Template-type: ReDIF-Paper 1.0
Author-Name: Ziesemer, Thomas
Author-Email: t.ziesemer@algec.unimaas.nl
Author-Workplace-Name: University of Maastricht, Faculty of Economics 
Title: Worker Remittances and Growth: The Physical and Human Capital Channels
Abstract: Remittances may have an impact on economic growth through channels to
	 physical and human capital. We estimate two variants of an open economy
	 model of these two channels consisting of seven equations using the
	 general method of moments with heteroscedasticity and autocorrelation
	 correction (GMM-HAC) with pooled data for four different samples of
	 countries receiving remittances in 2003. The countries with per capita
	 income below $1200 benefit most from remittances in the long run because
	 they have the largest impact of remittances on savings. Their
	 remittances account for about 2% of the steady-state level of GDP per
	 capita when compared to the counterfactual of having no remittances.
	 Their ratio of the steady-state growth rates with and without
	 remittances is 1.39. Transitional gains are higher than the steady-state
	 gains only for the human capital variables of this sample. As savings
	 react much more strongly than investment an important benefit of
	 remittances is that less debt is incurred and less debt service is paid
	 than without remittances. The elasticity of the GNI/GDP ratio with
	 respect to the remittance/GDP ratio is .002. All effects are much weaker
	 for the richer countries.
Classification-JEL: O15, J61, C33
Keywords: remittances, growth, simultaneous equation model
Series: UNU-MERIT Working Papers
Creation-Date: 2006
Number: 020
File-URL: http://www.merit.unu.edu/publications/wppdf/2006/wp2006-020.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2006020