Do international remittances affect the performance of labor market in Jordan ? : an empirical investigation

Abstract EN

The current study examines the effect of international remittances on labor supply decisions of women and men left behind in Jordan.

The study draws on micro-data from the Jordan Labor Market Panel Survey in 2010, a nationally representative survey, and addresses the endogeneity of receiving remittances through an Instrumental Variable (IV) approach.

The empirical results indicate that remittances are found to have a negative and significant impact on the labor supply of both women and men.

On average, women who live in remittance-receiving households 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.

On the other hand, 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 we instrument for remittance receipt of the household, the effect of remittances on likelihood to work is found larger for both women and men.