Long-term Effects of Parental Migration on Income

Abstract

Migration is becoming increasingly common in the developing world. A growing body of literature seeks to address the effects of migration on the families of migrants; namely, the effects of migration on the children of migrants. This study uses the Indonesia Family Life Survey (IFLS) panel dataset to quantify the long-term impacts of experiencing parental migration as a child (aged 5 to 18) on the income of working Indonesian adults. To address the issue of endogenous migration, the out migration rate of an individual’s birth Kabupaten (Regency) is used as an instrumental variable. The results of this study indicate that the proposed instrumental variable strongly predicts an individual’s parental migration status. However, the wide standard errors on the coefficients of interests prohibit any conclusive remarks to be made on the effects of parental migration on future income. This study illustrates how extensive panel datasets, such as the IFLS, can facilitate analyses on the long-term effects of parental migration. The author recommends further research on the topic of parental migration be performed on other outcome variables such as education, measures of health, and subjective wellbeing.