The tightening of liquidity constraints for

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Unformatted text preview: us quarter. 121 References: Bosch, M. and W. F. Maloney (2009) Cyclical Movements in Unemployment and Informality in Developing Countries, mimeo, Office of the Chief Economist for Latin America, the World Bank Fiess, N. M. Fugazza, W. F. Maloney (2008) Informality and Macro economic Fluctuations” IBRD working paper. Geweke J., R. Marshall and Gary A. Zarkin (1986) “Exact Inference for Continuous Time Markov Chain Models,” Review of Economic Studies 53(4). Pp653‐69 Hall, R. (2005); “Employment Efficiency and Sticky Wages: Evidence Flows in the Labor Market,” Review of Economics and Statistics 87(3)397‐407. Maloney, W. (1990) “Evaluating Emergency Programs: Intertemporal and Financing Considerations” mimeo, Latin American and Caribbean Region. Shimer, R. (2007), “Reassessing the Ins and Outs of Unemployment” Mimeo, University of Chicago. Perry, G., W. F. Maloney, O.S. Arias, P Fajnzylber, A.D. Mason, J Saavedra‐Chanduvi (2007) Informality, Exit and Exclusion, World Bank Latin American and Caribbean Studies. Ravallion, M (1999) “Appraising Workfare,” World Bank Research Observer 14(1): 31‐48. 122 8. WHAT IS THE LIKELY IMPACT OF THE 2009 CRISIS ON REMITTANCES AND POVERTY IN LATIN AMERICA AND THE CARIBBEAN? Gabriel Demombynes, Hector Valdés Conroy, Ezequiel Molina and Amparo Ballivián April 2009* Importance of Remittances for LAC’s Fight against Poverty and Inequality Remittances have long been known to be an important factor for development and poverty reduction 154 in Latin America and the Caribbean (LAC). Just how important depends on what variable is chosen for the analysis, since there is wide variation in remittances’ importance by country, depending on the viewpoint: • • • • In total dollar terms, the largest remittance receivers in 2008 were: Mexico ($26bn), Colombia ($4.5 bn), Brazil ($4.5 bn), Guatemala ($4.4 bn), and El Salvador ($3.8 bn). As share of GDP the largest receivers in 2007 were: Honduras (24.5%), Guyana (23.5%), Haiti (20%), and Jamaica (19.4%). In per capita terms, the largest receivers in 2008 were: Jamaica ($827), El Salvador ($555), Dominica ($413), Honduras ($395), and Guyana ($377). By fraction of households receiving remittances, the most important were: Haiti (49%), Jamaica (40%), Guyana (33%), El Salvador (27%), Nicaragua (22%), and Honduras (20%). Remittances are an important driver of income growth, but only for those fortunate enough to receive them. The distribution of remittances across income quintiles using post‐transfer income can be very different than the distribution using pre‐transfer income. Previous analysis for 11 LAC countries for which micro‐data is available, has shown that 30 percent of households in these countries are in the first quintile of the pre‐remittances income distribution, but only 10 percent of households are in the lowest quintile of the post‐remittance income distribution. The different conclusions arrived at using post‐ versus pre...
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