Remittances and the Prevalence of Working Poor

Abstract : This paper focuses on the relationships between remittances and the share of individuals working for less than 2$ US per day. It is based on an original panel dataset containing information related to remittances in about 80 developing countries and to the number of workers being paid less than 2 dollars per day as well. Even after factoring in the endogeneity of remittance inflows the results suggest that remittances lead to a decrease in the prevalence of working poor in receiving economies. This effect is stronger in a context of high macroeconomic volatility but is mitigated by the unpredictability of remittances: remittances are more effective to decreasing the share of working poor when they are easily predictable. Moreover, domestic finance and remittances appear as substitutes: remittances are less efficient in reducing the prevalence of working poor whenever finance is available.
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Submitted on : Monday, April 11, 2011 - 3:11:05 PM
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Jean-Louis Combes, Christian Hubert Ebeke, Mathilde Maurel, Urbain Thierry Yogo. Remittances and the Prevalence of Working Poor. 2011. ⟨halshs-00585004⟩

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