Have Remittances Affected Real Unit Labor Costs in the Transition Economies of Eastern Europe, the South Caucasus, and Central Asia?
Twelve of the 29 transition economies in Europe and Central Asia are high remittance recipients, with average remittance receipts equivalent to 5 percent or more of their gross domestic product in the 2010s. The paper examines the evolution, during...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/305811611083394794/Have-Remittances-Affected-Real-Unit-Labor-Costs-in-the-Transition-Economies-of-Eastern-Europe-the-South-Caucasus-and-Central-Asia http://hdl.handle.net/10986/35027 |
| Summary: | Twelve of the 29 transition economies in
Europe and Central Asia are high remittance recipients, with
average remittance receipts equivalent to 5 percent or more
of their gross domestic product in the 2010s. The paper
examines the evolution, during the 2000s and 2010s, of real
unit labor costs, denominated in local currency and U.S.
dollars, of the transition economies. Local currency and
U.S. dollar real unit labor costs rose much faster between
2003 and 2015-17 in the high remittance recipient economies
than in the other transition economies, although there was
considerable variance between the countries in the high
remittance recipient group. Among the high remittance
recipients, approximately half of the increase in real unit
labor costs denominated in U.S. dollars can be attributed to
increases in local currency real unit labor costs and half
to appreciation of their real exchange rates. Fixed effects
and cross-country econometric estimates suggest that
remittances had a positive and significant impact on the
changes in domestic currency real unit labor costs in the
transition economies. |
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