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International Contract‐Based Migration, Remittances, and Household Well‐Being in the Western Province of Sri Lanka
Author(s) -
Sharma Manohar P.
Publication year - 2013
Publication title -
international migration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.681
H-Index - 64
eISSN - 1468-2435
pISSN - 0020-7985
DOI - 10.1111/j.1468-2435.2011.00683.x
Subject(s) - remittance , consumption (sociology) , poverty , market liquidity , demographic economics , business , developing country , human migration , household income , economics , population , labour economics , economic growth , geography , finance , social science , demography , archaeology , sociology
Contractual temporary international migration has become a major avenue for employment for Sri Lankans. To the extent that this migration is fuelled by demand for relatively low‐skilled labour, expansion of this segment of the global labour market can be expected to benefit poor Sri Lankans disproportionately and provide them an unusually swift exit out of poverty. But is this really so? This study employs an innovative sampling design to draw a representative sample of migrant and non‐migrant households in the western province of Sri Lanka. Using household survey data, the study examines key demographic correlates of migrants and their families, and computes various types of transactions costs associated with the migration process. Using the Propensity Score Matching method, it assesses the net impact of migration on several measures of household well‐being. The study indicates that relatively poor households do in general gain from international contract based migration, but there are also several strong caveats. First, the upfront costs of securing an overseas employment contract and financing migration‐related expenses is high, and poor households that are liquidity‐ or credit‐constrained are less likely to take advantage of migration opportunities. Second, many poor households are also less likely have the needed social connections to facilitate effective job search. Consequently, public policy that corrects these market failures would be significantly pro‐poor. On the effect of migration, the study finds the cumulative impact of migration and remittance to be significantly positive on key areas such as food consumption, health expenditures, and expenditure on basic non‐food goods. Even so, there is substantial scope for integrating remittance transfer with banking services (both savings and loans), not only to reduce the cost of transfers but also to provide remittance recipients wider options to manage this important resource.