Impact of remittances on youth labor in Kyrgyzstan
This analysis shows that remittances are used for general household expenditures rather than supporting entrepreneurial activities, increasing the likelihood of a young person becoming a "family contributing worker". Find out more below, or through the PEP Working Paper 2016-05 and Policy Brief 130.
With implications for a variety of policy areas (notably youth, migration, agriculture and education), the outcomes of this PEP study were widely disseminated at the national level, with the researchers invited to share and discuss their findings on various platforms - academic, policy, media, NGOs and civil society. As a result, their findings and policy recommendations are being taken up as an evidence base by the Kyrgyzstan Ministry of Labor, Youth and Migration, and have already been used to inform a report by the National Institute of Strategic Studies assessing the efficiency of the national migration policy. Find out more below or in the PEP Impact Brief.
Context, issues and objectives
The Kyrgyz Republic is one of the poorest countries in Eastern Europe and Central Asia (ECA) with half the population living on less than $2.50 (PPP) per day.
Since the dissolution of the USSR in 1991, the country has suffered economic crises and a lack of investment that have caused mass labor migration, mostly to Russia and Kazakhstan. According to official data, almost 10% of the active population migrates to Russia annually, either for seasonal work or on a permanent basis. Other studies suggest the migration rate could be as high as 20%.
This is not surprising when almost half the population between the ages of 15 and 29 is unemployed. This age group represents 30% of the country’s population. Such a young population requires dynamic economic performance to generate employment opportunities, but this is yet to happen.
Those that migrate to find work send remittances to help their family members left behind. Previously, studies on remittances in Kyrgyzstan focused on household welfare and agricultural productivity, which is why a team of local PEP researchers set out to investigate the effects of remittances from international migration on the employment of the left-behind youth.
Research questions, method, and key findings
The team analyzed cross-sectional data from the 2011 “Life in the Kyrgyz Republic” survey for 1633 youth (aged 15 to 28) using the instrumental variable approach. The researchers looked specifically at two measures of labor supply: the impact of remittances on the occupational choice of youth, and the number of working hours of youth in a given occupation.
The team’s analysis indicates that remittances from a family member working abroad increase the likelihood that a young person becomes a “family contributing worker”, meaning that young people who have difficulty finding a job are more inclined to contribute to the household through domestic chores or agricultural work. The team also found that youth with basic, secondary and/or technical education are more likely to become self-employed compared to university-educated youth. While remittances were not found to promote unemployment nor generate dependency amongst the left-behind youth, they do tend to be used for general household expenditures rather than to fund entrepreneurial activities.
Based on these findings, the researchers believe that policies supporting the productive use of remittances (e.g. to start a business) should be implemented to encourage projects throughout the country. Secondly, the research team recommends reforms to the education system to better meet the (domestic and international) labor market requirements in terms of demand and skill, and to provide specific training to encourage entrepreneurship. Find out more about the research methods, findings and policy recommendations in the PEP publications posted below, in particular the Working Paper 2016-05 (full paper) and Policy Brief 130.
Project links and documents
|Find out more about this project - its analytical approach and outcomes - through the following links/documents:|
|PEP Project PMMA-12594||Working Paper 2016-05 (PDF)|
|Project proposal (Word)||Policy Brief 130 (PDF)|
|Final report (PDF)||Impact Brief (PDF)|
Policy engagement, consultation, and dissemination
Before the project was selected for PAGE funding, the research team developed a policy outreach strategy and held preliminary meetings with the main stakeholders to inform their project proposal.
The team identified three key stakeholder groups they would need to consult and work with: government organizations, non-governmental organizations, and international donor organizations.
Following the project’s selection, the team met with the Minister of Labor, Migration and Youth and the deputy director of the National Institute for Strategic Studies of the Kyrgyz Republic (NISI KR), an advisory organization. These high-level meetings continued throughout the project.
The Minister of Labor, Migration and Youth expressed particular interest in this project, noting that government organizations responsible for developing effective migration and youth policies need empirical analysis, something that is rare in Kyrgyzstan. Other institutions also stated their strong interest in the quantitative results the team would provide, as previous data produced in Kyrgyzstan is mostly descriptive. In particular, the NISI KR deputy director stated that the team’s findings would be used as one of the main sources of evidence for an NISI KR report assessing the efficiency of the national migration policy.
As well as significant consultation efforts, the team’s dissemination strategy was also highly effective, reaching key stakeholders and policy actors both nationally and internationally.
The team presented their results to the Chair of the Civic Council of the Ministry of Labor, Youth and Migration. She stated that she would discuss the policy implications of the research at the Civic Council meeting with a view to incorporating the recommendations into Ministry activities.
Based on their work, the team was invited to attend numerous meetings and conferences, including:
- To present their findings at the ICCO Semi-Annual meeting.
- To participate in a meeting between the government and academia to help prepare the National Strategic Plan.
- To participate in the 18th Grand Public Council to meet and discuss migration issues with representatives of government ministries and civil organizations and to contribute towards current migration policies.
- To participate on a permanent basis in joint meetings between government organizations, international donor organizations and NGOs discussing migration policy.
- To present their results at a NISI KR round table attended by the Deputy Minister of Labor, Youth and Migration, a representative of the National Statistical Committee and other government and non-governmental organizations specializing in migration.
- To participate in the national “Youth Participation in Local Community Development” conference
From the various meetings, consultations and presentations, the team has seen that their research has implications for a variety of policy areas, namely youth, migration, agriculture and education policy.
The team’s achievements in terms of consultation and dissemination were celebrated during the 2015 PEP Best Practice Awards, where they were awarded first place.
In September 2016, the team organized their national policy conference in Bishkek. The event attracted key government representatives for the Ministry of Economy, the Ministry of Labor and Social Development, and for the State Agency of Migration. Representatives of the National Statistical Committee, the National Institute of Strategic Studies of the Kyrgyz Republic, the World Bank Kyrgyzstan, the ICCO Corporation and the academia also attended.
The state and national government representatives stated their agreement with the recommendation to reform education and training programs to reduce the probability that youth become unpaid family workers. It was also suggested that current programs should be expanded to cover a larger geographical area.
A number of journalists from regional and national newspapers, television channels, radio stations and current affairs websites reported from the event. In particular, the Piramida television channel broadcast a report of the team’s findings and the conference discussions to a national audience. The findings and research implications will also feed future national television reports discussing economic and social issues in Kyrgyzstan.
Following the conference, several research institutes and consulting companies approached the PEP team leader, Kamalbek Karymshakov, about possible future collaborations. In particular, AVEP Public Fund staff expressed an interest in collaborating with the PEP team on an AVEP project to assess its education programs for youth employment.
Find out more in the PEP Impact Brief.
The project described above is one of the several projects selected for support under the PEP research and capacity building initiative for Policy Analysis on Growth and Employment (PAGE) in developing countries. The PAGE program is co-funded by UK's Department for International Development (DFID) and Canada's International Development Research Center (IDRC).
This particular project was selected in May 2014, following the first of three competitive calls for proposals of the PAGE initiative. A total of 65 projects have been selected for support under the three PAGE funding rounds. Find out more