Essays on migration, remittances and development in origin countries

International migration can potentially improve development and welfare outcomes in developing countries. However, the impact of this powerful force on left behind individuals is increasingly investigated but not fully understood. This thesis contributes to the literature on the effect of international migration and remittances on individuals left behind. It consists of three self-contained essays that address the following: the effect of remittances on households’ investment decisions, the effect of remittances on households’ labour supply, and the phenomenon of remittance dependency, which is when remittances undercut the incentives for households to generate income. The first empirical essay “Remittances and Household Investment Decisions: Evidence from Sub-Saharan Africa” provides new evidence on the effect of remittances on households’ investment decisions. The chapter uses cross-sectional data from five Sub-Saharan African countries, a recursive bivariate probit model and instrumental variables and imperfect instrumental variable approaches to account for endogeneity concerns. The results show that remittances increase the likelihood of investment in human, physical, and social capital in most of the countries analysed. We also find that remittance sources – whether domestic, within Africa and out-of-Africa – have a marked effect on household investment decisions. Finally, we find that the income effect of remittances mainly drives our key findings. However, we also find evidence of substitution effect by left-behind household members and migration expectations in some countries. This chapter contributes to the ongoing debate on the effect of remittances on capital investments. The second empirical essay “Migration, Remittances and Labour Force Participation: Evidence from Sub-Saharan Africa” contributes to the nascent literature on the effect of international migration and remittances in Sub-Saharan Africa. The chapter uses cross-sectional data from five Sub-Saharan African countries, instrumental variables and imperfect instrumental variable approaches to account for endogeneity concerns. The results show that the effect of remittances on labour supply in Sub-Saharan Africa differs by country. I find that remittances increase labour supply (at the extensive margin) in Nigeria and Burkina Faso, no statistically significant effects in Kenya and Uganda, and a negative effect in Senegal. The results in Senegal and Burkina Faso are driven by female left behind household members and are stronger in rural areas. Meanwhile, remittances ease liquidity constraints in Nigeria and facilitates the establishment of small businesses for men. Analysis of mechanisms show that the results are mainly driven by the income effect of remittances and to a lesser extent the liquidity effect of remittances. I do not find evidence of the labour lost effect in any of the countries under review. The third empirical essay “Remittances and Household Dependence: Evidence from Bangladesh” re-examines the notion in the literature that remittance receipt leads to dependency culture. We use cross-sectional data from Bangladesh, instrumental variable and imperfect instrumental variables approach to account for endogeneity concerns. The results show that remittance receipt increases the probability of households to engage in income generating activities and increase household’s non-remittance income. Taken together, our result show that remittances does not lead to remittance dependence, as suggested by the migration and remittance literature. Instead, remittances ease households’ liquidity constraints and facilitates investment in capital and other income generating activities that increases households’ non-remittance income. We also show that health-productivity and liquidity effect are two main mechanisms through which remittances affect household dependence

For what it’s worth: European Arts & Humanities graduates’ employability and their engagement in society

How do European Arts and Humanities (A&H) graduates contribute to their economies and societies? This paper aims to answer this challenging research question by analysing data from the 2018 pilot Eurograduate survey of graduates. The article explores the monitoring of employment dynamics and considers the labour market outcomes of A&H graduates compared to other graduate groups. Our analysis enables an understanding of the utilisation of A&H graduates’ knowledge and skills in the current employment market (job-qualification match) and more specifically, their contribution to legal, social and cultural occupations. The dataset variables enable an exploration of the multiple contributions made by A&H graduates to other aspects of contemporary society. Specifically, we examine graduates’ volunteering activity during and after their degree, alongside other forms of civic engagement, including political and social action. The findings contribute to the broader debate on the value and impact of A&H degrees beyond measurements of graduate earnings

The age-wage-productivity puzzle: evidence from the careers of top earners

There is an inverted u-shaped relationship between age and wages in most labour markets and occupations, but the effects of age on productivity are often unclear. We use panel data on productivity and salaries in a market of high earners, professional footballers (soccer players) in North America, to estimate age-productivity and age-wage profiles. We find stark differences between these profiles; wages continue to increase for several years after productivity has peaked, before dropping sharply at the end of a career. This discrepancy poses the question: why are middle-aged workers seemingly overpaid relative to their contemporaneous productivity? The richness of our dataset allows us to investigate a range of possible mechanisms that could be responsible, including institutional factors, unobserved elements of productivity, and a talent discovery theory, by which teams pay younger players less because their productivity is more uncertain. We find some evidence that tentatively supports this last mechanism