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Determinants of expatriate workers'remittances in North Africa and Europe

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  • Elbadawi, Ibrahim
  • de Rezende Rocha, Robert

Abstract

The authors review the theoretical literature on the determinants of international workers'remittances and then posit an empirical model that accounts for demographic, portfolio, and macroeconomic factors that - together with special incentive policies - determine official remittances. They estimated the model using data from five major labor-exporting countries of North Africa and Europe: Morocco, Portugal, Tunisia, Turkey, and the former Yugoslavia. The econometric results strongly corroborate the model's predictions and reveal interesting policy implications. In planning for the future growth of remittances, labor-exporting countries should explicitly take into consideration the history of migration, since an aging labor force abroad will be less inclined to remit. Labor-exporting countries should also account for the economic prospects of the major labor-receiving countries and for the geographical distribution of their migrant labor. The authors'results show that remittances are significantly affected by economic policies in the home (labor-exporting) countries. Special incentive schemes cannot substitute for a stable, credible macroeconomic policy.

Suggested Citation

  • Elbadawi, Ibrahim & de Rezende Rocha, Robert, 1992. "Determinants of expatriate workers'remittances in North Africa and Europe," Policy Research Working Paper Series 1038, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1038
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    References listed on IDEAS

    as
    1. Elbadawi, Ibrahim A., 1992. "Macroeconomic management and the black market for foreign exchange in Sudan," Policy Research Working Paper Series 859, The World Bank.
    2. Chaudhry, Kiren Aziz, 1989. "The price of wealth: business and state in labor remittance and oil economies," International Organization, Cambridge University Press, vol. 43(01), pages 101-145, December.
    3. Solimano,Andres R., 1990. "Macroeconomic constraints for medium term growth and distribution : a model for Chile," Policy Research Working Paper Series 400, The World Bank.
    4. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
    5. Rudiger Dornbusch & Daniel Valente Dantas & Clarice Pechman & Roberto de Rezende Rocha & Demetrio SimÃ…es, 1983. "The Black Market for Dollars in Brazil," The Quarterly Journal of Economics, Oxford University Press, vol. 98(1), pages 25-40.
    6. Chamberlain, Gary, 1982. "Multivariate regression models for panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 5-46, January.
    7. Kumcu, M. Ercan, 1989. "The savings behavior of migrant workers : Turkish workers in W. Germany," Journal of Development Economics, Elsevier, vol. 30(2), pages 273-286, April.
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