Determinants of expatriate workers'remittances in North Africa and Europe

Ibrahim Elbadawi and Robert de Rezende Rocha

No 1038, Policy Research Working Paper Series from The World Bank

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.

Keywords: Economic Theory&Research; Economic Conditions and Volatility; Environmental Economics&Policies; Inequality; Banks&Banking Reform (search for similar items in EconPapers)
Date: 1992-11-30
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Citations: View citations in EconPapers (31)

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