The effect of international remittances on labour supply in Jordan: an empirical investigation

Abstract

PurposeThe purpose of the current study is to examine the effect of international remittances on the labour market participation of women and men left behind in Jordan. The study particularly focuses on the labour supply side for both women and men.Design/methodology/approachThe study draws on micro-data from the Jordan Labour Market Panel Survey (JLMPS) in 2010, a nationally representative survey, and addresses the endogeneity of receiving remittances through an Instrumental Variable (IV) approach.FindingsThe empirical results indicate that remittances are found to have a negative and significant impact on labour supply of both women and men. On average, women who live in remittance receiving household are about 5% points less likely to perform any market work, 3% points less likely to be in wage employment and about 8% points less likely to be engaged in own work. While, men who live in remittance receiving household are about 25% points less likely to perform any market work, 5% points less likely to be in wage employment and about 10% points less likely to be engaged in own work. When the author instruments for remittance receipt of the household, the effect of remittances on likelihood to work is found larger for both women and men.Originality/valueWorkers' remittances are considered as one of the vital financial sources for many households in labour exporting countries, most of the investigation on the effects of such financial flows concentrate on the macroeconomic effects. It is therefore important to conduct empirical investigation to fairly and accurately evaluate the impact of these flows on the Jordanian labour market at a microeconomic level.

International Remittances and the Labour Market in Peru

“…Similar results were found by Dermendzhieva (2009), Murakami et al (2021), Petreski et al (2019), Al-Assaf (2016), Dey (2022) , Arouri and Nguyen (2018), and Rodriguez and Tiongson (2001) for countries such as Albania, Tajikistan, Macedonia, Jordan, India, Egypt and Philippines, respectively, where the labour supply of the members left behind was reduced. In some countries, the effect is concentrated in men (Albania and rural India) while in others it is more common in women (Macedonia and Philippines).…”

The Effects of Migration on Unemployment: New Evidence from the Asian Countries

“…An increased rate of globalization is associated with unemployment due to its social and economic effects [4]. While the impact of migration on the economy has been addressed extensively in economics and politics [5,6], there is still no consensus on the impact of immigration on the labor market [7,8].…”

“…[19] revealed that migration and emigration positively impact unemployment, especially youth unemployment. Our literature review indicates that this important relationship has largely been ignored in the current literature for the Asia region [7,20].…”