Rural Labor Mobility or Intersectoral Migration of Tajikistan from Agricultural Sector to Non-Agricultural

Tajikistan is a landlocked low-income country in Central Asia with a population of 7 million, and per capita income of US$410 (Atlas method, 2007 according to the world bank. The economy growing on average at 8 percent during 2000-06, rely heavily on exports of agricultural products such as cotton and aluminum, and on growing remittances of migrants to Russia (estimated at 36 percent of GDP in 2007) and poverty although decreasing gradually remains very relatively high. In 2005, the headcount was 57 percent using poverty line of US$ PPP 2.15/day5.

Since market transition in 1991, Tajikistan has experienced high levels of migration. Early emigration was motivated by war and the conflicts following independence, while more recent migration has been motivated by economic factors. Labor migrants’ remittances have played an important role as one of the drivers of Tajikistan’s robust economic growth during the past several years. The amount of remittances has significantly increased since 2001 and now is about USD 1.5 billion (36% of GDP) in 20075. Remittances have become the most important source of external financing for the balance of payments, have increased incomes, and as a result helped reduce poverty.
During 1990 and 1997 Tajikistan had civil war which negatively effected on labor market of transition. Thusdata on that period both on the labor market and agricultural as well as industrial sector may not be accurate(Geraint Johnes,2002).Since the economy has small industry base ,it accounts for small amount of share of employment in the economy. By the end of 1999,most of small scale had been privatized and by the same date half of the arable land was in private hand according to G. Johns. On other hand, unemployed low-skilled labor in its rural areas increased than the other non-agrarian sectors since probability of unemployment occurrence has inverse relationship with their low education(Alena Nesporova).

The study nature and pace of intersectoral migration of rural labor force from agricultural sector to none – agricultural one is particularly important for Tajikistan rural areas. Since it is facing high rate poverty and structural unemployment in its rural areas where more than 70% of population reside and where agricultural sector provides 60% of employment of the country(Zvi Lerman,2005). It would be argued here that intersectoral migration as the inflow of rural labor to urban one can prevent further overpopulation and increase productivity of agricultural labor resulting in lower poverty rate through optimization of Tajik labor market while the outflow of rural labor can further decrease productivity of rural labor. Since rural over population and material stagnation has already distinguished Tajikistan by its highest labor intensity
and lowest agricultural productivity before 1990 according to Patnaik.

In Soviet time, surplus of the rural labor force preferred to be employed in collective farms by being involved in household and private subsidiary farming than migrating to non-agricultural sector which had average wage than that of agriculture(Patnaik,1995).However, it should be the sectoral income or wage differential was not high enough to increase rural inflow to none-agricultural sector(Table 6).

In addition to this Patnaik argues that the intersectoral migration occurs only when economic mechanism combined with social and cultural ones are implemented through social and economic polices. In particularly, it has been argued that reallocation of rural labor will cause educational and cultural change(Patnaik,1995). On other hand, the absence of free market conditions and full employment ideology causes inefficiency of machine use , maintenance of machines and acquiring skill according to Patnaik. For example,the level of manual labor use in agriculture amounted to 85% or 4215 professional-technical school graduated could not find job in agricultural sector(Pataik,1995).It can inferred that the higher unemployment rate in agriculture despite higher number of agricultural specialists if they are not employed
resulting in low agricultural productivity. It should be noted that Patnaik does not highlight any major intersectoral migration as key determinant that could effect intersectoral rural migrant decision before 1990.

This small intersectoral migration of rural labor force due to collectivized agricultural sector was mentioned before the collapse of economic planning system by Thomas Herzfeld and Thomas Glauben. After economic refoms resulting decollectivization, privatization of land and assets, adjustment of relative prices and liberazation of labor market agricultural share of total labor increased more than 50% in Tajikistan(Thomas Herzfeld and Thomas Glauben,2006).Since worsing economic conditions and food security ,the optimal choice for many unemployed urban household was migrate to the rural areas (Swinnen and Macaurs).In other word, agricultural sector was functioning as buffer from poverty.

Under economic development, structural change, economic reform in agriculture, the rate of process of intersectoral migration and its determinants were studied by Mundlak. The role of intersectoral mobility is to decrease surplus of labor where its rate is important to determine an inflow of rural labor force to nonagricultural sector(Mundlak).It was claimed that if income differential exists between non-agricultural sector and agricultural sector then the migration goes up according to Mundlak .It implies that the higher per capita in Tajikistan then the lower share of agricultural labor in total is. It can be suggested that increase in agricultural value added in GDP will fuel the migration to nonagricultural sector since while analyzing cross-country per capita and agricultural share in total labor force data, the clear inverse relationship between the two were found. Thus chief determinant of the migration is income differential between those sectors(Mundlak,1997).

Further, Mundlak argues that income is more accurate than wage measurement of sectoral spread differences as determinant of the migration .In addition to this while developing theoretical framework the following assumption have been made(Mundlak,1997):

1. Only economically active population under 40 should be taken as potential agricultural labor migrants to non-agricultural sector(Age)

2. Potential agricultural labor migrants have no financial dependents;

3. Education of the potential agricultural labor migrants in term years(Eunder 40); 4. Distance to employment opportunities(Cdistance);

5. Amount of information available to potential agricultural labor migrants about costs and opportunities on non-agricultural sector such as employment probability(Eprobablity) in nonagricultural sector; expected income(Isectoral diff);

The relationship of the above given determinants with migration rate as dependent is the function of the above given independent variables can be expressed according to the model in the following way:

Mintersectoral=F(Lunder 40 ,Eunder 40,Cdistance,Isectoral diff)

Further, intersectoral rural labor force migration were explained from theory of pf labor supply to determine the motive of the possible migrant which is maximize his or her utility which depend on consumption and leisure:

Vn=V[wn,Cost of Migration,Age...)]> V[wa,Age..)]=Va ,

where n reprsents urban while a represents agricultural area;
The original utility of a given migrant before moving from rural area should be equal or smaller to migrate from agricultural sector to non agricultural one . In addition to this the function of migration(h) of migrant (i)was introduced and it takes value of 0 if Vi()- Vi(a)<0>0 meaning a potencial rural migrant does benefift from migration :

[Vi(n)- Vi(a)]*hi(a,n)>= 0 (1)

The above given unequal equation holds true for the period of communism, it can be implied that their utility difference was about zero thanks to relatively high life standard resulting in the low migration at that time. Whereas from 1990 to benefits of moving to rural area was higher than urban area causing negative
migration according to the equation(1). The speed and degree of reforms has positive relationship with the migration of the rural labor force(Thomas Herzfeld and 2006).In addition to this ,it was pointed out that the main determinants of intersectoral migration are income ratio between sectors, the growth of non-agricultural employment, and unutilized capacity in non-agriculture sector(Mundlak).

Source:
cOwn calculations.and data taken from International Labour Organization
dhttp://en.wikipedia.org/wiki/Education_in_Tajikistan
bPeriod Civil War in Tajikistan with the massive unemployment:http://en.wikipedia.org/wiki/Tajikistan_Civil_War .
aUsed data to calcluate sectoral wage difference from the above given table 1
It is clear from the table that from 1950 to 1990 rural migration to urban areas such as Dushanbe,Khujend was not large enough for migration to occur which was was observed at that period. Whereas from 1990 to 2000,although the sectoral income ratio is much higher than period of communism,the huge unemployment or probability of finding job in urban area was very low. Thus, this caused migration to the opposite direction from urban area to rural area to survive.

Regression analysis

The regression analysis shows the prevailing positive effect of share of workers under age of 40 with intercept of 23.74 showing big migration potential from rural to urban area. Whereas negative sign of intercept of intrasectoral income will explained by relative small income difference from 1950 to 1990.The effect of number of years was zero and it can be explained by its being constant from 1950 to 2000.

Summary

The main obstacle of studying its rural labor migration was the lack of data for space of decades since migration rate trend is more visible for long run. Education level and number of economically active rural labor force under 40 will give positive incentive to the intersectoral migration but demand of labor force of the small industrial base and transportation infrastructure, very small GDP per capita will be the greatest obstacles to allow surplus of agricultural labor force to move to non agricultural sector.
Negative migration rate was observed due to lagged reforms on restructuring agricultural sector. The effect of institution migration equation do not account higher education of the economically active labor force under40 since the equation just count only includes number of years in formal school but not education attained after their finishing secondary school.

The role or significance of income difference of urban and rural area as only factor affecting Tajik migration may downplay the impact of the other independent variable of cost of migration ,unemployment etc. due to the lack of data while applying intersectoral migration model. Thus, the impact of these variables would be required to be studied if we want to know how to get positive migration from rural area to urban area in Tajikistan.

Reference

1. “A Tajik Story: the labor market following war and transition”. Authors: Geraint Johnes, 2002.
Published by: Economic Systems.
2. “Labor Mobility in transition countries and the impact of institutions”. Authors: Thomas Herzfeld,
Thomas Glauben. Published by: Agriculture in the face of changing markets, institutions and Policies:
Challenges and Strategies.
3. “On the intersectoral migration of Agricultural Labor”. Authors: Doland Larson. Published by:
University of Chicago Press
4. “Unemployment in the transition economies”. Authors: Alena Nesporova. Published by:
Employment Strategy Department, International Labour Office, Geneva
5. World Bank. Country Tajikistan. http://web.worldbank.org
6. On the Intersectoral Migration of Agricultural Labor. Donald Larson and Yair Mundlak. Economic
Development and Cultural Change, Vol. 45, No. 2 (Jan., 1997), pp. 295-319
7. Agriculture and Rural Out-Migration in Central Asia, 1960-91.Ajay Patnaik.Europe-Asia Studies, Vol.
47, No. 1 (1995), pp. 147-169