The impact of COVID‐19 government responses on remittances in Latin American countries

Workers' remittances declined sharply as the COVID‐19 pandemic spread in the first half of 2020, rebounding in the second half. This paper analyses the impact of containment and economic support measures on remittances sent to Latin America during 2019–2020 using a gravity model estimated with...

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Bibliographic Details
Published in:Journal of International Development 2022-05, Vol.34 (4), p.803-822
Main Authors: Cardozo Silva, Adriana R, Diaz Pavez, Luis R, Martínez‐Zarzoso, Inmaculada, Nowak‐Lehmann, Felicitas
Format: Article
Language:English
Subjects:
Business cycles
Containment
COVID-19
Foreign exchange rates
Gravity
Latin America
lockdown
Pandemics
PPML
Remittances
Special Issue
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Summary:Workers' remittances declined sharply as the COVID‐19 pandemic spread in the first half of 2020, rebounding in the second half. This paper analyses the impact of containment and economic support measures on remittances sent to Latin America during 2019–2020 using a gravity model estimated with the Poisson pseudo‐maximum likelihood estimator (PPML). Results show that containment measures in receiving countries mainly explain the fall in remittance flows, whereas the effect of economic support measures is not robust. Among the traditional explanatory factors, the business cycle and the real exchange rate in receiving countries explain the subsequent recovery of remittances.
ISSN:1099-1328
0954-1748
1099-1328
DOI:10.1002/jid.3606