Template-type: ReDIF-Paper 1.0
Author-Name: Ziesemer, Thomas
Author-Email: T.Ziesemer@algec.unimaas.nl
Author-Workplace-Name: UNU-MERIT, and Maastricht University
Title: Worker remittances, migration, accumulation and growth in poor developing 
	 countries
Abstract: The impact of migration and worker remittances on literacy, accumulation 
	 of capital and growth is analyzed for a panel of countries with per 
	 capita income below $1200 (2000). We estimate regressions for dynamic 
	 equations of migration, worker remittances, savings, investment, tax 
	 revenues, public expenditure on education, interest rates, literacy, 
	 labour force growth, development aid and GDP per capita growth, using 
	 dynamic panel data methods. The estimated equations are then integrated 
	 to a dynamic system that allows for simulations using the whole 
	 integrated system allowing conceptually for the open economy aspects 
	 aid, trade, capital movements and migration. The linear-quadratic impact 
	 of the income difference between rich and poor countries on remittances 
	 and migration generates some highly non-linear results in the baseline 
	 simulation. Then we analyze the counterfactuals "remittances send only 
	 50%" or "no net migration". The results for the direct effects are that 
	 emigration lowers savings and labour force growth. The total effect of 
	 net migration on GDP per capita is to increase the growth rate until 
	 2150 and the effect on levels runs up to 7% above the baseline value. 
	 Remittances enhance savings, public expenditures on education and 
	 growth, but reduce tax revenues and emigration. These latter two 
	 effects, however, are outweighed by the indirect effect of remittances 
	 on savings, which have a strongly positive impact on tax revenues and 
	 emigration, indicating that conclusions from single equation regressions 
	 maybe misleading and indirect effects may dominate for some variables or 
	 strongly reduce the direct effects. The total effect of remittances on 
	 levels and growth rates of GDP per capita, investment and literacy are 
	 positive.
Classification-JEL: F22, F24, O15, J61
Keywords: migration, remittances, growth, capital accumulation
Series: UNU-MERIT Working Papers
Creation-Date: 2008
Number: 063
File-URL: http://www.merit.unu.edu/publications/wppdf/2008/wp2008-063.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2008063