The Impact of Remittances on Labor Supply: Case of Kosovo

This book examines the impact of remittances on labor force participation in Kosovo using propensity score matching. Investigating whether remittances have any impact on labor force participation is of utmost importance for the case of Kosovo since still today the rate of unemployment and dependency on remittances are very high. Using the Household Budget Survey 2011, this paper applies the propensity score matching techniques to identify the matching group. Through nearest neighbor matching method, this study obtains the matching results, showing the difference in labor force participation between the remittance recipient and nonrecipient household members. Covariates used in the model contain information about household and household members characteristics including age, gender, marital status, education, area of living, etc. Empirical findings of the study are in line with a growing body of literature and economic that the presence of remittances leads to a reduction in the rate of labor force participation.