Do Worker Remittances Reduce Output Volatility in Developing Countries?
AbstractRemittance inflows have increased considerably in recent years and are large relative to the size of many recipient economies. The theoretical and empirical effects of remittance inflows on output growth volatility are, however, ambiguous. On the one hand, remittances have been a remarkably stable source of income, relative to other private and public flows, and they seem to be compensatory in nature, rising when the home country’s economy suffers a downturn. On the other hand, the labor supply effects induced by altruistic remittances could cause the output effects associated with technology shocks to be magnified. This paper finds robust evidence for a sample of 70 remittance-recipient countries, including 16 advanced economies and 54 developing countries that remittances have a negative effect on output growth volatility, thereby supporting the notion that remittance flows are a stabilizing influence on output.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, Williams College in its series Center for Development Economics with number 2010-01.
Length: 38 pages
Date of creation: Oct 2010
Date of revision:
Other versions of this item:
- Chami Ralph & Hakura Dalia S. & Montiel Peter J., 2012. "Do Worker Remittances Reduce Output Volatility in Developing Countries?," Journal of Globalization and Development, De Gruyter, vol. 3(1), pages 1-25, June.
- Ralph Chami & Dalia Hakura & Peter Montiel, 2010. "Do Worker Remittances Reduce Output Volatility in Developing Countries?," Department of Economics Working Papers 2010-17, Department of Economics, Williams College.
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F24 - International Economics - - International Factor Movements and International Business - - - Remittances
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-05 (All new papers)
- NEP-DEV-2011-03-05 (Development)
- NEP-LAM-2011-03-05 (Central & South America)
- NEP-MIG-2011-03-05 (Economics of Human Migration)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Yasser Abdih & Jihad Dagher & Peter Montiel, 2010.
"Remittances and Institutions: Are Remittances a Curse?,"
Department of Economics Working Papers
2010-13, Department of Economics, Williams College.
- Abdih, Yasser & Chami, Ralph & Dagher, Jihad & Montiel, Peter, 2012. "Remittances and Institutions: Are Remittances a Curse?," World Development, Elsevier, vol. 40(4), pages 657-666.
- Jihad Dagher & Ralph Chami & Peter Montiel & Yasser Abdih, 2008. "Remittances and Institutions: Are Remittances a Curse?," IMF Working Papers 08/29, International Monetary Fund.
- Yasser Abdih & Jihad Dagher & Peter Montiel, 2010. "Remittances and Institutions: Are Remittances a Curse?," Center for Development Economics 2010-08, Department of Economics, Williams College.
- Matteo Bugamelli & Francesco PaternÃ², 2008.
"Output growth volatility and remittances,"
Temi di discussione (Economic working papers)
673, Bank of Italy, Economic Research and International Relations Area.
- Dalia S. Hakura, 2009. "Output Volatility in Emerging Market and Developing Countries: What Explains the “Great Moderation” of 1970-2003?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 59(3), pages 229-254, August.
- Furceri, Davide & Karras, Georgios, 2007. "Country size and business cycle volatility: Scale really matters," Journal of the Japanese and International Economies, Elsevier, vol. 21(4), pages 424-434, December.
- Aggarwal, Reena & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2006. "Do workers'remittances promote financial development ?," Policy Research Working Paper Series 3957, The World Bank.
- Neagu , Ileana C. & Schiff, Maurice, 2009. "Remittance stability, cyclicality and stabilizing impact in developing countries," Policy Research Working Paper Series 5077, The World Bank.
- Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian, 2006.
"Growth volatility and financial liberalization,"
Journal of International Money and Finance,
Elsevier, vol. 25(3), pages 370-403, April.
- Miklos Koren & Silvana Tenreyro, 2003. "Diversification and development," Working Papers 03-3, Federal Reserve Bank of Boston.
- Eduardo Fernández Arias & Eduardo Levy-Yeyati, 2010. "Global Financial Safety Nets: Where Do We Go from Here?," Business School Working Papers 2010-06, Universidad Torcuato Di Tella.
- Carl Davidson & Nicholas Sly, 2013. "A Simple Model of Globalization, Schooling and Skill Acquisition," CESifo Working Paper Series 4394, CESifo Group Munich.
- Giulia Bettin & Andrea Filippo Presbitero & Nikola Spatafora, 2014. "Remittances and vulnerability in developing countries," Mo.Fi.R. Working Papers 93, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
- Eller, Markus & Fidrmuc, Jarko & Fungácová , Zuzana, 2013. "Fiscal policy and regional output volatility: Evidence from Russia," BOFIT Discussion Papers 13/2013, Bank of Finland, Institute for Economies in Transition.
- Mthuli Ncube & Zuzana Brixiova, 2013. "Working Paper 188 - Remittances and their Macroeconomic Impact: Evidence from Africa," Working Paper Series 996, African Development Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Sheppard).
If references are entirely missing, you can add them using this form.