Does Flow of Remittances Matter for Enhancing the Labor Market Behavior of the Left-Out Members? A Micro-Level Analysis in the Context of Rural Jharkhand, India

Abstract

In migration and remittance literature, considerable research has been conducted on how remittances impact the labor market behavior of family members left-out in households with migrants. However, the influence of remittance inflow on these family members left-out in households with migrants has been uninvestigated. This paper intends to bridge the gap by examining the influence of the flow of remittances on the labor market behavior of family members left-out in households with migrants in Jharkhand (an Indian state), a major source area of out-migration for economic reasons. Using cross-sectional data from 575 households across six districts, we utilize the endogenous switching probit model to analyze the influence of the flow of remittances on the labor market behavior of family members left-out in households with migrants. The study's findings suggest that (i) remittances exhibit a positive influence on the left-out members' labor market behavior, and (ii) the likelihood of heads of regular groups engaging in the labor market is high compared to their counterparts in irregular groups. These insights suggest that the regularities in the flow of remittances instill financial confidence among the left-out members, empowering them to invest in remunerative self-employed activities, which in turn generates employment opportunities in the rural labor market.