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The impacts of workers' remittances on human capital and labor supply in developing countries

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  • Azizi, SeyedSoroosh
Abstract
This study investigates the impacts of workers' remittances on human capital and labor supply by using data for 122 developing countries from 1990 to 2015. This topic has not been explored thoroughly at the aggregate level, mainly due to endogeneity of remittances and the difficulty in finding instruments to resolve this issue. To address the endogeneity of remittances, I estimate bilateral remittances and use them to create weighted indicators of remittance-sending countries. These weighted indicators are used as instruments for remittance inflow to remittance-receiving countries. Results obtained in this study indicate that remittances raise per capita health expenditures and reduce undernourishment prevalence, depth of food deficit, prevalence of stunting, and child mortality rate. Remittances also raise school enrollment, school completion rate, and private school enrollment. Although there is no difference in the impact of remittances on the health outcome of boys and girls, remittances improve the educational outcome of girls more than the educational outcome of boys. Further, remittances decrease the female labor force participation rate but do not affect the male labor force participation rate.

Suggested Citation

  • Azizi, SeyedSoroosh, 2018. "The impacts of workers' remittances on human capital and labor supply in developing countries," Economic Modelling, Elsevier, vol. 75(C), pages 377-396.
    • Handle: RePEc:eee:ecmode:v:75:y:2018:i:c:p:377-396
    DOI: 10.1016/j.econmod.2018.07.011
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    More about this item

    Keywords

    Migration; Remittances; Health; Education; Human capital; Labor supply; Developing countries;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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