Remittances from Labor Migration: Evaluations, Performance and Implications

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Abstract
Two evaluative views of worker remittances draw opposite conclusions. The negative one posits that remittances increase dependency, contribute to economic and political instability and development distortion, and lead to economic decline that overshadows a temporary advantage for a fortunate few. The positive view sees remittances as an effective response to market forces, providing a transition to an otherwise unsustainable development. They improve income distribution and quality of life beyond what other available development approaches could deliver. The implications are tested for labor supply countries to Europe and to the Middle East. The implications of the negative view are not supported. Although the dire predictions of the pessimistic view have not materialized, the converse — contributions of remittances to economic performance — should not be overstated due to lack of data.

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