This study examines the impact of migration on children left behind in terms of schooling and child labor by quantifying two aspects of migration: remittances and parental absence, in cases where the father is the migrant. The study is based on a panel analysis of data drawn from the Multiple Indicator Cluster Survey for 2007 and the Privatization in Education Research Initiative survey for 2011. The sample comprises 820 households with children aged 5–14 years. The study uses the instrumental variable (IV) approach due to endogeneity. Exogenous variation in parental absence and remittances sent by migrants from a given kinship network are employed as IVs. This, combined with household fixed effects and random effects, increases the reliability of the results. While remittances benefit the children, father’s absence has adverse consequences for them. However, mother’s presence in the house appears to compensate for the father’s absence, making the migration beneficial on net for the child. The father’s absence has worse consequences for girls in terms of increased child labor, where the money coming in through remittances has a larger impact on boys’ schooling.

As Pakistan enters the CPEC era, there is a sense of optimism as well as concern in the country, given the uncertain economic impact of this major collaboration between China and Pakistan. Using firm-level and trade data, we empirically test the impact of the 2006 free trade agreement (FTA) between the two countries on the productivity, size and value added of potentially affected Pakistani firms. These results have important policy implications for CPEC initiatives. We start with a difference-in-difference analysis, comparing trends in those sectors in Pakistan made more vulnerable by tariff reductions on Chinese goods relative to sectors for which the tariff did not change significantly. Next, we examine those sectors in Pakistan that were given greater access to Chinese markets through reductions in the Chinese tariff on Pakistani goods relative to sectors for which market access remained roughly the same. In the sectors made more vulnerable by reductions in Pakistani tariffs on Chinese goods, imports to Pakistan have risen, while productivity, value added and value added per worker have fallen relative to other sectors since the FTA. In the sectors for which Pakistan gained access to Chinese markets, exports and employment have risen, but productivity and value added have fallen relative to other sectors since the FTA.

To counter the severe trade deficit problem that Pakistan faces, we explain how to move up the value chain of exports by reducing tariff rates on the intermediate inputs used by local manufacturers. The availability of cheaper intermediate inputs through tariff reductions can substantially reduce input constraints. We begin by identifying trends in the tariff rates imposed on intermediate inputs, and their imports over time by Pakistan and its counterparts. Using an instrumental variable approach, we measure the gains that can be achieved by importing more of these intermediate inputs in terms of export performance indicators. We emphasize that input tariff reductions could help Pakistan expand exports. We also identify specific sectors in which intermediate input tariff reductions could have significant gains for Pakistan in terms of export growth. We recommend the need to reduce intermediate input tariffs in these sectors only, rather than general tariff reductions across all sectors.

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