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Migration as a Substitute for Informal Activities: Evidence from Tajikistan

Author

Listed:
  • Ilhom Abdulloev

    (Rutgers University)

  • Ira N. Gang

    (Rutgers University & Fellow of IZA, OEI, CReaM)

  • John Landon-Lane

    (Rutgers University)

Abstract

How 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.

Suggested Citation

  • Ilhom Abdulloev & Ira N. Gang & John Landon-Lane, 2011. "Migration as a Substitute for Informal Activities: Evidence from Tajikistan," RF Berlin - CReAM Discussion Paper Series 1124, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
  • Handle: RePEc:crm:wpaper:1124
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    References listed on IDEAS

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    Cited by:

    1. Anita Staneva & G Arabsheibani, 2014. "Is there an informal employment wage premium? Evidence from Tajikistan," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-24, December.
    2. Jakhongir Kakhkharov, 2017. "Remittances and household investment in entrepreneurship: The case of Uzbekistan," Discussion Papers in Finance finance:201703, Griffith University, Department of Accounting, Finance and Economics.
    3. Mukhamedova, Nozilakhon & Wegerich, Kai, 2018. "The feminization of agriculture in post-Soviet Tajikistan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 57, pages 128-139.
    4. Artjoms Ivlevs, 2016. "Remittances and informal work," International Journal of Manpower, Emerald Group Publishing Limited, vol. 37(7), pages 1172-1190, October.
    5. Indra Kant Bharti & Tulika Tripathi, 2020. "Effect of Remittance on Intergenerational Mobility in Case of Occupation," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(4), pages 1203-1221, December.
    6. Petr Huber & Ulugbek Rahimov, 2014. "Formal and Informal Sector Wage Differences in Transition Economies: Evidence from Tajikistan," MENDELU Working Papers in Business and Economics 2014-48, Mendel University in Brno, Faculty of Business and Economics.
    7. Victoria Strokova & Mohamed Ihsan Ajwad, 2017. "Tajikistan Jobs Diagnostic," World Bank Publications - Reports 26029, The World Bank Group.

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    More about this item

    Keywords

    informal; migration; remittances; Tajikistan;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, 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 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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