## **4.2.2 Results**

I estimate Equation (1) on NLSS-III data to assess the impact of migration of a family member on the schooling outcomes of the children aged 5-14. A rise of 10 percentage points in the probability of a household having a migrant in Gulf-Malaysia increases child school enrollment by 4 percentage points (Table 4). The impact is slightly larger for urban areas compared to rural areas, but the effects are unlikely to be statistically different. The effects are almost completely driven by the impact on girls. A 10 percentage points in the probability of the household having a migrant in Gulf-Malaysia increases school attendance of girls by 9 percentage points. The effect for boys are much smaller (1 percentage points) and are statistically insignificant. The impact on completed years of schooling follows a similar pattern, but the estimates are much noisier to be statistically significant at conventional levels. For girls, where the results are marginally significant (at 10 percent significance), an increase in 10 percentage points in the probability of migration increases girls schooling by a 0.26 years. Many of the channels noted above could be at play here resulting in the estimates being imprecise as well as heterogeneous by gender.

# **4.3 Impact on domestic labor market outcomes**

## **4.3.1 Framework**

There are several ways in which migration affects the labor supply decision of individuals. First, for individuals in a household with a migrant, there is a direct impact of migration. The increased income through remittances could increase the consumption of leisure reducing their labor supply in domestic markets. This channel has been explored in the context of Nepal in Phadera (2016) and Lokshin and Glinskaya (2009), and will not be explored in this paper.

Second, large-scale migration as in the case of Nepal, is a reduction in the total male labor supply in the domestic market. A reduction in the total amount of labor can have different implications for different genders. For males, male out-migration is a negative supply shock which would lead to higher wages for the non-migrants. This could also induce more men to participate in the labor market, which might offset some of the increases in wages. For females, the impact of male outmigration depends upon whether female labor supply is a complement, or a substitute to male labor supply. In the extreme case of them being perfect complements, male out-migration reduces the demand for female labor and lowers their wages. The opposite would be true if male and female labor are perfectly substitutable with each other. In reality, the degree of substitutability potentially differs by the sectors as well. In Appendix A, I present a very simple model to formally articulate the intuition described here. The more substitutable male and female labor supply are, female wages and participation will respond more positively to increased male out-migration.

Third, large-scale migration could mean more liquidity and greater availability of credit in the local labor market. If individuals are credit constrained to open new businesses, then migration could ease these constraints, increasing self-employment and business creation. Migration could also increase business creation through a transfer of ideas and technologies from abroad. Similarly, 12