International Migration, Inter-generational Linkages and Households’ Spending Behaviour in Kerala and Punjab

Abstract

Human beings always strive for a better life. Hence, people do not hesitate to leave their homeland to get better standard of living for themselves and their family. The process of emigration can contribute significantly to the socio-economic development in both the countries of origin and destination. At present, India occupies the top position in both sending emigrants to abroad and remittance receipts in the world. It received over $79 billion remittances from about 17 million emigrants staying across the countries of the World in 2018. This remittance continues to be the financial support for millions of families in India. Particularly, the state of Kerala and Punjab tops the remittance receipts. These remittances help to increased investment in both human and physical capital enormously in these states. Hence, this has helped the native inhabitants to achieve a better standard of living and in terms of development indicators, these two states are far ahead of the other Indian states. Using a household level primary survey, this study mainly focuses on how migration pattern is changing over the generations in these two states. Moreover, this study finds the effect of remittances on spending and labor supply behaviour of the household members in Kerala and Punjab. We have observed three facts about the changing migration pattern over the generations: (1) low skilled to highly skilled emigration; (2) Internal to international migration and, comparatively less developed v Asian regions to developed regions of the Global North, West Asian and Oceanian regions; (3) employment driven migration to the ‘student’ and ‘family’ type of migration. This study also observed that the households reporting remittance receipts, on the average, spend more on all types of household expenditure categories. It shows the economic betterment of the recipient households over their non-recipient counterparts. Moreover, we noticed that the labor force participation among the remittance recipients is lower as compared to the non-recipients. It is because of the reluctance to do manual type of jobs, particularly, the youth in the remittance recipient households. On the basis of these findings our study argued that a structured emigration policy is required to boost the growth of both skilled and low skilled emigration in India. This study also suggests that NRI investments can be promoted by creating a favorable investment environment in the domestic economy, as remittances play an important role in human capital formation.