وجوه ارسالی و سرمایه انسانی کودکان: شواهد جدید از قرقیزستان در انقلاب و بحران مالی، 2005-2009

We analyze the effect of the receipt of remittances on the education and health of children in Kyrgyzstan during a volatile period of their recent history, 2005–2009. The country experienced revolution in 2005 and the global financial crisis beginning in 2008. Both events impact human capital investment, and the changes vary by region of the country. We use fixed effects estimation and fixed effects, instrumental variables estimation to isolate the effects of remittances and other events on human capital. We find that boys aged 14–18 in remittances’ receiving households are less likely to be enrolled in school than other children. We also find that girls in remittances’ receiving households are more likely to be malnourished (thin). Both effects are relatively small. Remittances do not improve the human capital of children left behind. However, we do find an overall positive improvement in school enrollment among young children between 2005 and 2009 but a negative trend in enrollment among older boys and girls. Nutrition improves over time. Regional differences are apparent in these trends in nutrition and education.

The Central Asian region of the former Soviet Union is a laboratory for the study of migration and its social and economic effects on households and communities. Within the region, the small impoverished country of Kyrgyzstan experienced all of the economic, political and social volatility that theory suggests motivates internal and external mobility. For centuries, household mobility among nomadic herders was a defining characteristic of the Kyrgyz ethnic group. This tradition ended during the Soviet era, and ethnic groups settled or moved involuntarily (Anderson and Mirkasimov, 2010 and Turdalieva, 2009). After the dissolution of the Soviet Union in 1991, labor markets throughout the region transitioned from central planning to more market-orientation (ILO, 2008). Migration was no longer controlled by the central government in Moscow, and many non-native ethnic groups found it in their interest to move back to their original countries (Korobkov, 2007). The labor market changes that occurred with independence and the reduction in subsidies from the Soviet state in the 1990s led to job losses, widening income inequality, and more uncertainty about the standard of living in Central Asia. Market wages in the countries of Central Asia were relatively low, and unemployment was high in comparison to Russia (National Statistical Committee of the Kyrgyz Republic, 2011). Migration from Central Asia in the 21st century was motivated almost entirely by economics (Davis et al., 2010). Easier entry and exit into Russia facilitated the migration flow from Central Asia (Korobkov, 2007). Today the main motivation for migration is the persistent and large wage gap with Russia, Kazakhstan, and the Middle East. Russians on average earned 462US$ per month in 2007 in comparison to the Kyrgyzstan average monthly income of 84US$ in 2007 (ILO, 2012). The economic disparity in the region makes Kyrgyzstan one of the leading migrant sending and remittances’ receiving countries in the world; it ranked twelfth in the world in the ratio of remittances to GDP in 2009, a rapid increase from 30th place in 2004 (Ratha and Xu, 2011). Kyrgyzstan experienced two recent political upheavals that affected labor markets and migration. In 2005, the corrupt government of President Askar Akayev was overthrown. The precipitating event for this revolution (often called the “Tulip Revolution”) was the rigged election in 2005 in which only six opposition candidates got seats in the 75 seat Parliament. The United Opposition staged mass protests in the South, and these demonstrations spread to the capital city in the North, Bishkek. The White House was stormed, and the President fled. The leader of the United Opposition, Kurmanbek Bakiyev, became the temporary then permanent head of government (KIC, 2011). The Bakiyev regime that replaced the Akayev government was even more corrupt (Cohen, 2010). In April 2010, almost five years to the day of the 2005 Revolution and during the severe global financial crisis, the Bakiyev government was overthrown in a violent confrontation between the security forces of the government and private citizens. The precipitating cause of this revolution was the large increase in utility prices, including the prices of cell phone service, electricity, and heating.1 Other causes linked to the overthrow of the government were the rigged elections of 2007 and 2009, inter-ethnic rivalry (Steiner and Esenaliev, 2011), and endemic corruption; the government was described as a “family controlled business” by the Kyrgyzstan Inquiry Commission (2011, p. 12). With the formation of an interim government, ethnic tensions emerged; the Kyrgyzstan Inquiry Commission attributed part of this disruption to the failure of the Provisional Government to provide stability and protection for minority groups in the South or to integrate all ethnic groups into the new political structure (KIC, 2011), The difficult economic conditions in the country in 2010 and the disparity between the wealth and income of Uzbek and Kyrgyz households in the rural areas of the country (in favor of Uzbeks) fomented inter-ethnic rivalries, and in July 2010 ethnic riots raged primarily in the south of Kyrgyzstan (Steiner and Esenaliev, 2011). 400,000 people were displaced and 300 were found dead; the majority of the dead and displaced were Uzbeks (Solvang and Neistat, 2010). International institutions reported that mostly women and children had to leave their homes during the riots but returned after a short-period of time (UNHCR, 2011 and UNOCHA, 2010). The Kyrgyzstan Inquiry Commission (2011) reported widespread human rights abuses and crimes against humanity. The recent global financial crisis began two years before the overthrow of the Bakiyev government. The crisis had an immediate economic impact in the financial centers of the world including Russia, and many immigrants in Russia returned to Central Asia (USAID, 2009). Fig. 1 graphs aggregate data on official net migration from and remittances to Kyrgyzstan and Tajikistan before and after the financial crisis began. Emigration from Kyrgyzstan increased from 1999 until 2008, then dropped sharply; by the end of 2009, however, the net migration rate had returned to the 2007 level. There was little change in the official emigration rate from Tajikistan. The trend in the net migration rate of all migrants to the Russian Federation is consistent with the Kyrgyzstan pattern; net immigration increased from 2004 until 2008, then tapered off. Reported remittances to Kyrgyzstan and Tajikistan as a percent of GDP dropped sharply after 2008 but rebounded after 2009. The 2009 remittance rate (official transfers) was about 30% for Kyrgyzstan and 50% for Tajikistan. The remittance rate was affected by the decline in GDP in Central Asia and the change in remittances received. Full-size image (92 K) Fig. 1. Macro data on migration and remittances in the CIS region. Figure options The political and economic events between 2005 and 2010 increased uncertainty about the future economic development of the country and affected household labor supply, consumption and investment decisions. In this paper, we use the longest panel data set in Central Asia to evaluate how the changes in recent migration affected one measure of well-being in Kyrgyzstan – human capital investment in children. We examine these changes in human capital over the volatile 2005–2009 period. We use fixed-effects (FE) modeling and instrumental variables (IV) estimation to measure the impact of international transfers on the education and health of children left behind. Education and health of children are two important indicators of future capabilities and are now included regularly in multidimensional poverty measurements (Alkire and Santos, 2010). Many theories suggest different ways that migration and remittances can affect investments. Migration and remittances can promote human capital development (Calero et al., 2009); this occurs largely through an income effect. In other models, migration and remittances discourage human capital investment (McKenzie and Rapoport, 2011). This usually results from the loss of household labor to migration and the need for children to engage in household chores and to work in family businesses or farming. In addition, differences in expectations for girls and boys may encourage remittance-receiving households to focus their attention on one sex over the other. Overall, the predictions from the theoretical models are ambiguous. From our empirical results, we find more negative effects of remittances on human capital investment than positive effects. We attribute these effects to the loss of adult labor in the household. Our data do not allow us to identify separately migrant and non-migrant households; remittances’ receipt is an imperfect proxy for a migrant household because there are remittance-receiving households without migrant members and migrant-sending households that do not receive remittances. Our results, however, suggest that older children aged 14–18 in receiving households are less likely to be enrolled in school, and young children in receiving households are more likely to be severely thin than children in non-receiving families. We find no effects on school enrollment of all children aged 6–18, which can be attributed to the high overall school enrollment level in the Central Asian region. Our study shows that remittances to Kyrgyzstan have not been used to promote human capital development, but there is some evidence from evaluation of data from the same surveys that investment in durable goods increases with remittances (Ukueva and Becker, 2010). While physical capital investment and durable consumption are important to well-being, human capital investment is critical for long run development. Our results suggest that the large outmigration from Kyrgyzstan has not promoted this important component of development.

We examine the role of domestic transfers and international remittances on household decisions to invest in children’s human capital in one country of Central Asia – Kyrgyzstan. Using five waves of the Kyrgyzstan Integrated Household Surveys, we estimate the effect of remittances on children’s education and health outcomes. To our knowledge, this is the first empirical work examining the impact of international remittances on children’s human capital outcomes over time in Central Asia using panel data analysis. Remittances from abroad are widely believed to improve the well-being of recipient households and household members (Calero et al., 2009 and Edwards and Ureta, 2003). However, remittances are usually received by a household with at least one migrant; the loss of adult labor (especially parents) to international migration can have negative effects on the children in the household. We find that education for boys aged 14–18 is negatively affected by remittances’ receipt. Remittances’ receipt is also negatively associated with nutritional outcomes of younger girls who are more likely to be malnourished if they live in a transfer receiving household. Our results can partly be explained by the fact that the absence of a migrant household member especially a parent can exert pressure on remaining household members, mostly children and women, to contribute more of their time to household and market work. Children may also be less supervised when a parent is absent and may feel the need to start working to contribute to the household’s income. Our explanatory remittances variable measures additional income received by the household which is correlated with the absence of at least one family member to migration. Our data do not allow us to identify labor migrants, and remittances proxy for additional income and labor migration in a household.14 Because migration in Kyrgyzstan is male-dominated, boys in particular may be motivated to leave school to start working abroad, where expected wages are higher. Ukueva and Becker (2010) find that transfers are invested in durable goods. This might also be another reason why we do not find a positive relationship between remittances and human capital investment; transfers are first invested in physical not human capital. We cannot test either of these possible explanations for our human capital results with the KIHS data, and we are aware that the problem of identification cannot be fully solved by using FE estimation methods. The examination of channels through which transfers and migration may affect children’s schooling is left for further research with better data. From a policy perspective, our results suggest that children in migrant households may not be better off on average than other children. Policies that support families with migrants can motivate households to invest in children even when labor is in short supply. Assistance in schools and health care centers particularly in the poorer regions of the country would be appropriate to lessen the longer-term, negative effects of emigration on the education and health of children left behind. Human capital investment is required for long run growth in our increasingly technological world. Migration without investment in our children is not a sustainable strategy for economic and social development.