The effect of remittances on unemployment in the city of Armenia (Quindío province) during the period 2009-2016

Abstract

Studies on the sending of remittances indicate that they contribute to the decrease of unemployment. For the city of Armenia (Quindío province), the present study found out by means of analysis of time series that the unemployment rate is co-integrated of order one with the series of per-capita remittances based on the population of working age. Remittances respond quickly to changes in the unemployment rate, in order to maintain the long-term trend. The short-term dynamics indicates that in the face of a positive shock from remittances, the unemployment rate responds with increases in the first two quarters, and then decreases consecutively from the third quarter on.