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Do Workers' Remittances Promote Economic Growth?

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Author Info

  • Michael T. Gapen
  • Ralph Chami
  • Peter Montiel
  • Adolfo Barajas
  • Connel Fullenkamp

Abstract

Over the past decades, workers'' remittances have grown to become one of the largest sources of financial flows to developing countries, often dwarfing other widely-studied sources such as private capital and official aid flows. While it is undeniable that remittances have poverty-alleviating and consumption-smoothing effects on recipient households, a key empirical question is whether they also serve to promote long-run economic growth. This study tackles this question and addresses the main shortcomings of previous empirical work, focusing on the appropriate measurement, and incorporating an instrument that is both correlated with remittances and would only be expected to affect growth through its effect on remittances. The results show that, at best, workers'' remittances have no impact on economic growth.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/153.

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Length: 22
Date of creation: 01 Jul 2009
Date of revision:
Handle: RePEc:imf:imfwpa:09/153

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Related research

Keywords: Economic growth; Poverty; Welfare; Capital accumulation; Capital flows; Developing countries; Labor markets; Migration; Poverty reduction; Private capital flows; Transfers of foreigners income; Workers remittances; remittances; remittance; workers ? remittances; remittance flows; remittance inflows; gdp growth; migrant; gdp per capita; effects of remittance; determinants of remittances; real gdp; growth rate; remittance receipts; effects of remittances; impact of remittances; worker remittances; remitter; effect of remittances; trade-to-gdp ratio; remittance receipt; worker remittance; total factor productivity; remittances data; growth accounting; growth rates; capital formation; access to remittance; remittances inflows; gdp growth rate; effect of remittances on growth; flow of remittances; migrant remittances; impact of remittances on labor supply; recipients of remittances; remittance transfer; immigrant remittance; remittance transfers; impact of remittances on growth; remitters; cost of remittance; amount of remittances; bilateral remittance; contribution of remittances;

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References

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  1. Michael T. Gapen & Thomas F. Cosimano & Ralph Chami, 2006. "Beware of Emigrants Bearing Gifts," IMF Working Papers 06/61, International Monetary Fund.
  2. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
  3. Arvind Subramanian & Raghuram Rajan, 2005. "What Undermines Aid's Impacton Growth?," IMF Working Papers 05/126, International Monetary Fund.
  4. Emmanuel K. K. Lartey & Federico S. Mandelman & Pablo A. Acosta, 2012. "Remittances, Exchange Rate Regimes and the Dutch Disease: A Panel Data Analysis," Review of International Economics, Wiley Blackwell, vol. 20(2), pages 377-395, 05.
  5. Jihad Dagher & Ralph Chami & Peter Montiel & Yasser Abdih, 2008. "Remittances and Institutions," IMF Working Papers 08/29, International Monetary Fund.
  6. Acosta, Pablo A. & Lartey, Emmanuel K.K. & Mandelman, Federico S., 2009. "Remittances and the Dutch disease," Journal of International Economics, Elsevier, vol. 79(1), pages 102-116, September.
  7. Giuliano, Paola & Ruiz-Arranz, Marta, 2006. "Remittances, Financial Development, and Growth," IZA Discussion Papers 2160, Institute for the Study of Labor (IZA).
  8. Michael Gapen & Thomas Cosimano & Ralph Chami, 2006. "Optimal Fiscal and Monetary Policy in the Presence of Remittances," Computing in Economics and Finance 2006 34, Society for Computational Economics.
  9. Dalia Hakura & Ralph Chami & Peter Montiel, 2009. "Remittances," IMF Working Papers 09/91, International Monetary Fund.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Do remittances help growth back home?
    by Economic Logician in Economic Logic on 2009-11-11 15:19:00
  2. Pengar till fattiga länder
    by nonicoclolasos in Nonicoclolasos on 2009-12-27 13:39:51
  3. Almost 80 percent of the growth in remittances to developing countries over the past 20 years is an illusion
    by ? in Development Impact on 2014-05-19 14:27:00
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