Remittances as an Insurance Mechanism in the Labor Market

Lara, Jaime

doi:10.1007/s12122-016-9226-3

Cited by 5 publications

(2 citation statements)

References 16 publications

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“…In the case of Mexico, although remittances serve as a partial insurance mechanism against job loss, their effectiveness was drastically reduced during the global shock of 2008 that affected the economies of Mexico and its main source of remittances, the United States (Lara, 2016). The limited effect of remittances on employment at the subnational level in the recent COVID-19 shock has also been documented (Ambrosius, Campos Vázquez and Esquivel, 2021).…”

Section: Introductionmentioning

confidence: 99%

COVID-19 and remittances to Mexican states

Luna¹,

Lara

Martínez³

et al. 2023

Econ Bus Lett

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With the onset of the COVID-19 pandemic and its negative effect on economic activity, a decrease in remittances was expected. However, on the contrary, remittances have increased in countries like Mexico. Using a fixed-effect model with information at the state level, this study finds evidence that the increase in COVID-19 cases was associated with a higher level of remittances to Mexican states, allowing some degree of insurance against the pandemic. However, remittances did not respond to the decrease in employment caused by the pandemic in local economies. A portion of the observed increases in remittances during the pandemic can be explained by factors at the national level.

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Section: Introductionmentioning

confidence: 99%

COVID-19 and remittances to Mexican states

Luna¹,

Lara

Martínez³

et al. 2023

Econ Bus Lett

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“…Households may receive remittances immediately following the shock, subsequently increasing their income. There is evidence of an increase in remittances following shocks such as natural disasters or weather shocks (Gubert, 2002;Yang and Choi, 2007;David, 2011;Lara, 2016). However, this ex-post mechanism is unlikely to operate in the case of shocks from a global pandemic such as COVID-19, as remittances are expected to decrease sharply (Ratha et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Do Remittances Mitigate COVID-19 Employment Shock on Food Insecurity? Evidence from Nigeria

Akim

2021

SSRN Journal

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The objective of this paper is to assess the mitigating role of remittances during the adverse COVID-19 employment shock on Nigeria's food insecurity. Based on pre-COVID-19 and post-COVID-19 surveys, we use a difference-in-difference approach while controlling for the time and household fixed effects. Results indicate that remittances are mitigating the negative consequences of COVID-19 employment shocks, especially in the short run. We find that 100% of the deterioration in food insecurity, owing to the shock, is offset by the remittances received. While the adverse effects of the shock persist over time, the mitigation effect of remittances appears to be effective only at the early stages of the pandemic, however. Furthermore, the mitigation effect of remittances seems heterogeneous regarding the origin of remittances, residence area, and poverty status. The mitigation effect of remittances is higher for remittances from abroad than for Domestic ones. We also find a higher mitigating effect of remittances in rural areas and for non-poor households. Finally, our results shed light on the capital channel as a crucial mechanism explaining the mitigation effect of remittances. Notably, findings suggest that formal financial inclusion, capital ownership like livestock or rental earnings, amplifies the attenuating effect of remittances.

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