How is migration related to informal activities? They may be complementary since new migrants may have difficulty finding employment in formal work, so many of them end up informally employed. Alternatively, migration and informality may be substitutes since migrants’ incomes in their new locations and income earned in the home informal economy (without migration) are an imperfect trade-off. Tajikistan possesses both a very large informal sector and extensive international emigration. Using the gap between household expenditure and income as an indicator of informal activity, we find negative significant correlations between informal activities and migration: the gap between expenditure and income falls in the presence of migration. Furthermore, Tajikistan's professional workers’ ability to engage in informal activities enables them to forgo migration, while low-skilled nonprofessionals without postsecondary education choose to migrate instead of working in the informal sector. Our empirical evidence suggests migration and informality substitute for one another.
Abdulloev, I., Gang, I.N. and Landon-Lane, J. (2012), "Chapter 6 Migration as a Substitute for Informal Activities: Evidence from Tajikistan", Lehmann, H. and Tatsiramos, K. (Ed.) Informal Employment in Emerging and Transition Economies (Research in Labor Economics, Vol. 34), Emerald Group Publishing Limited, Bingley, pp. 205-227. https://doi.org/10.1108/S0147-9121(2012)0000034009Download as .RIS
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