Essays on Migration and Labor Markets

The dissertation consists of two studies on labor migration restrictions and wage inequality trends in Sri Lanka. The first study investigates how government restrictions on women’s labor migration affect women’s fertility decisions in Sri Lanka. The Sri Lankan government introduced a policy in 2013 prohibiting women from migrating for work based on their age and the age of their youngest child. These restrictions could alter fertility decisions, with women simultaneously choosing between future employment and childbearing. Using a panel dataset created from the Demographic and Health Survey in a regression discontinuity in time framework, I find that women from poor households, who are most likely to migrate, change their fertility behavior. Young women, who are already restricted from migrating based on their own age increase their fertility. Older women, who are restricted from migrating only if they have young children, reduce their fertility. As a result, new mothers are less-educated and younger, which may have an impact on child outcomes. My findings contribute to the literature on migration policies in developing countries and trade-offs between women’s employment and fertility decisions. The second study explores the wage inequality trend in Sri Lanka. Stylized facts suggest that wage inequality in Sri Lanka has increased over the 1996-2006 period, followed by a significant decrease from 2006 to 2014. Using Labor Force Survey data and a supply and demand framework, I find that an increase in the relative supply of high skilled workers alone does not explain the differential trends in wage inequality. There is a significant shift in factor demand for high skilled workers in both periods, which is countered by a higher increase in relative supply from 2006-2014, contributing to the overall decrease in wage inequality. I also find evidence for occupational upgrade among low skill workers in the later period, which could explain the higher relative wage gains of that group in the 2006-2014 period.