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Do Worker Remittances Reduce Output Volatility in Developing Countries?
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Ralph Chami
Published/Copyright:
June 28, 2012
Abstract
The theoretical and empirical effects of remittance inflows on output volatility are ambiguous. On the one hand, remittances have been remarkably stable compared to other inflows, and they seem to be compensatory in nature, rising when the home country’s economy suffers a downturn. On the other hand, the labor supply effects induced by altruistic remittances could cause the output effects associated with technology shocks to be magnified. Based on a sample of 70 remittance-recipient countries, we find that remittances have a negative effect on output growth volatility, thereby supporting the notion that remittance flows are a stabilizing influence on output.
Published Online: 2012-6-28
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
- Research Foundation
- International Income Comparisons and Social Welfare: Methodology, Analysis, and Implications
- Do Worker Remittances Reduce Output Volatility in Developing Countries?
- Policy Analysis
- Land Deals in Africa: Pioneers and Speculators
- How Does Credit Access Affect Children's Time Allocation?: Evidence from Rural India
- The Costs and Benefits of Duty-Free, Quota-Free Market Access for Poor Countries: Who and What Matters
