ABSTRACT
Emigration reduces labor supply in the country of origin‚ causing imbalances in labor market outcomes in terms of employment‚ sectoral skills‚ and wages. This paper assesses the impact of migrant remittances on the mitigation of such effects in Kyrgyzstan‚ Moldova‚ Nepal‚ and Tajikistan over the period 2002-2024. World Bank data was used and a descriptive‚ correlation and regression analyses were performed to understand the effect of remittances to GDP ratio on the unemployment rate‚ used as a proxy for labor market mismatch. Results show the labor market impact of remittances is heterogeneous across countries. In Kyrgyzstan‚ remittance inflows correlate with lower unemployment‚ suggesting that emigration and remittance income helped to absorb labor surpluses. In Moldova and Tajikistan‚ higher remittance inflows correlate with higher unemployment or lower labor force participation‚ suggesting that remittance income reduces the incentive to work at home in these countries. These results imply that remittances are mainly used to compensate for the lost income‚ rather than to replace the lost productive labor force. In Nepal‚ there is no net effect on unemployment. Respective domestic job creation‚ productive investment‚ and economic development in migrant-sending areas remain imperative for long-term adjustment.

Keywords: remittances, emigration, labor market gaps, unemployment, economic development.
JEL Classification: F22, F24, J61, O15, E24






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