Remittances and the Prevalence of Working Poor
This paper focuses on the relationships between remittances and the share of individuals working for less than 2$ US per day. It is based on an original panel dataset containing information related to remittances in about 80 developing countries and to the number of workers being paid less than 2 dollars per day as well. Even after factoring in the endogeneity of remittance inflows the results suggest that remittances lead to a decrease in the prevalence of working poor in receiving economies. This effect is stronger in a context of high macroeconomic volatility but is mitigated by the unpredictability of remittances: remittances are more effective to decreasing the share of working poor when they are easily predictable. Moreover, domestic finance and remittances appear as substitutes: remittances are less efficient in reducing the prevalence of working poor whenever finance is available.
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- Amuedo-Dorantes, Catalina & Pozo, Susan, 2004. "Workers' Remittances and the Real Exchange Rate: A Paradox of Gifts," World Development, Elsevier, vol. 32(8), pages 1407-1417, August.
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