TY - JOUR

T1 - Island idleness

T2 - Investigating the impact of remittances on labour market participation in Comoros

AU - Keller, Michael

AU - Mulangu, Francis

N1 - Publisher Copyright: © 2023 John Wiley & Sons Ltd.

PY - 2023

Y1 - 2023

N2 - The labour market is fundamental for economic growth, which makes an in-depth understanding of its dynamics crucial for development and poverty reduction. One determinant of labour market outcomes are remittances. Remittances can influence the decision of an individual whether to participate in the labour market or not, which makes it necessary to understand this relation. In this study we assessed the impact of remittances on the labour supply in the Comoros, the second largest recipient of remittances as a percentage of Gross Domestic Product (GDP) in Africa, by using propensity score matching and national household surveys for 2014 and 2020 to estimate how remittances influenced the decision to participate in the labour market. Most of our results are statistically insignificant; that is, individuals receiving remittances were as likely to participate in the labour market as non-receivers. Remittances did not influence the unemployment rate and the number of hours worked. On the other side, we found that the type of work was influenced overall by remittances with remittances receivers being more likely to engage in informal work, being more likely to be self-employed and finally being less likely to engage in wage work. We further find some heterogeneity across the origin and the amount of received remittances. Foreign remittances can explain better the few significant results than domestic remittances and high remittances receivers influenced the labour participation rate, while low and medium remittances receivers explain better the impact of remittances on hours worked, self-employment and wage work.

AB - The labour market is fundamental for economic growth, which makes an in-depth understanding of its dynamics crucial for development and poverty reduction. One determinant of labour market outcomes are remittances. Remittances can influence the decision of an individual whether to participate in the labour market or not, which makes it necessary to understand this relation. In this study we assessed the impact of remittances on the labour supply in the Comoros, the second largest recipient of remittances as a percentage of Gross Domestic Product (GDP) in Africa, by using propensity score matching and national household surveys for 2014 and 2020 to estimate how remittances influenced the decision to participate in the labour market. Most of our results are statistically insignificant; that is, individuals receiving remittances were as likely to participate in the labour market as non-receivers. Remittances did not influence the unemployment rate and the number of hours worked. On the other side, we found that the type of work was influenced overall by remittances with remittances receivers being more likely to engage in informal work, being more likely to be self-employed and finally being less likely to engage in wage work. We further find some heterogeneity across the origin and the amount of received remittances. Foreign remittances can explain better the few significant results than domestic remittances and high remittances receivers influenced the labour participation rate, while low and medium remittances receivers explain better the impact of remittances on hours worked, self-employment and wage work.

KW - Comoros

KW - labour market

KW - migration

KW - remittances

UR - http://www.scopus.com/inward/record.url?scp=85171993463&partnerID=8YFLogxK

U2 - 10.1002/jid.3833

DO - 10.1002/jid.3833

M3 - Journal article

AN - SCOPUS:85171993463

JO - Journal of International Development

JF - Journal of International Development

SN - 0954-1748

ER -