South-South Migration in Latin America. Effects of Remittances from the Global South on Labor Force Participation and Investment in Paraguay and Bolivia

This paper aims to understand the effects of south-south remittances on the sending areas in two countries in Latin America, Bolivia and Paraguay. We provide a description of the changing patterns of sending and receiving remittances in the south of Latin America considering different moments in the decade, 2005 and 2010. The paper present a detailed analysis of the effects of remittances on labor force participation and investment in order to discuss the relationship among development, remittances and migration circuits in the south of Latin America. We use a nationally-representative household data set from Bolivia and Paraguay. Analytical work on the impact of remittances is complex due to the intrinsic endogeneity and selection bias involved in decisions surrounding migration and remittances. To meet these various methodological challenges we perform propensity score matching.