Impact of rural-urban migration on farm productivity across farm sizes: evidence from Assam in Northeast India

Abstract

Purpose While rural–urban migration is a universal phenomenon and people migrate for various reasons, the process of migration can have its effect on the left-behind family and the place of origin. The effect of such migration on the place of origin may be either positive or negative, depending on the amount of remittances sent by the migrant workers back home, type of activities on which these remittances are used and availability of labour back home, etc. The New Economics of Labour Migration (NELM) theory asserts that labour migration may have a negative effect on farm productivity initially through labour loss effect, which can be overcome through the inflow of remittances and their proper utilisation. This study aims to investigate whether rural–urban labour migration in Assam lends support to the theory of NELM or not. Design/methodology/approach This study is entirely based on primary data collected from 284 households from four districts of Assam in Northeast India. These districts are selected based on parameters, such as district-wise share of cultivators in the total workforce, district-wise contribution of agriculture and allied activities in district gross domestic product and district-wise percentage of migrant households. The study makes use of the three-stage least squares (3-SLS) method to jointly determine the factors influencing migration and remittances and their impact on the farm productivity of different farm sizes. Findings The results of the study show that remittances received by the households have a positive impact on farm productivity, whereas migration has a negative impact. This suggests that the negative effect of migration on productivity is offset by the remittances received by the households. The findings of the present study lend support to the NELM Theory, which states that migration results in productivity loss in agriculture by way of reduction in family labour. However, the inflow of remittances has its positive impact by enabling farm households to use hired labour to compensate for the loss of family labour in agriculture, which finally results in increased land productivity. The study has also found that the impact of remittances on productivity is higher among the relatively large farm holders compared to small land holders. Research limitations/implications The major limitation of the study relates to the size of the sample taken up. The present study was carried out with the help of primary data collected from four districts in Assam. However, as there was no previous data to identify a migrant, we had to rely on snowball sampling. The process does not allow one to estimate the total number of migrants in the districts (population). Thus, it was not possible to determine the size of the sample with an ideal statistical formula. We had to rely on judgement rather than on any statistical formula to decide on the sample size. Originality/value The study examines the impact of migration and remittances on agricultural productivity in Assam with reference to varying land holding sizes with the help of the method of 3-SLS, which has not been done by earlier studies.