International Private Transfers and Labor Participation in

International migration and private transfers by immigrant workers to their home countries have proved to be vital elements in the economic sustainability of small nations in Latin America. These transfers, identified as remittances, are one of the largest foreign financial inflows into El Salvador, exceeding garment manufacturing exports and official foreign aid. However, remittances may induce recipients to substitute job searching and labor efforts with increased leisure, hindering economic growth. Through a household survey eliciting information on remittance recipients and labor occupations, this study finds that remittances in El Salvador are associated with a reduction in labor participation, more so among women.