rss_2.0IZA Journal of Development and Migration FeedSciendo RSS Feed for IZA Journal of Development and Migration Journal of Development and Migration Feed 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 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 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 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 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 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 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 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 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 and the composition of economic activity in Afghanistan<abstract> <title style='display:none'>Abstract</title> <p>Despite informality being the norm in conflict-affected countries, most estimates of the impact of conflict on economic activity rely on formal sector data. Using high-frequency data from Afghanistan, this paper assesses how surges in conflict intensity affect not only the formal sector, but also informal and illicit activities. Nighttime light provides a proxy for aggregate economic activity, mobile phone traffic by registered firms captures fluctuations in formal sector output, and the land surface devoted to poppy cultivation gives a measure of illicit production. The unit of observation is the district and the period of reference is 2012–2016. The results show that an increase in conflict-related casualties has a strong negative impact on formal economic activity in the following quarter and a positive effect on illicit activity after two quarters. The impact on aggregate economic activity is negative, but more muted.</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 to leave: A new approach to immigration<abstract> <title style='display:none'>Abstract</title> <p>This paper uses queuing theory to examine the linkages between legal and illegal immigration. This approach is particularly appropriate for periods of mass migration and can be used to look at how the <italic>magnitude</italic> of people trying to migrate affects the choice between legal and illegal channels. An empirical illustration shows how origin-country conflict and past migration differently affect current legal and illegal flows. With data for Schengen countries from Eurostat for documented immigration and the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (Frontex) for illegal border crossings (IBCs), I implement a generalized method of moments (GMM) strategy using different estimates of conflict-related deaths and lagged flows of immigration as external and internal instruments, respectively. Violent conflict has a positive and significant effect on IBCs but not on documented migration flows. I find evidence of positive spillovers from the legal channel of immigration into the illegal channel but not vice versa.</p> </abstract>ARTICLEtrue’s economic rights in developing countries and the gender gap in migration to Germany<abstract> <title style='display:none'>Abstract</title> <p>There is a large variation across countries of origin in the gender composition of migrants coming to Germany. We argue that women’s economic rights in developing countries of origin have three effects on their migration prospects to a place like Germany that is far away and difficult to reach. First, the lower are women’s economic rights the fewer women have access to and control over the resources needed to migrate to Germany. Second, the lower are the rights the lower is women’s agency to make or otherwise influence migration decisions. These two constraining effects on the female share in migrant populations dominate the opposing third effect that stems from low levels of women’s economic rights generating a potentially powerful push factor. We find corroborating evidence in our analysis of the gender composition of migration to Germany over the period 2009–2017.</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 wage gap across the distribution: What is the role of within- and between-firm effects?<abstract> <title style='display:none'>Abstract</title> <p>This paper studies the role of within- and between-firm effects on the gender wage gap (GWG). Using linked employer–employee data for Turkey for 2006 and 2014, we show that the wage gap among comparable men and women is much wider within establishments than between establishments. Our distributional analysis shows a more pronounced gap among highly paid workers, consistent with the presence of a glass-ceiling effect. This effect, however, is more apparent within establishments than between establishments, and it is the former that drives the economy-wide glass ceiling that women face. We also find that between 2006 and 2014, the GWG in Turkey widened at all points in the wage distribution, and that this widening was more pronounced within establishments than between establishments.</p> </abstract>ARTICLEtrue gaps in education: The long view<abstract> <title style='display:none'>Abstract</title> <p>Many countries remain far from achieving gender equality in the classroom. Using data from 126 countries, we characterize the evolution of gender gaps in low- and middle-income countries between 1960 and 2010. We document five facts. First, women are more educated today than 50 years ago in every country in the world. Second, they remain less educated than men in the vast majority of countries. Third, in many countries with low levels of education for both men and women in 1960, gender gaps widened as more boys went to school, then narrowed as girls enrolled; thus, gender gaps got worse before they got better. Fourth, gender gaps rarely persist in countries where boys attain high levels of education. Most countries with large, current gender gaps in educational attainment have low levels of male educational attainment, and many also perform poorly on other measures of development such as life expectancy and GDP per capita. Fifth, in the youngest cohorts, women have more education than men in some regions of the world. Although gender gaps in educational attainment are diminishing in most countries, the empirical evidence does not support the hypothesis that reducing the gender gap in schooling consistently leads to smaller gender gaps in labor force participation.</p> </abstract>ARTICLEtrue together: Active and passive labor market policies in developed and developing economies<abstract> <title style='display:none'>Abstract</title> <p>We investigate the macroeconomic impact of public expenditure in active labor market policies (ALMPs) and passive labor market policies (PLMPs) on main employment indicators (i.e., unemployment, employment, and labor force participation) for a large and novel panel database of 121 countries (36 developed, 64 emerging and 21 developing economies). Compared to previous studies, we include for the first time evidence from developing and emerging economies and explicitly examine the possible presence of complementarities between active and passive policies. We find that the interaction between interventions is crucial, as the effect of spending in either of the two policies is more favorable the more is spent on the other. Even the detrimental labor market effects of passive policies disappear on the condition that sufficient amounts are spent on active interventions. This complementarity seems even more important for emerging and developing economies.</p> </abstract>ARTICLEtrue the Egypt Labor Market Panel Survey 2018<abstract> <title style='display:none'>Abstract</title> <p>This paper introduces the 2018 wave of the Egypt Labor Market Panel Survey (ELMPS), previously fielded in 1998, 2006, and 2012. The ELMPS has already become the primary source of data for a large number of scholarly and policy studies on the labor market and human development issues in Egypt, and this new wave will further enhance its value as a critical data public good. This longitudinal survey is nationally representative, tracking both households and individuals over two decades. In this paper, we describe the key characteristics of the 2018 wave, including sampling, fielding, and questionnaire design. Changes in the collection of retrospective data starting in 2018 are discussed, and we demonstrate that they improved the data quality. We examine the patterns of attrition and present the construction of weights designed to correct for attrition, as well as to ensure that the sample remains nationally representative. We compare the ELMPS data with other Egyptian data sources, namely, the 2017 Census and various rounds of the Labor Force Survey (LFS). The data provide important new insights into Egypt's labor market, economy, and society.</p> </abstract>ARTICLEtrue labor agreements and the migration of Filipinos: An instrumental variable approach<abstract> <title style='display:none'>Abstract</title> <p>Bilateral labor agreements (BLAs) are preferred policy models for regulating migration by many governments around the world. The Philippines has been a leader in both agreement conclusion and exporting labor. A recent Congressional evocation is pushing bureaucrats and academics alike to investigate this policy strategy for outcomes and effectiveness. The following analysis answers the question “Do BLAs affect the migration outflows of Overseas Filipino Workers (OFWs)?” using a plausibly exogenous variation to isolate a causal effect. I test for effects of BLAs using two instrumental variables (IVs), such as Bilateral Investment Treaties (BITs) and Formal Alliances, and an original dataset of land-based and sea-based Filipino BLAs and migrant stock in 213 unique areas from 1960 to 2018. I do not find any empirical evidence that these treaties drive migration. However, BLAs have statistically significant effects on gross domestic product (GDP) per capita and exports, suggesting other important channels through which these agreements affect economic outcomes. These null results are critically important for policymakers and diplomats because the resources spent on negotiation are wasted if the primary goal is to increase migration.</p> </abstract>ARTICLEtrue