A Note on the Labor Market Effects of Remittances in Latin American and Caribbean Countries: Do Thresholds Exist?. (March 2014)

• Record Type: Journal Article
• Authors: Jackman, Mahalia
• Is Part Of: Developing economies. Volume 52:Number 1(2014:Mar.)
• Page Start: 52
• Page End: 67
• Publication Date: 2014-03
• Subjects: Developing countries -- Economic conditions -- Periodicals; 338.90091724
• DOI: 10.1111/deve.12034
• Languages: English
• ISSNs: 0012-1533

Abstract

<abstract abstract-type="main"> <title> <x xml:space="preserve">Abstract</x> </title> <p>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.</p> </abstract>