Impacts of International Migration and Foreign Remittances on Primary Activity of Young People Left Behind: Evidence from Rural Bangladesh

Abstract

This paper investigates the impacts of international migration and foreign remittances on the primary choice of activity-labor force participation and education- of 15 to 24 year-old men and women left behind in rural Bangladesh. I use the relative sex ratio as an instrumental variable to address the problem of endogeneity of decision to migrate and remit. Using a bivariate probit model, I found that young females from left-behind households participate in the labor force less than young females from non-migrant households. The labor force participation of young males does not change, but their employment decreases. Continuation of education does not change for either of the sexes. The findings suggest that a) females spend more home-time as their households receive foreign remittances implying that “home time” is a normal good, and b) males become more selective in their choice of job and prefer to remain unemployed longer as their households receive foreign remittances.