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


  • Kim, Namsuk


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.

Suggested Citation

  • Kim, Namsuk, 2007. "The impact of remittances on labor supply : the case of Jamaica," Policy Research Working Paper Series 4120, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4120

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    1. Duryea, Suzanne & Hoek, Jasper & Lam, david & Levison, Deborah, 2005. "Dynamics of child labor : labor force entry and exit in urban Brazil," Social Protection and Labor Policy and Technical Notes 32744, The World Bank.
    2. Lorenzo Guarcello & Fabrizia Mealli & Furio Rosati, 2010. "Household vulnerability and child labor: the effect of shocks, credit rationing, and insurance," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 169-198, January.
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    Cited by:

    1. Ghazi Ibrahim Al-Assaf, 2016. "Do International Remittances Affect the Performance of Labor Market in Jordan? An Impirical Investigation," Working Papers 1014, Economic Research Forum, revised Jun 2016.
    2. Arouri, Mohamed & Ben Youssef, Adel & Nguyen, Cuong, 2017. "Does urbanization reduce rural poverty? Evidence from Vietnam," Economic Modelling, Elsevier, vol. 60(C), pages 253-270.
    3. Lim, Sokchea & Morshed, A.K.M. Mahbub, 2015. "International migration, migrant stock, and remittances: Reexamining the motivations to remit," The Quarterly Review of Economics and Finance, Elsevier, vol. 57(C), pages 101-115.
    4. Görlich, Dennis & Omar Mahmoud, Toman & Trebesch, Christoph, 2007. "Explaining labour market inactivity in migrant-sending families: Housework, hammock, or higher education?," Kiel Working Papers 1391, Kiel Institute for the World Economy (IfW).
    5. repec:dau:papers:123456789/14850 is not listed on IDEAS
    6. World Bank, 2010. "Cape Verde : Initial Assessment of the Formal Labor Market," World Bank Other Operational Studies 2986, The World Bank.
    7. Francisca M. Antman, 2013. "The impact of migration on family left behind," Chapters,in: International Handbook on the Economics of Migration, chapter 16, pages 293-308 Edward Elgar Publishing.
    8. World Bank, 2008. "Jordan - Resolving Jordan's Labor Market Paradox of Concurrent Economic Growth and High Unemployment," World Bank Other Operational Studies 18907, The World Bank.
    9. Leonardo Bonilla Mejía, 2016. "Choques externos y remesas internacionales en las regiones de Colombia," Documentos de trabajo sobre Economía Regional y Urbana 250, Banco de la Republica de Colombia.
    10. World Bank, 2012. "Jamaica : Poverty and Social Impacts of Fiscal Reforms," World Bank Other Operational Studies 12755, The World Bank.
    11. Mora, J.J., 2013. "Gender differences between remittances and labor participation in developing countries: A cross-section analysis of Colombia in year 2008," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 99-112.
    12. repec:eee:wdevel:v:96:y:2017:i:c:p:438-450 is not listed on IDEAS
    13. repec:eee:chieco:v:46:y:2017:i:s:p:s77-s101 is not listed on IDEAS
    14. Lim, Sokchea & Simmons, Walter O., 2015. "Do remittances promote economic growth in the Caribbean Community and Common Market?," Journal of Economics and Business, Elsevier, vol. 77(C), pages 42-59.
    15. Binzel, Christine & Assaad, Ragui, 2011. "Egyptian men working abroad: Labour supply responses by the women left behind," Labour Economics, Elsevier, vol. 18(S1), pages 98-114.
    16. Costin-Alexandru Ciupureanu, 2014. "Does Emigration Affects Wages? A Case Study on Romania," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(16), pages 177-181, December.
    17. 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.
    18. 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.

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

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