Labour market performance and migration flows - European ...

European CommissionOccasional Paper 60, Volume I1.5 Social remittancesThe transmission of ideas from migrant countries of destination can modify some behaviors – such asthe female participation to the labour market, which is discussed in section 2.4 – which, in turn, havean impact on fertility choices (Fargues, 2007a; Fargues, 2007b; Beine et al., 2009). This transmissionof demographic norms from the countries of destination to the countries of origin has a delayed impacton the labour market, as it influences the size of the cohorts which enter the labour market 20 yearslater. This entails that the past migration record of a country influences the current demographicpressure on the labour market.2. Behavior in the labour marketSection 1 has analyzed the impact that migration exerts on a country’s endowment of labour eitherdirectly or indirectly through the influence it can produce on the incentives to invest in education. Still,migration can also influence the behavior of working-age individuals on the domestic labour market.Migration influences both the ability to take up a job offer – through the reshaping of family structuresthat it induces, and the willingness to do so – through the income effect brought about by migrationand remittances. Even social remittances can significantly influence behavior on the labour market, asdestination countries often differ in features such as the rate of female participation.2.1 Actual migrationThe migration of a family member can have a relevant impact on family structures. If the member whomigrates leaves some children behind, then this can lead to a significant reshaping of family structures.His – or, less likely, her – spouse can go back to their parents’ house, in order to have someone whocan help them in taking care of the children left behind. Bryant (2005) observes that “children ofmigrants are more likely to have relatives from outside the nuclear family living in the samehousehold, especially if both parents are overseas”. This entails that migration could per se fosterfemale participation in the labour market, as women can more easily rely on relatives to take care oftheir children.2.3 Prospect to migrateThe prospect to migrate can have an impact on the participation rate or on the reserve wage ofdomestic workers (Fan and Stark, 2007a). The latter effect can be channeled through the culturalinfluence that destination countries exert, as people adjust their perception with respect to whatrepresents a fair wage. Would-be migrants adopt a wait and see strategy, devoting their efforts toprepare their migration project, and turning down low-paid job offers. If the prospect to migrateinduces some individuals to give up any attempt to actively look for a job – so that they are no longerrecorded as being unemployed – then this could further reduce the unemployment rate, though it isdoubtful, to say the least, that the country would gain from this further reduction.2.3 RemittancesRemittances can reduce the work effort of the members of recipient households (see the recentempirical contribution by Cox Edwards and Rodriguez-Oreggia, 2009). This can come about with thepositive income effect brought about by remittances, although one should be aware of not takingremittances at their face value. Remittances are not just added to other household income sources.Rather they have to replace the lost domestic income of the migrant, who is often the main breadwinnerin the household. As Acosta et al. (2006) observe, “migration also entails potential losses of118