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The impact of remittances on labor supply : the case of Jamaica

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  • Kim, Namsuk

Abstract

A puzzle in the recently stagnated economy of Jamaica is that high rates of unemployment have persisted even when real wages have been increasing. This paper examines aspects of the labor supply in an effort to understand why high rates of unemployment have existed with increasing real wages. This is a sign of a badly functioning labor market. The cross-sectional analysis suggests that remittances have some impact on labor supply, especially on labor market participation. The pseudo panel data analysis also confirms that remittances have a strong impact on labor participation but not on weekly working hours. Households with remittance income have a higher reservation wage and have reduced the supply of labor by moving out of the labor force.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4120.

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Date of creation: 01 Feb 2007
Date of revision:
Handle: RePEc:wbk:wbrwps:4120

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Related research

Keywords: Labor Markets; Population Policies; Remittances; Banks&Banking Reform; Economic Growth;

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Cited by:
  1. World Bank, 2012. "Jamaica : Poverty and Social Impacts of Fiscal Reforms," World Bank Other Operational Studies 12755, The World Bank.
  2. Binzel, Christine & Assaad, Ragui, 2011. "Egyptian Men Working Abroad: Labor Supply Responses by the Women Left Behind," IZA Discussion Papers 5589, Institute for the Study of Labor (IZA).
  3. Lokshin, Michael & Glinskaya, Elena, 2008. "The effect of male migration for work on employment patterns of females in nepal," Policy Research Working Paper Series 4757, The World Bank.
  4. World Bank, 2010. "Cape Verde : Initial Assessment of the Formal Labor Market," World Bank Other Operational Studies 2986, The World Bank.
  5. Dennis Görlich & Toman Omar Mahmoud & Christoph Trebesch, 2007. "Explaining Labour Market Inactivity in Migrant-Sending Families: Housework, Hammock, or Higher Education," Kiel Working Papers 1391, Kiel Institute for the World Economy.

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