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1. The Static and Dynamic Benefits of Migration and Remittances in Nicaragua

Author:
Lykke E. Andersen and Bent Jesper Christensen
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
This paper utilizes a unique three-wave panel of household data from Nicaragua, which allows a thorough exploration of the relationships between migration, remittances and household consumption. The paper distinguishes between the effects of emigration and the impacts of remittances received. There is a self-selection bias in the decision to send a migrant, as well as in the decision to receive remittances. To adequately correct for these selection biases, we develop a bivariate selection correction procedure. Perhaps surprisingly, the results show that households do not benefit (in terms of higher consumption growth) from receiving remittances, but rather from having migrants abroad. This suggests that not only money are remitted from abroad, but also something more subtle, which could be business ideas, belief systems, aspirations, patterns of social interaction, and other intangibles, which have been dubbed social remittances.
Topic:
Development, Migration, Economy, and Remittances
Political Geography:
Central America and Nicaragua

2. Labor Mobility in Bolivia: On-the-Job Search Behavior of Public and Private Sector Employees

Author:
Lykke E. Andersen and Bent Jesper Christensen
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
Labor market frictions are even more pervasive in developing countries than in Western industrialized economies. In spite of this, stochastic models of frictional markets have rarely been applied to developing countries. In this paper, we estimate structural parameters of both a simple and an extended job separation model with the purpose of understanding constraints in the labor market in Bolivia. The results confirm the hypothesis that skilled labor is scarce in Bolivia, while unskilled labor is abundantly available. This implies that skilled employees shop around for alternative employment opportunities and quit their jobs when a better opportunity arises. The quit rate among skilled employees in the private sector is much higher than the quit rate among skilled employees in the public sector. The reverse is true for the lay-off rate, and together this suggests that the private sector has difficulties maintaining its skilled labor. The private sector might try to improve its capacity to retain skilled employees by increasing wages, but the wage sensitivity parameters estimated in this paper suggest that this is not going to work – skilled employees in the private sector do not seem to reduce their on-the-job search in response to higher wages.
Topic:
Development, Employment, Mobility, and Labor Market
Political Geography:
South America and Bolivia