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Are Remittances Conflict-Abating in Recipient Countries?

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  • Gazi Mainul Hassan

    ()
    (University of Waikato)

  • Joao Ricardo Faria

    ()
    (University of Texas at El Paso)

Abstract

This paper represents the first attempt to formalise the relationship between remittances inflow and social violence by developing a model which predicts that migrants’ remittances would lead to the reduction of social conflict in the recipient economy under the condition that remittances increase the average product of labour. Using homicides data as an indicator of social violence, we test our model’s prediction. Duly controlling for the endogeneity problem using appropriate instruments, we find that remittances tend to reduce social violence. We perform sensitivity analysis on remittances in the empirical model and find it robust with an unchanged negative sign.

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File URL: ftp://mngt.waikato.ac.nz/RePEc/wai/econwp/1311.pdf
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Bibliographic Info

Paper provided by University of Waikato, Department of Economics in its series Working Papers in Economics with number 13/11.

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Length: 22 pages
Date of creation: 16 Jul 2013
Date of revision:
Handle: RePEc:wai:econwp:13/11

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Keywords: remittances; international migration; social conflict; homicide; social violence; economic development;

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References

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  1. Sean Fox & Kristian Hoelscher, 2012. "Political order, development and social violence," Journal of Peace Research, Peace Research Institute Oslo, vol. 49(3), pages 431-444, May.
  2. Jean-Louis Combes & Christian Ebeke, 2011. "Remittances and Household Consumption Instability in Developing Countries," Working Papers halshs-00552245, HAL.
  3. 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.
  4. Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September.
  5. Serdar Sayan, 2006. "Business Cycles and Workers' Remittances," IMF Working Papers 06/52, International Monetary Fund.
  6. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  7. Levine, Ross & Renelt, David, 1991. "A sensitivity analysis of cross-country growth regressions," Policy Research Working Paper Series 609, The World Bank.
  8. Michael P. Murray, 2006. "Avoiding Invalid Instruments and Coping with Weak Instruments," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 111-132, Fall.
  9. Anna Lindley, 2009. "Remittances and Conflict: Some Conceptual Considerations," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 229(6), pages 774-786, December.
  10. Miguel León-Ledesma & Matloob Piracha, 2001. "International Migration and the Role of Remittances in Eastern Europe," Studies in Economics 0113, Department of Economics, University of Kent.
  11. Norman Loayza & Pablo Fajnzylber & Daniel Lederman, 2000. "Crime and Victimization: An Economic Perspective," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  12. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
  13. John Page & Sonia Plaza, 2006. "Migration Remittances and Development: A Review of Global Evidence," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 245-336, December.
  14. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, vol. 72(2), pages 429-461, December.
  15. Edward E. Leamer, 1982. "Let's Take the Con Out of Econometrics," UCLA Economics Working Papers 239, UCLA Department of Economics.
  16. Leamer, Edward E, 1985. "Sensitivity Analyses Would Help," American Economic Review, American Economic Association, vol. 75(3), pages 308-13, June.
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