Abstract

The paper investigates the informalisation of employment among male workers in Kyrgyzstan and explores how migration experience shapes labour market trajectories. Drawing on six waves of nationally representative panel data from the KGZ LiK-Study covering the period 2010-2019, the analysis applies an empirical strategy based on panel-probit models. The dependent variable indicates whether an individual transitions from formal to informal employment between survey waves. Endogeneity of migration choice is controlled by adding Mundlak (1978) corrections. Potential selection bias is accounted for through the inclusion of inverse Mills ratios, derived from a first-stage selection models (survey attrition and emploment participation) identified using an exogenous instrument. The results indicate that sectoral mobility is the strongest determinant of transitions into informal employment. However, return migrants are significantly less likely than non-migrants to become informal following a sector change. This finding suggests that migration experience may disrupt the typical informalisation trajectory. A plausible explanation is that return migrants accumulate financial resources and human capital while abroad, which may help them remain in formal employment even when changing sectors. The results are further supported by robustness checks employing propensity score matching and covariate matching methods.