This study investigates how migration and remittances affect labour market participation in
Senegal. Further, it examines the effect of remittances on human capital development. The
results reveal that migration and remittances reduce labour market participation of
household members with migrants. More importantly, we find that the labour market
participation depends negatively on the level of remittances, which supports the reservation
wage theory. We also find that remittances increase expenditures on human capital
development, as approximated by education and health spending. These findings hold true
across specifications and econometric estimation procedures.
