Abstract:Through the expounding of the influence mechanism of financial development level on the productivity effect of labor remittance in recipient countries, based on the panel data of 142 countries from 1980 to 2017 and using the fixed effects model and two-stage least squares method (2SLS), this paper makes an empirical research with the focus on “whether the differences in financial development affects the mechanism of labor remittances to the recipient countries’ labor productivity”. The results show that labor remittance promotes the improvement of labor productivity in the receiving country. But with the increase of the amount of labor remittance, the role of labor remittance in promoting the improvement of labor productivity is weakened. The higher the level of financial development, the greater the extent to which remittances promote the labor productivity in recipient countries, and the greater the impact the banking-oriented financial system has on labor remittance promoting labor productivity growth. In addition, after considering the impact of financial crisis, our regression results of this article remain robust. Finally, based on the conclusions, this paper puts forward corresponding policy recommendations on how to use labor remittances reasonably and improve the level of financial development.