Панченко, В.Г. and Резнікова, Н.В. and Карп, В.С. and Іващенко, Оксана Андріївна (2024) The impact of international labor migration on the macroeconomic environment of migrant labor donor countries: theoretical aspects Ефективна економіка (1). ISSN 2307-2105
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Abstract
The purpose of the article is to study the impact of international labor migration on the macroeconomic situation of countries that are donors of labor migrants. Remittances accompanying the flow of labor migrants have become a more significant form of support for developing countries. In many regions, migrant workers make up a significant part of the workforce, making a significant contribution to the socio-economic development of their host countries. Remittances tend to create a culture of dependency in developing countries, undermining recipients' motivation to work. As a result, such dependence can inhibit economic growth in the local economy. The phenomenon of the “vicious circle of remittances” is considered. A set of factors causing volatility in the demand for labor of migrant workers has been identified. It has been established that the relationship between the phenomenon of Dutch disease and remittances is ambiguous and depends not only on the level of development of productive forces in the donor country of labor migrants, but also on the specifics of consumption trends generated by remittances with a reorientation to imported goods, as well as on changes in the labor market, where the demand for less skilled labor in the non-manufacturing sector may increase due to a decrease in the competitiveness of products of export-oriented sectors of the economy if the government does not resort to regulating emigration processes and does not create an investment platform that used remittances for structural restructuring of the economy. It is noteworthy that in a situation where the exchange rate of the national currency of the donor country of labor migrants with an undiversified economic structure strengthens under the influence of growing volumes of remittances, labor migrants lose incentives to maintain existing volumes of remittances or increase them. The outflow of labor leads to a correction of the equilibrium in the labor market and the movement of workers between the production and non-production sectors of the economy, which causes an increase in wages in export-oriented sectors. The influx of remittances through the exchange rate channel leads to a decrease in demand for the products of national producers in both domestic and foreign markets, and also causes a cost of living crisis. The economic behavior of recipient households typically tends to increase the prices of goods and services in the domestic market, potentially affecting the entire population, including non-remittance recipient households. Given these negative impacts of remittances, the government should create incentives for businesses that will encourage long-term investment, which in turn can contribute to the structural transformation of the economy. Flows of remittances are often carried out in conditions of information asymmetries and can create risks for establishing internal equilibrium: reduction of incentives to work with negative consequences for equilibrium in the labor market; creation of incentives to participate in risky investments, which negatively affects the welfare of households, provokes the formation of bubbles in certain markets or leads to an increase in prices. Assessing the impact of remittances on the economies of remittance-receiving countries requires examining a wide range of multifaceted causal relationships, each with both positive and negative aspects that may vary depending on the socio-economic factors of each country.
Item Type: | Article |
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Uncontrolled Keywords: | international migration; labor migration; labor force; labor market; migration policy; regulation; economic development; economic growth; resource curse; competitiveness; macroeconomic environment; macroeconomic policy; volatility; GDP; developing countries; employment; remittances; financial resources; consumption; wages; cost of living crisis |
Subjects: | Статті у базах даних > Index Copernicus Статті у періодичних виданнях > Фахові (входять до переліку фахових, затверджений МОН) |
Divisions: | Факультет економіки та управління > Кафедра міжнародної економіки |
Depositing User: | Доцент Оксана Андріївна Іващенко |
Date Deposited: | 25 Apr 2024 08:57 |
Last Modified: | 25 Apr 2024 08:57 |
URI: | https://elibrary.kubg.edu.ua/id/eprint/48793 |
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