Abstract
This paper analyzes the impact of remittances on the labor supply of men and women in post-conflict Tajikistan. We find that on average men and women from remittance-receiving households are less likely to participate in the labor market and supply fewer hours when they do. The negative effect of remittances on labor supply is smaller for women, which is an intriguing result as other studies on remittances and labor supply (primarily focused on Latin America) have shown that female labor supply is more responsive to remittances. The results are robust to using different measures of remittances and inclusion of variables measuring migration of household members. We estimate a joint effect of remittances and an individual’s residence in a conflict-affected area during the Tajik civil war. Remittances had a larger impact on the labor supply of men living in conflict-affected areas compared to men in less conflict-affected areas. The impact of remittances on the labor supply of women does not differ by their residence in both the more or less conflict affected area.
Highlights
Introduction and motivationLabor migration has become an important component of household coping strategies in countries affected by armed conflict, either as an ex-ante reaction to the threat of conflict, or an ex-post response to unstable economic and political conditions (Engel and Ibanez 2007, Czaikas and Kis-Katos 2009)
The aim of this paper is to estimate the impact of remittances on the labor supply of working age men and women in post-conflict Tajikistan
We find that the amount of remittances received by a household has an overall negative impact on the labor force participation and labor hours supplied by men and women aged 16-65
Summary
Conceptual framework Previous empirical findings show that inflows of remittances are associated with reductions in the labor force participation of both men and women. In the eastern Khatlon and Raions of Republican Subordination could not leave their communities to find work in Tajikistan due to persecution, and women had to take on jobs to provide for their families (Human Rights Watch 1993, 1995; Tadjbakhsh 1996) These new roles may contribute to changes in women’s preferences and attitudes whereby women will be reluctant to leave the labor market for the fear of losing their newly found autonomy even in response to flows of non-wage income to the household (such as remittances). We expect to observe a significant impact of war exposure on household economic decisions, including the supply of labor and the use of remittances We explore this effect by introducing a dummy variable that is equal to one if a district (raion) was severely affected by civil war events in 1992-1998 (‘conflict region’). We interact the ‘conflict region’ dummy with the measures of remittances to examine differences in labor supply responses by regional exposure to the conflict
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