Authors:

Abstract

Availability of external employment and resulting migration play an important role in poverty reduction in the rural areas of developing countries. Estate sector continues to play a major role in the tea industry of Sri Lanka. As fine plucking is still considered to be important to maintain the quality of the final product, shrinkage of residential work force due to out-migration of skilled laborers from formerly residential work is identified as a major problem faced by the industry. From the household perspectives, remittances from migrated members would increase household income and ultimately affect the poverty level of the estate households. Therefore, this study was conducted to investigate the impact of labor migration on poverty in estate sector in Badulla District. Assuming that the remittances are a potential substitute for household earnings within the estate, counterfactual scenarios were built to understand what household poverty would have been in the absence of migration and remittances. Results reveal that poverty incidence, depth of poverty and severity of poverty of households are reduced by 13.19%, 3.81% and 1.37% respectively due to migration and remittances. Hence, the study concludes that labor migration is an important upward driver for households in tea estates to move out of poverty. Identifying skill levels of residential workers and a remuneration policy to encourage retention of high skilled workers to continue work in the estates can be recommended. This may help to have extra income for worker households and increase the labor productivity in the estates.

Keywords: Badulla District, Migration and remittances, Poverty, Skilled based remuneration, Tea estate sector