The Impact of Remittances on Labor Supply : The Case of Jamaica
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 unemploy...
| Main Author: | |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/02/7348352/impact-remittances-labor-supply-case-jamaica http://hdl.handle.net/10986/7152 |
| Summary: | 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. |
|---|