International economics

We examine what happens to Sri Lankan men’s labour market outcomes when their wives emigrate to work and leave the husbands and their children at home in Sri Lanka—the effects of maternal migration on the husbands’ labour market decisions. We use nationally representative cross-sectional data and historical migration rates at the community level as an instrument for maternal migration in two-stage least-square estimations. We find maternal migration reduces the husbands’ labour supply. The husbands are more likely to exit the labour market and become unemployed; the employed are less likely to moonlight and have lower wages; those that exit the labour market are more likely to become stay-at-home dads. Using a second instrument, an indicator of whether a community has foreign-employment agencies, we also confirm our main results. Our findings indicate that policies that aim to promote female migration as an exogenous income source may fall short if they do not address the effects of the husbands’ labour market decisions.

We examined the effects of parental emigration on the education of the children left behind in Sri Lanka. Using access to foreign employment agencies as a source of exogenous variation in parental migration, we estimated two-stage least squares models of the children’s school enrolment, access to private tuition, class-age gap (the difference between a child’s school year and the child’s age), and educational spending. Overall, parental migration had no statistically significant effect on any of the outcomes; however, analyses by migrant gender show that the effects of parental migration were heterogeneous. When the mother migrates and the father stays behind, the education of the children worsens; when the father migrates and the mother stays behind, it improves. There is also some evidence that boys, younger children, and children of less-educated parents gain more from parental migration.

Both theoretically and empirically, childbearing decreases labour supply of females, but few papers examine the effect of children on whether women emigrate to work. Using exogenous variations in family size induced by parents’ preferences for mixed sibling-sex composition in instrumental variable estimations, we find that, in Sri Lanka where most migrants are women and mothers, children decrease labour participation of females in the domestic market but they increase the likelihood of females working abroad.

We examine the effects of the United States–Singapore Free Trade Agreement (FTA) on the value of firms listed in the Singapore Exchange using event study analysis. Despite the predictability of the FTA negotiations, we find that one event – the removal of the last obstacle to the free trade deal in January 2003 – increases the value of firms in some industries by 1–11% on average. These results indicate that trade liberalization and FTAs do increase the value of firms.

This paper provides an empirical explanation to the observed disparity in cross-border merger and acquisition inflows to developing and developed countries over the past two decades. We show two main results. First, the disparity can be attributed to the difference in the quality of institutions between the two groups of countries. Second, the gain from reforming institutions in developing countries is smaller than that in developed countries. These findings suggest that, with the current speed of institutional reforms in some developing countries, the disparity in cross-border merger and acquisition inflows is likely to persist.