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A Note on the Labor Market Effects of Remittances in Latin American and Caribbean Countries: Do Thresholds Exist?

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  • Mahalia Jackman

Abstract

type="main"> The labor market effects of remittances have long been examined in the empirical literature. To date, the results have been mixed: some authors observe a negative association between remittances and unemployment while others report that remittances increase unemployment. This study empirically examines the impact of remittances on unemployment using macroeconomic data for a sample of 18 Latin American and Caribbean countries. Specifically, the study tests whether there is a nonlinear relationship between the variables. Results suggest that when the remittance-to-GDP ratio is low, remittances have a positive and significant impact on unemployment. However, as they increase, remittances are negatively associated with unemployment. This suggests the possibility that estimations based on the assumption of a linear relationship between remittances and labor may mask the true relationship between the variables.

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  • Mahalia Jackman, 2014. "A Note on the Labor Market Effects of Remittances in Latin American and Caribbean Countries: Do Thresholds Exist?," The Developing Economies, Institute of Developing Economies, vol. 52(1), pages 52-67, March.
  • Handle: RePEc:bla:deveco:v:52:y:2014:i:1:p:52-67
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    File URL: http://hdl.handle.net/10.1111/deve.12034
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    Cited by:

    1. Ivlevs, Artjoms, 2016. "Remittances and Informal Work," IZA Discussion Papers 10196, Institute of Labor Economics (IZA).

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