The effect of asset size on labor migration in Cambodia: Comparing factory job and non-factory job
2006
Yagura, K.(Nagoya Univ. (Japan))
In recent years, an increasing number of Cambodian rural laborers migrate to cities to work at garment factories, construction sites and so on. Remittances from migrant workers contribute to the increase in rural household income. Such a positive effect is larger for factory workers because they earn higher wages than other migrant workers. This paper examines whether migrant workers come from poorer households, with special attention to the difference between factory jobs and non-factory jobs. Through multinomial logit analysis of the determinants of labor migration using data from a Cambodian village, it was found that the fewer assets a household has, the more likely its laborers to migrate, regardless of the type of job. This means poorer households benefit from migration. Laborers from households with more assets, however, are more likely to engage in factory jobs than non-factory jobs, because those laborers have higher reservation wages and thus find it beneficial to migrate only when the wage rate is high. The results suggest that a raise in factory wage, which labor unions have demanded, can reduce employment opportunities for laborers from poorer households, because it will attract laborers from wealthier households and thereby make it more difficult for poorer laborers to get the factory job.
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