Abstract
Having a family member migrant reduces not only the labor force participation but also the job satisfaction of those left behind. Migrants’ relatives build their expectations on earnings from migration through received information on the wage distribution in the destination country either from the size of remittances or directly from migrants. If their expected earnings from migration greatly exceed their current wages in the source country, migrant relatives become more dissatisfied with their jobs. Using a simple economic model of job satisfaction and applying both parametric and semiparametric estimations to Tajikistan’s data, as well as with controlling for an endogeneity issue with the variable of interest, we estimate the significantly positive effect of the difference of the expected outside country earnings and current earnings of migrants’ relatives on their job dissatisfaction. A larger gap between what an individual could earn in the migration destination country and what she receives now at her current job in the source country makes that individual unhappier.
Highlights
Our focus in studying the employment-migration relationship is on the source country
We look at how the migration of one person to another country impacts the labor supply decisions of his relatives who remain in a source country
While all previous studies looked at the effect of remittances on the labor supply decisions of migrant relatives, in this paper, we examine how the outmigration affects the job satisfaction of non-migrating relatives
Summary
Our focus in studying the employment-migration relationship is on the source country. Remittances could result in an interior solution in the labor supply problem, where the marginal rate of substitution between the consumption and leisure is equal to the real wage rate Under this condition, if leisure is a normal good, the increase in non-wage income reduces hours of work of migrant family members. Once individual reservation wages are increased to such level that they are higher than market wages, migrant family members would choose not to work (for detailed discussion of the effect of the non-wage income on the labor supply, see Killingsworth (1983)). With school-age children in remittance-receiving families to leave the full-time employment (Cabegin 2006) We look at another dimension in studying the effect of migration on the labor supply of migrants’ family members in the source country—their job satisfaction.
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