Remittances and the Dynamics of Human Capitalin the Recipient Country
This paper provides an analysis of the impact of migration and remittances on the inter-generational evolution of human capital in an economy that is characterized by the existence of a poverty trap at a low level of human capital. The analysis is conducted within an overlapping generation model, where parental investment in education are driven by weakly altruistic motivations. Remittances boost educational expenditure in recipient households, and they can determine a decisive impact on the long-term dynamics of human capital under favourable assumptions on the wage differential and on migration costs. Under these assumptions, an exogenous probability to migrate represents an equal probability of moving out of the poverty trap, that fades away in the long run, as remittances lead all households to converge towards the equilibrium at a high level of human capital. Although this model does not analyze the general equilibrium effects of remittances – as it is grounded on the independence of households’ dynamics – it provides a framework that is open to such an extension, that is called for by the literature on the Dutch Disease effects of remittances.
|Date of creation:||Jun 2006|
|Contact details of provider:|| Postal: Lungo Dora Siena 100, I-10153 Torino|
Phone: +39 011670 4406
Fax: +39 011670 3895
Web page: http://www.unito.it/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cigno, Alessandro, 2004. "The Supply of Child Labour," IZA Discussion Papers 1114, Institute for the Study of Labor (IZA).
- Galor, Oded & Zeira, Joseph, 1988.
"Income Distribution and Macroeconomics,"
51644, University Library of Munich, Germany, revised 01 Sep 1989.
- Rapoport, Hillel & Docquier, Frederic, 2006.
"The Economics of Migrants' Remittances,"
Handbook on the Economics of Giving, Reciprocity and Altruism,
- Pablo Acosta & Cesar Calderón & Pablo Fajnzylber & Humberto López, 2006. "Remittances and Development in Latin America," The World Economy, Wiley Blackwell, vol. 29(7), pages 957-987, 07.
- 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.
- Poirine, Bernard, 1997. "A theory of remittances as an implicit family loan arrangement," World Development, Elsevier, vol. 25(4), pages 589-611, January.
- Stark, Oded & Wang, Yong, 2001.
"Inducing Human Capital Formation: Migration as a Substitute for Subsidies,"
100, Institute for Advanced Studies.
- Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, vol. 86(1), pages 29-46, October.
- Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-48, December.
- Hillel Rapoport, 2002. "Migration, credit constraints and self-employment: A simple model of occupational choice, inequality and growth," Economics Bulletin, AccessEcon, vol. 15(7), pages 1-5.
- Djajic, Slobodan, 1998. "Emigration and welfare in an economy with foreign capital," Journal of Development Economics, Elsevier, vol. 56(2), pages 433-445, August.
- Raghuram G. Rajan & Arvind Subramanian, 2014.
"What Undermines Aidâ€™s Impact on Growth?,"
- McCormick, Barry & Wahba, Jackline, 2000. "Overseas Employment and Remittances to a Dual Economy," Economic Journal, Royal Economic Society, vol. 110(463), pages 509-34, April.
- Acosta, Pablo, 2006. "Labor supply, school attendance, and remittances from international migration : the case of El Salvador," Policy Research Working Paper Series 3903, The World Bank.
- Oded Stark, 2005.
"The New Economics of the Brain Drain,"
World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(2), pages 137-140, April.
- C. Berti Ceroni, 1998.
"Poverty Traps and Human Capital Accumulation,"
315, Dipartimento Scienze Economiche, Universita' di Bologna.
- Roberto Perotti, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Oxford University Press, vol. 60(4), pages 755-776.
- Quibria, M G, 1997. "International Migration, Remittances and Income Distribution in the," Bulletin of Economic Research, Wiley Blackwell, vol. 49(1), pages 29-46, January.
- 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.
- repec:ebl:ecbull:v:15:y:2002:i:7:p:1-5 is not listed on IDEAS
- Pritchett, Lant, 1996. "Where has all the education gone?," Policy Research Working Paper Series 1581, The World Bank.
- Faini, Riccardo, 1994. "Workers Remittances and the Real Exchange Rate: A Quantitative Framework," Journal of Population Economics, Springer;European Society for Population Economics, vol. 7(2), pages 235-245.
- Boucher, Steve & Stark, Oded & Taylor, J. Edward, 2005. "A Gain with a Drain? Evidence from Rural Mexico on the New Economics of the Brain Drain," Working Papers 190907, University of California, Davis, Department of Agricultural and Resource Economics.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-1037, October.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
When requesting a correction, please mention this item's handle: RePEc:uto:dipeco:200607. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Piero Cavaleri)or (Marina Grazioli)
If references are entirely missing, you can add them using this form.