Remittances, Labor Supply and Unemployment : Case of Tajikistan

Abstract

Tajikistan enters the top list of remittance depending countries in the world. This fact raises concerns about the effect remittances may have on country’s economy, labor market in particular. There is an assumption that remittances have significant negative effect on labor supply and many empirical studies, including the one by Justino and Shemyakina, which is also about Tajikistan, confirm it. The present study using the data of LSMS survey revealed that the impact of remittances is insignificant on labor supply so is on unemployment and employment type in Tajikistan. Gender difference of the remittances effect on labor participation was also examined and showed that it is minor for both, men and women. The principal difference of this study from the one of Justino and Shemyakina is that the former uses panel compiled of the most recent available data (2007 and 2009), while the latter used data of LSMS 2003. Taking this into consideration, findings obtained from analysis of updated panel should be more accurate.