Migration as a Substitute for Informal Activities: Evidence from Tajikistan
AbstractHow is migration related to informal activities? They may be complementary since new migrants may have difficulty finding employment in formal work, so many of them end up informally employed. Alternatively, migration and informality may be substitutes since migrants' incomes in their new locations and income earned in the home informal economy (without migration) are an imperfect trade-off. Tajikistan possesses both a very large informal sector and extensive international emigration. Using the gap between household expenditure and income as an indicator of informal activity, we find negative significant correlations between informal activities and migration: the gap between expenditure and income falls in the presence of migration. Furthermore, Tajikistan's professional workers ability to engage in informal activities enables them to forgo migration, while low-skilled non-professionals without post-secondary education choose to migrate instead of working in the informal sector. Our empirical evidence suggests migration and informality substitute for one another.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6236.
Length: 24 pages
Date of creation: Dec 2011
Date of revision:
Publication status: published in: Research in Labor Economics, 2012, 34, 205-227
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Other versions of this item:
- Ilhom Abdulloev & Ira N. Gang & John Landon-Lane, 2011. "Migration as a Substitute for Informal Activities: Evidence from Tajikistan," Working Papers 311, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
- Ilhom Abdulloev & Ira N. Gang & John Landon-Lane, 2011. "Migration as a Substitute for Informal Activities: Evidence from Tajikistan," CReAM Discussion Paper Series 1124, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-10 (All new papers)
- NEP-DEV-2012-01-10 (Development)
- NEP-IUE-2012-01-10 (Informal & Underground Economics)
- NEP-LAB-2012-01-10 (Labour Economics)
- NEP-MIG-2012-01-10 (Economics of Human Migration)
- NEP-TRA-2012-01-10 (Transition Economics)
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