The Impact of Remittances on Labor Supply: The Case of Jordan

Abstract: One aspect of how migration can affect countries’ economies is through the labor income sent from the emigrant back to the source country. These are called remittances and constitute an important income post for Jordan, the country which is the subject of this study. This study aims to investigate how the received remittances are affecting the recipient households’ labor supply by applying the neoclassical model of labor-leisure choice, and by analyzing data on household income and expenditure surveys from the Department of Statistics in Jordan. The multiple regressions show that remittances affect labor supply negatively for both men and women and these results thereby contribute to the understanding of how this aspect of migration affects the source country’s economy.