2007年-世界发展银行全球_The_Impact_of_Remittances_on_Labor_Supply___The_Case_of_Jamaica_18页_333kb

Summary of "The Impact of Remittances on Labor Supply: The Case of Jamaica"

Core Content

This paper explores the relationship between remittances and labor supply in Jamaica, focusing on how remittance income influences labor market participation and reservation wages. It addresses the puzzle of persistently high unemployment despite rising real wages in the country over the past decade.

Main Trends in Jamaica's Labor Market

• Slow Employment Growth: Since the early 1990s, overall employment has grown at a rate of only 0.3% per year, indicating a weak job market.
• Declining Labor Force Participation: Domestic labor force participation has decreased, with both men and women showing a steady decline.
• High Unemployment: Unemployment rates have remained around 10% for most of the 1990s and early 2000s, with women experiencing double the unemployment rate of men.
• Poverty and Gender Disparity: Female-headed households account for about two-thirds of poor households, and per capita consumption in these households is significantly lower than in male-headed ones.
• Labor Market Inefficiency: The coexistence of high unemployment and rising real wages suggests a poorly functioning labor market.

Real Wage Trends and Productivity

• Rising Real Wages: Average real weekly earnings in Jamaica increased more than double from 1990 to 2002, despite no significant increase in labor productivity.
• Education Returns: The return to education in Jamaica is high, but it has declined slightly in recent years. The return rate is among the highest in Latin America and the Caribbean, but not increasing further.
• Aging Labor Force: The labor force has aged, with the share of workers under 35 decreasing from 47% in 1990 to 42% in 2002, contributing to higher reservation wages.

Role of Remittances

• High Remittance Inflows: At least 25% of Jamaican citizens live abroad, primarily in the U.S., Canada, and the U.K. Remittances account for more than 6% of total household income by the early 2000s.
• Impact on Labor Supply: Remittances have a negative impact on labor market participation, with recipients more likely to withdraw from the labor force.
• No Impact on Working Hours: Remittances do not significantly affect the weekly working hours of employed individuals, suggesting that the effect is more on participation than on hours worked.
• Reservation Wage Increase: Households receiving remittances tend to have higher reservation wages, reducing the supply of labor in the domestic market.

Empirical Analysis

• Data Sources: The study uses data from the Survey of Living Conditions (SLC) and Labor Force Survey (LFS), though these do not provide longitudinal data.
• Methodology: A pseudo-panel data approach is used to analyze the effect of remittances on labor supply at the cluster level.
• Cross-Sectional Analysis: Shows a negative correlation between remittances and labor market participation at the individual level (-0.036).
• Cluster Level Analysis: Confirms the negative impact of remittances on labor participation but not on working hours. The effect is strongest for current remittances.
• Control Variables: Average education level, household size, and the share of poor people are included as control variables, but their impact is not statistically significant in all models.

Key Findings

• Remittances and Labor Participation: There is a consistent negative relationship between remittance income and labor market participation across both cross-sectional and pseudo-panel analyses.
• Remittances and Reservation Wage: Households receiving remittances have higher reservation wages, leading to reduced labor supply.
• Gender Differences: Female-headed households are more likely to reduce labor supply due to remittances, indicating gender-specific impacts.
• Competitiveness Concerns: High remittances may reduce the competitiveness of the Jamaican economy by increasing reservation wages and decreasing labor supply.

Conclusion

The paper concludes that remittances significantly affect labor market participation in Jamaica, but not the working hours of employed individuals. This suggests that remittances may be raising reservation wages, thereby reducing labor supply and contributing to high unemployment. The findings highlight the need for policies that address the structural issues in the labor market, including the impact of remittances on labor supply decisions.