Do Worker Remittances Reduce Output Volatility in Developing Countries?

Ralph Chami, Dalia Hakura and Peter Montiel

Journal of Globalization and Development, 2012, vol. 3, issue 1, 25

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.

Keywords: remittances; output volatility; developing countries (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (51)

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Related works:
Working Paper: Do Worker Remittances Reduce Output Volatility in Developing Countries? (2010)
Working Paper: Do Worker Remittances Reduce Output Volatility in Developing Countries? (2010)
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DOI: 10.1515/1948-1837.1151

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