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 Department of Economics Working Papers with number 2010-17.
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?," Center for Development Economics 2010-01, 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:
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.:
- Geert Bekaert & Campbell R. Harvey & Christian Lundblad, 2004.
"Growth Volatility and Financial Liberalization,"
NBER Working Papers
10560, National Bureau of Economic Research, Inc.
- 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.
- Miklos Koren & Silvana Tenreyro, 2003. "Diversification and development," Working Papers 03-3, Federal Reserve Bank of Boston.
- Jihad Dagher & Ralph Chami & Peter Montiel & Yasser Abdih, 2008.
"Remittances and Institutions: Are Remittances a Curse?,"
IMF Working Papers
08/29, International Monetary Fund.
- 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.
- 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.
- 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.
- Neagu , Ileana C. & Schiff, Maurice, 2009. "Remittance stability, cyclicality and stabilizing impact in developing countries," Policy Research Working Paper Series 5077, The World Bank.
- 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.
- 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.
- 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.
- 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.
- Carl Davidson & Nicholas Sly, 2013. "A Simple Model of Globalization, Schooling and Skill Acquisition," CESifo Working Paper Series 4394, CESifo Group Munich.
- 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.
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.