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Does Remittance Inflow Promote Human Development In Sub-Saharan Africa? An Empirical Insight

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  • MALAYARANJAN SAHOO

    (Department of Humanities and Social Sciences, National Institute of Technology Rourkela, Odisha-769008, India)

  • NARAYAN SETHI

    (Department of Humanities and Social Sciences, National Institute of Technology Rourkela, Odisha-769008, India)

Abstract

This paper examines the relationship between human development, remittances and other macroeconomic variables like life expectancy, human capital, FDI, inflation, economic growth and financial development by considering 31 Sub-Saharan African (SSA) countries during the period of 1990–2018. Kao and Fisher residual cointegration tests are applied to check the cointegration among the variables in the long-run. We apply fully modified OLS (FMOLS) and DOLS to show the long-run elasticity of explanatory variables on dependent variable. The result indicates that remittances have a positive and statistically significant effects on human development in SSA region. Similarly, government expenditure, human capital, inflation and economic growth have positive effects on human development in the region. Dumitrescu–Hurlin panel granger causality tests were observed such that there is a unidirectional causality between remittance and human development in SSA countries. However, human development and inflation rate show bi-directional relationship with each other. This paper suggests that public policies can be conceived to promote health, education and income, thereby encouraging and enhancing human development. Policymakers should also rely on other macroeconomic factors, such as government spending and financial development, to stimulate human development in SSA region.

Suggested Citation

  • Malayaranjan Sahoo & Narayan Sethi, 2020. "Does Remittance Inflow Promote Human Development In Sub-Saharan Africa? An Empirical Insight," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 20(04), pages 1-23, December.
    • Handle: RePEc:wsi:gejxxx:v:20:y:2020:i:04:n:s2194565920500219
    DOI: 10.1142/S2194565920500219
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    Cited by:

    1. Abbas, Syed Ali & Selvanathan, Saroja & Selvanathan, Eliyathamby A., 2023. "Structural transformation, urbanization, and remittances in developing countries: A panel VAR analysis," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 55-69.

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