Remittances and Gender-Speci fic Employment Patterns in Peru - a longitudinal Analysis

This study examines the role of migrant's remittances on labor supply in remittance receiving households. A simple labor choice model is developed which is extended to include self-employment. Unlike earlier studies, fixed effects estimations as well as an instrumental approach are applied. Estimates are provided for both participation and hours. Strong evidence is provided that remittances increase self-employment at the extensive margin for women. Overall, no robust effect of reduced labor supply in response to remittances is found.