South‐South Migration: Remittances of Labour Migrants and Household Expenditures in Uzbekistan
| Published date | 01 October 2021 |
| Author | Jakhongir Kakhkharov,Muzaffarjon Ahunov,Ziyodullo Parpiev,Inna Wolfson |
| Date | 01 October 2021 |
| DOI | http://doi.org/10.1111/imig.12792 |
South-South Migration: Remittances of
Labour Migrants and Household Expenditures
in Uzbekistan
Jakhongir Kakhkharov*, Muzaffarjon Ahunov**, Ziyodullo Parpiev*** and Inna
Wolfson***
ABSTRACT
We investigate the impact of international labour migrants’remittances on household expendi-
tures in Uzbekistan as an understudied case of South-South migration. In doing so, we use
instrumental variable regressions to address endogeneity caused by self-selection bias. We find
that remittance-receiving households spend a significantly smaller part of their budgets on food
and health. This finding contrasts with studies of South-South remittances in Africa that find
that households tend to spend most of their remittance incomes on food. Our estimations also
provide evidence that remittance-receiving households spend a larger part of their total expen-
ditures on non-food consumption. Remittances’impact on healthcare expenditures is negative
and on education expenditures is insignificant. These results support the view that remittances
in this South-South migration corridor are channelled mainly to consumer goods, limiting their
contribution to economic development.
INTRODUCTION
International labour migration and remittances in the former Soviet Union have increased dramati-
cally during the last two decades. For many post-Soviet economies, international remittances have
become a major source of foreign exchange revenue, second only to exports in terms of volume
(Kakhkharov and Rohde, 2020). With a population of about thirty-three million people, Uzbekistan
is the most populous country in Central Asia and one of the leading sources of labour migrants in
the post-Soviet area. Although Uzbek labour migrants travel for work to many other countries,
Russia is the main destination for most Uzbek labour migrants, and Uzbekistan is the top recipient
of remittances sent from Russia to the Commonwealth of Independent States (CIS) (Capannelli and
Kanbur, 2019). From 2006 until 2014s economic downturn in Russia, the recorded remittances
from Russia to Uzbekistan increased at double-digit rates, exceeding 6.6 billion USD in 2013,
approximately 12 per cent of Uzbekistan’s GDP (Central Bank of Russia, 2014). Part of this
increase was due to decreased transfer fees in Russia, and part was due to increased numbers of
labour migrants (Kakhkharov and Akimov, 2015; Kakhkharov et al., 2017).
* Flinders University, Adelaide,
** Woosong University Jayang-Dong, Dong-gu Daejeon,
*** Westminster International University in Tashkent, Tashkent,
doi: 10.1111/imig.12792
©2020 The Authors
International Migration ©2020 IOM
International Migration Vol. 59 (5) 2021
ISSN 0020-7985Published by John Wiley & Sons Ltd.
Notwithstanding this spectacular growth in international labour migration and remittances,
research seldom explores Central Asia –particularly Uzbekistan –in terms of remittances’causal
impact on household expenditures, possibly because of the lack of household-level data (Br¨
uck
et al., 2014). This paper addresses this gap by using comprehensive household-level survey data,
which is representative at the national, regional (Oblast) and urban/rural levels. The survey was
based on stratified random sampling and was conducted in 2013 by the German Agency for Inter-
national Development (GIZ) and the World Bank. The sample size for the core questionnaire is
1,500 households (8,622 individuals). The survey results show that 86.41 per cent of migrants went
to Russia, 11.93 per cent to Kazakhstan, and the remaining 2.1 per cent to Turkey, the United
States, South Korea, Israel, Kyrgyzstan, Tajikistan, the Czech Republic, Ukraine or Latvia. There-
fore, we observe a predominantly South-South migration channel in the country.
The typical Uzbek migrant works seasonally, travelling to countries that are in transition during
the warm months (Marat, 2009). This pattern is consistent with the observation that “seasonal
migration may be more prevalent in South-South migration, because borders are more porous and
agriculture weighs more heavily in the economy”(Ratha and Shaw,2007, p. 19).Figure 1, which
shows the number of work permits Russia has issued to Uzbek citizens, reveals the sharp increase
in the number of work permits after 2006 that reflects job opportunities’opening up for Uzbek citi-
zens in Russia. However, official estimates of the number of migrants in the visa-free countries of
the former Soviet Union may be misleading, as many migrant labourers migrate illegally and work
in the informal sector in Russia and Kazakhstan. This notion is supported by the suggestion that
South-South migration patterns are more irregular than those in South-North corridors and are fre-
quently undocumented (Phelps, 2014).
We contribute to the literature by contextualizing the impact of South-South labour migration
and remittances, particularly migration in the transition country-to-transition country corridor.
South-South migration makes up approximately 38 per cent of total migration, while South-North
migration constitutes about 34 per cent (Ratha, 2016). However, since South-South migrants tend
to earn less than South-North migrants do, they have less to remit (Ratha and Shaw, 2007), so
FIGURE 1
NUMBER OF WORK PERMITS RUSSIA ISSUED TO UZBEK CITIZENS (IN THOUSANDS)
68.6
281
390.3 320.7 289.7
868.9
1,153.10
1,253.90
2006 2007 2008 2009 2010 2011 2012 2013
Source: “Population and migration in the Russian Federation.”Statistical Yearbook. Moscow: Rosstat, various years.
“Monitoring of regular international labour migration in Russia.”Moscow: Federal Migration Service, various years
(Both sources are in Russian).
Remittances and Household Expenditures39
©2020 The Authors. International Migration ©2020 IOM
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