Estimating the Income Gain of Seasonal Labor Migration

Male seasonal labor migration has become an increasing phenomenon globally and particularly for Armenia. This study finds that the monthly income gains for seasonal migrants from Armenia to Russia are about US$480 relative to only US$50 in the case of non-migration. Individual panel data based on a novel household survey allow controlling for a variety of socio-economic characteristics. Propensity score matching combined with difference-in-differences addresses potential endogenous self-selection into migration. This paper finds negative selection based on education, employment, and pre-migration income. This is reflected by a low premium for skills in Russia relative to Armenia, luring seasonal migrants into low-skill jobs, mainly in the construction sector. The results identify seasonal labor migration as an attractive opportunity to escape unemployment, especially for the unskilled labor force. Therefore, seasonal migration has become an increasingly important source of income for households (through remittances) from low-income countries and helps eradicate poverty.