Labour market performance and migration flows - European ...

Chapter IFinal ReportAs far as the supply of labour is concerned, remittances can reduce the work effort of the members ofrecipients households due to the positive income effect they bring about (see the recent empiricalcontribution, related to Mexico, by Cox Edwards and Rodríguez-Oreggia 2009). Remittances also loosenthe liquidity constraints that can hinder investments in education (Cox-Edwards and Ureta, 2003;Rapoport and Docquier, 2006) as young members of recipient households have a higher probability ofmigrating than the rest of the population (Van Dalen et al., 2005). Thus, whether the positive incomeeffects determined by the receipt of migrant remittances feeds into higher investment in educationdepends on whether the prospect to migrate improves or worsens the incentives to make such aninvestment. If the former is the case, then remittances can delay the entrance of young cohorts to thedomestic labour market, as they raise the enrolment rates in higher-education institutions. In the mediumrun, this would improve the skill-composition of the labour force. If, on the other hand, the prospect tomigrate reduces the incentives to invest in education, remittances could be used to finance the migrationcost for an additional household member. Observe that in both cases remittances reduce – in the shortrun – the size of the younger cohorts which enter the labour market, either through a higher retention ratein the educational system, or through increased migration. Remittances can also produce a detrimentalimpact on human capital formation, if they open up opportunities to undertake productive investments infamily-run activities, which represents the use of remittances which is supposed to be the use whichdelivers the greatest developmental contribution for the recipient countries (see Taylor, 1999 for acritique of this position). For evidence for selected Middle Eastern countries, see Bouhga-Hagbe (2006).Although the educational systems in most AMCs impose limited direct costs upon the students and theirfamilies (Vossensteyn 2004), indirect costs can be substantial, and the positive income effect due toremittances can improve households’ ability to afford them, thus raising the educational achievement ofyoung members in recipient households. Table 5.2.1 shows that – as far as the Maghreb countries areconcerned – the vast majority of current migrants have low levels of education, so remittances can givean opportunity to break this poverty trap, raising the level of education of young family members overand above the one of the migrants. Indeed, Table 5.3.1 above reveals that school fees represent thesecond or third most relevant use of remittances in recipient households in all the seven AMCs surveyedby EIB (2006). There are a number of studies – such as Berriane (1996), Bencherifa (1996) and de Haas(2003), quoted in de Haas (2007) – which argue that remittances to Morocco contribute to an increase inexpenditures in education which benefits young pupils of both sexes.As far as the impact of remittances on the labour participation rate of women is concerned, a recentbook by Ennaji and Sadiqi (2008) analyzes the impact of the – predominantly male – migration fromMorocco on the women left behind, and it finds that they tend to assume roles in the productionactivities that were formerly covered by the male migrants so their participation rate increases insteadof decreasing. Nevertheless, Ennaji and Sadiqi (2008) argue that “most migrant husbands would refuseto allow their wives to work outside the home because this work jeopardizes their social role and theimage as household bread-winners”. They also provide evidence that migration is associated with arelevant change of family structures, as 26.2% of the sampled women went back to live with theirparents, who can help them in taking care of the children. This is so because AMCs are oftencharacterized by “weak transportation and child care infrastructure [that] discourage women fromgoing out to work, as does the lack of social support for children or the aged, the burden of whose carefalls on women” (UNDP 2006), and the women left behind do not seek employment because of “theirinability to combine their work outside with duties as mothers and housewives”. Such a change infamily structure is clearly connected with the need for greater female engagement in the labourmarket, and it suggests that migration per se can increase female participation rates on the labourmarket. Nevertheless, such an effect need not materialise: even in Palestine, when the husbandmigrates, women tend to live with their husbands’ families, but this does not consolidate an active rolein the labour market (Hilal 2007). Thus, it is important to stress that increased female participation canbe expected to be mostly confined to self-employment activities – such as family-run agriculture orretail trade – rather than to wage employment, given the persistent and high levels of maleunemployment even in migrant-sending areas. Thus, the argument provided by Hijab (1988), who75