Development Impacts of International Migration on “Sending” Communities: The Case of Rural Kyrgyzstan

Abstract

This paper analyzes the impacts of international migration and remittances on different sources of income in rural Kyrgyzstan. Based on a household dataset from the Life in Kyrgyzstan panel survey of 1012 rural households, we estimate equations for crop income, livestock income, and nonagricultural income jointly in a system using the seemingly unrelated regressions (SUR) and general method of moments (GMM) three-stage least-squares (3SLS) estimators. Our results show that international migration had diverse effects on different sources of rural income in Kyrgyzstan. The effect of international migration in total was negative on crop income, but positive on livestock income and mixed for nonagricultural income. The positive effect of remittances on nonagricultural income implies that migration can promote diversification of rural households’ income sources. This in turn is associated with less income uncertainty and risk in the future and can provide a positive contribution to the economic development of a migrant-sending community.