Why Don't Remittances Appear to Affect Growth?

Clemens, Michael A.; McKenzie, David

doi:10.1111/ecoj.12463

Cited by 69 publications

(32 citation statements)

References 55 publications

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“…Taylor and López-Feldman (2010) find the positive link between migration and land productivity in migrant-sending households in Mexico. As in the case of direct effect from remittances on growth, there is no consensus, yet Clemens and McKenzie (2014) note that macroeconomic researchers find it difficult to assess the impact of remittances on economic growth. The main assumption of this note is the following: the impact of remittances on economic growth cannot be measured directly; the effect of remittances on economic growth operates via TFP.…”

Section: Existing Researchmentioning

confidence: 99%

“…Remittances are generally considered to be the most tangible link between migration and development in countries of origin (Ratha, 2006); their macroeconomic impact is not well-understood (Barajas, Chami, Ebeke, & Tapsoba, 2012). Over the past two decades, several studies have assessed the relationship between remittances and economic growth (Adams & Klobodu, 2016;Barajas et al, 2009), and this line of research is attracting considerable attention (Clemens & McKenzie, 2014). Remittances and other financial flows to developing countries are important for both growth and smoothing consumption (Makhlouf, 2013).…”

Section: Introductionmentioning

confidence: 99%

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Is Productivity Affected by Remittances? The Evidence from Morocco

Makhlouf¹

2018

J of Intl Development

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Empirical results yield mixed evidence of the effect of remittances on economic growth in countries of origin. This note assesses the potential impact of remittance instability on total factor productivity in Morocco. It uses a threshold vector autoregression model for the period 1975–2014. Remittances are used as a threshold variable. Results show that the response of total factor productivity to shock in remittances is positive and stronger when those remittances exceed the value of 5.132 per cent of GDP with the reverse effect when they are lower than the threshold value. Public authorities may enhance remittances to accelerate a country's development. © 2018 John Wiley & Sons, Ltd.

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Section: Existing Researchmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Is Productivity Affected by Remittances? The Evidence from Morocco

Makhlouf¹

2018

J of Intl Development

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“…A series of studies using micro and macro data prove the role of remittances in reducing poverty. Thus, the correlations between remittances, population migration, poverty and economic growth from the macro and microeconomic perspective were analyzed for 68 developing countries, and the period 1990-2010, the authors considering that remittances increase with increasing emigration, having a positive effect on poverty reduction, but the impact of remittances on economic growth is difficult to quantify [23]. The impact of remittances on poverty has been analyzed for six emerging countries over the period 1994-2014, using two scenarios; a pessimistic one, where remittances negatively affect both economic growth and per capita income, and an optimistic one in which the remittance flow contributes to the reduction of poverty, the conclusion being the need to establish critical points that remittances have to overcome in order to reduce poverty in labor-exporting countries [24].…”

Section: Methodsmentioning

confidence: 99%

The Effect of Remittances on Poverty in the Emerging Countries of the European Union

2019

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In this paper we study the evolution of remittances and risk of poverty threshold for nine emerging countries in the European Union and analyzed the evolution and trend of the share of remittances in the risk of poverty threshold. The analysis was performed on data taken from the Eurostat database for the period 2005–2017. The statistical analysis of the data showed that the evolution of both remittances and risk of poverty threshold was heavily influenced by the global economic crisis. Although after the crisis, the risk of poverty threshold has seen a growing trend in all emerging countries, the remittances have experienced sinuous variations, dramatic declines for some of the countries (drastically for Romania and Latvia) and significant increases for others (Hungary). The results of the analysis using time-dependent regression models lead to the conclusion that, although the share of remittances in risk of poverty threshold diminished abruptly after the 2009 economic crisis, in the short term it is expected to maintain a growth trend for most of the analyzed countries (Bulgaria, Czechia, Hungary, Lithuania, Poland, Romania, and Slovakia), followed downward tendency after 2018 for Bulgaria and Romania, and after 2020 for Hungary and Lithuania. For Latvia and Estonia, both quadratic and cubic models estimate a decreasing evolution.

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“…The correlations between remittances, population migration, poverty, and economic growth from the macro-and microeconomic perspective were analyzed, and the authors consider that remittances increase with increasing emigration and have a positive effect on poverty reduction but that the impact of remittances on economic growth is difficult to quantify [60].…”

Section: Literature Reviewmentioning

confidence: 99%

Remittances, Migration and Gross Domestic Product from Romania’s Perspective

2019

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This study analyzes the evolution and trends of the share of remittances in gross domestic product (GDP) and the influence of migration on remittances in Romania. The analysis on data from Eurostat over 2008–2017 has three components: a statistical analysis, an estimation of evolution of indicators, and an estimation of impact of migration on remittances, using polynomial-time regression and difference equation models, respectively. The results showed that GDP and GDP/capita had a permanent increase, meaning an improvement in the standard of living in Romania, while the other indicators had an evolution with a period of sharp decline triggered by the global crisis, followed by a slow growth. We may conclude that the remittances represented and still represent a relatively stable financial resource for Romania as for the other emerging countries in Europe, affecting in a positive way the standard of living of the citizens, although their value has a tendency to decrease. At the same time, the negative effects of remittances, dependence on money received from migrants and the exodus of “brains” and skilled workers, must be considered, implying the necessity of government policies for a better use of remittances, i.e., mainly for investments and less for consumption.

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Why Don't Remittances Appear to Affect Growth?

Cited by 69 publications

References 55 publications

Is Productivity Affected by Remittances? The Evidence from Morocco

Is Productivity Affected by Remittances? The Evidence from Morocco

The Effect of Remittances on Poverty in the Emerging Countries of the European Union

Remittances, Migration and Gross Domestic Product from Romania’s Perspective

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