arrival. Recent cohorts that arrived after 1995 performed better than earlier cohorts in that they had smaller initial earnings gaps and faster convergence. Additionally, the most recent cohorts entered the United States without an employment rate disadvantage, and they surpassed natives within 10 years. We also find that Mexicans and Central Americans working in the construction sector and those living in nonenclave and urban areas had faster earnings convergence than the others.</p> </abstract>ARTICLEtrue and Household Investment Decisions: Evidence from sub-Saharan Africa<abstract> <title style='display:none'>Abstract</title> <p>The impact of remittances on households left behind by migration is ambiguous a priori due to competing income and substitution effects. We offer new evidence on the effect of remittances on household investment decisions. We enrich our analysis using microdata from five sub-Saharan African countries, different investment alternatives, and different remittance sources. We use a recursive bivariate probit model and imperfect instrumental variable approaches to account for endogeneity concerns. We find that remittances increase the likelihood of human, physical, and social capital investment in most of our sample countries. We also find that remittance sources have a notable influence on household investment decisions. Finally, we explore three potential mechanisms: income effect, substitution effect, and migration expectations. We find that the income effect of remittances mainly drives the positive effect on capital investment. However, we also find evidence of substitution effect by left-behind household members and migration expectations in some countries. We contribute to the ongoing debate on the effect of remittances on capital investments, and our results shed light on the heterogeneous effect of remittance in the literature.</p> </abstract>ARTICLEtrue international migration, shocks and informal finance: analysis using panel data<abstract> <title style='display:none'>Abstract</title> <p>We examine households’ temporary international migration response when faced with shocks in rural Kyrgyzstan. Using a household fixed effects model, we find that while a drought shock increases migration, a winter shock reduces migration. We argue that this difference is because of the trade-off between two effects of a shock for a household: loss of income and increase in the need for labor services. Migration increases when the former effect of a shock dominates and it reduces when the latter effect dominates. We explore these mechanisms further, and find that when households have easier access to informal finance the migration response is muted only for shocks for which the adverse income effect dominates. These findings provide evidence in favor of our proposed mechanisms through which shocks affect migration.</p> </abstract>ARTICLEtrue important are remittances to savings? Evidence from the Latin America and the Caribbean Countries<abstract> <title style='display:none'>Abstract</title> <p>This paper investigates the direct and the indirect roles of migrant transfers in the saving behaviors of the Latin America and Caribbean (LAC) countries during the period 1997–2018. Using the autoregressive distributed lag (ARDL) panel estimation technique, the results based on the Pooled Mean Group approach provide strong evidence of the importance of inward remittances to savings. On average, an increase in inward remittances by 1% leads to about 0.10% increase in savings <italic>ceteris paribus</italic>, but the effect is quantitatively larger in the short-run than in the long-run, albeit more significant in the latter case. Quite outstanding here is the observation of the detrimental role of remittances on savings in the long-run once governance quality in aggregate and disaggregated forms are controlled for, suggesting possible adverse effects of remittances for economic development in the long-run. Nevertheless, macroeconomic stability as well as institutional quality, foreign direct investment (FDI), and foreign aid were found to be important moderators of the remittances–savings linkage. For the latter two variables, emphasis is on complementarity rather than substitutability between remittances, aid, and FDI. While in the short-run remittances appear to perform better in enhancing savings in countries where an improvement in corruption control is visible, political rights and civil liberties compliment migrant transfers in propelling savings in the long- and short-runs, respectively. Moreover, remittances are found to play a major role in ameliorating the adverse effects of the financial crisis on savings, just as they are observed to function as a lifeline to savings in countries with increasing macroeconomic instability in form of inflation, in the long-run. The findings are robust to the use of alternative estimation techniques. Policy recommendations are suggested.</p> </abstract>ARTICLEtrue effects of COVID-19 on employment, labor markets, and gender equality in Central America<abstract> <title style='display:none'>Abstract</title> <p>This study considers the economic impact of coronavirus disease 2019 (COVID-19) on commercial enterprises in four Central American countries – El Salvador, Guatemala, Honduras, and Nicaragua. At the time of analysis, neither the pandemic nor its economic consequences had fully run their course. It is not, therefore, a definitive analysis, but it is important to try to draw important lessons as soon as possible. The main focus of the study was the initial impact on labor markets. The analysis was based on World Bank Enterprise Surveys undertaken before the outbreak of COVID-19 and follow-up surveys on the effects of the pandemic, also undertaken by the World Bank (<italic>Source</italic>: Enterprise Surveys, The World Bank, <ext-link ext-link-type="uri" xmlns:xlink="" xlink:href=""></ext-link>). These were combined with data on both government containment measures and rates of morbidity and mortality. The use of enterprise data to analyze labor market issues has some limitations but also many strengths. The data are useful for analyzing the consequences for gender equality in employment. Since the demand for labor is a derived demand, firm-level data provide a clear link to labor market effects. The pandemic has caused a significant loss in sales for many firms. This has created a loss of liquidity, which, in turn, has caused some firms to reduce employment, working hours, and wages. Government containment measures necessary to save lives, such as temporary workplace closures, have added to the burden for both firms and employees. The study starts by using the surveys to identify the important stylized facts. Although some issues are already well documented anecdotally through media reports, this method provides a more evidence-based approach. It also helps identify several issues, such as the impact on gender equality, which has received less journalistic attention. The study is further supported by a regression analysis (ordinary least squares and seemingly unrelated regression equations models) of several key outcomes (changes in sales, employment, the share of females in employment, and expectations of firm survival). A limitation of such an analysis at any enterprise level is heterogeneity and, consequently, a risk of sample selection bias. To provide robustness checks, we use a matching approach. The results suggest that a significant proportion of surviving firms are vulnerable to permanent closure. The ability of firms to retain labor depends on sales, which are affected by both the pandemic itself and the government containment measures. Only a small proportion of firms have received government support, and there is evidence that it could help both firm survival and the retention of labor. There is some doubt whether the four countries have the institutional capacity to provide effective support. If such doubts prove well founded, then support may need to be externally driven.</p> </abstract>ARTICLEtrue distributional impact of the Sierra Leone conflict on household welfare<abstract> <title style='display:none'>Abstract</title> <p>This study examines the impact of the Sierra Leone civil war on household expenditure inequality. The paper exploits three rounds of household survey data for Sierra Leone in an attempt to estimate the impact of the conflict on the distribution of household welfare over both short-run and long-run periods. The empirical approach uses RIF measures based on the Gini index and also provides estimates of treatment effects at selected quantiles of the unconditional household expenditure distribution. The key findings reveal that localities subject to a protracted period of occupation by rebel forces experienced a sharp reduction in household expenditure inequality in the immediate aftermath of the conflict with most of the contraction evident at the top end of the distribution.</p> </abstract>ARTICLEtrue labor market effects of Venezuelan migration to Colombia: reconciling conflicting results<abstract> <title style='display:none'>Abstract</title> <p>The recent mass migration of Venezuelans to Colombia has become a focal point for economists interested in the labor market effects of migration in developing countries. Existing papers studying this migration wave have consistently found negative effects on the hourly wages of native Colombians, which are most concentrated among less-educated natives working in the informal sector. However, the magnitude and significance of this wage effect varies substantially across papers. I explore the potential specification choices that drive this variation. Differences in how migration is measured are particularly important: exclusion of a subset of migrants from the migration measure, according to characteristics such as time of arrival, amounts to an omitted-variable bias that will tend to inflate the estimated wage effect. In my own analysis based on the total migration rate across 79 metropolitan areas and by using an instrument based on historical migrant locations, I estimate a native hourly wage effect of −1.05% from a 1 percentage point increase in the migrant share or an effect of −0.59% after controlling for regional time trends, alongside little-to-no effect on native employment. Native movements across occupation skill groups and geography are small and do not play a meaningful role in mitigating local wage effects. Wage effects are also larger in cities that have a higher baseline informality rate and lower ease of starting a business.</p> </abstract>ARTICLEtrue in the wider world: the role of education in the choice of destination country<abstract> <title style='display:none'>Abstract</title> <p>This paper examines the relationship between the education level of Spanish emigrants and their destination country. Since Spanish emigrants were born under the same laws and institutions, the differences in their destination countries can be due to dissimilarities in their level of education. To explore this, we use census microdata, covering the period from 2000 to 2007, of 21 countries with Spanish emigrants. Results suggest that with low unemployment rates, English- and Spanish-speaking countries are the most likely to become the host countries for more educated individuals, regardless of their location.</p> </abstract>ARTICLEtrue of immigrant entrepreneurs and native entrepreneurship<abstract> <title style='display:none'>Abstract</title> <p>Using nationally representative data from the United States, the author estimates the causal impact of immigrant entrepreneurship on entrepreneurial propensities of natives. The author draws data from the Annual Social and Economic Supplement of the Current Population Survey and uses within-state variation in supply of immigrant entrepreneurs for identification. To address concerns of endogeneity in the supply of immigrant entrepreneurs, the author takes advantage of a quasi-experiment provided by the State Children's Health Insurance Program. While the Ordinary Least Squares estimates indicate a positive effect, the Two Stage Least Squares estimates suggest that, on average, there is no significant effect of immigrant entrepreneurs on native entrepreneurship. Moreover, there is no net effect on subgroups of natives separated by skill level. There is also some evidence that immigrant entrepreneurs may “crowd-in” Blacks into certain types of self-employment. These results are in contrast to the significant negative impact suggested by the previous literature.</p> </abstract>ARTICLEtrue migration as a mechanism for lasting cultural change: evidence from Nepal<abstract> <title style='display:none'>Abstract</title> <p>When a husband migrates, his wife may control more household resources and therefore change how the household spends income. Given the prevalence of seasonal migration in developing countries, even these temporary changes could affect economic development. The extent to which these changes persist after migration spells will magnify these consequences. Using panel data on rural households in Nepal, we examine how a husband's migration interacts with intrahousehold decision-making and consumption patterns both <italic>during</italic> and <italic>after</italic> migration spells. We find that a husband's absence is associated with a 10 percentage point increase in the expenditure decisions over which the wife has full control. This coincides with a shift away from expenditures on alcohol and tobacco in favor of children's clothing and education. Importantly, we find that migrant husbands resume their role in decisions following their return, but decisions are more likely to be made jointly. These persistent effects are consistent with a model in which households are pushed to a new, more-equitable equilibrium and then are driven to form habits, which, in turn, cause the new equilibrium to stick, thus facilitating long-term cultural change in gender norms.</p> </abstract>ARTICLEtrue