Munich Personal RePEc Archive

Macroeconomic Determinants of Workers’ Remittances and Compensation of Employees in Sub-Saharan Africa

Adenutsi, Deodat E. (2013): Macroeconomic Determinants of Workers’ Remittances and Compensation of Employees in Sub-Saharan Africa. Published in: Journal of Developing Areas , Vol. 48, No. 1 (2014): pp. 337-360.

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Abstract

In this paper, an attempt has been made to identify the macroeconomic determinants of migrant remittances received in Sub-Saharan Africa (SSA) at the disaggregated level. The underlying motivation is that, given their unique characteristics, permanent and temporary migrants are likely to respond differently to macroeconomic conditions in migrant-host countries and their native or migrant-home countries. For the empirical analysis, the system Generalized Method of Moments (GMM) approach was used to estimate a dynamic panel-data model involving 36 SSA countries over the period, 1980-2009. It was found that the inflows of compensation of employees and workers’ remittances to SSA are influenced by host-country macroeconomic conditions in a similar way, whereas these two forms of remittances are driven by contrasting home-country macroeconomic conditions. Remittances from permanent migrants are less altruistic than remittances from temporary migrants. To attract higher remittances on a more permanent basis, the implementation of stable macroeconomic and pro-growth policies are inevitable in labor-exporting SSA countries.

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