Why Don't Remittances Appear to Affect Growth?

Why Don't Remittances Appear to Affect Growth?

Although measured remittances by migrant workers have soared in recent years, macroeconomic studies have difficulty detecting their effect on economic growth. This paper reviews existing explanations for this puzzle and proposes three new ones. Fir...

Full description

Bibliographic Details
Main Authors: Clemens, Michael A., McKenzie, David
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2014
Subjects:
CROSS-COUNTRY REGRESSIONS
ECONOMIC GROWTH
EFFECTS ON POVERTY
GLOBAL GROSS DOMESTIC PRODUCT
MEASUREMENT CHANGES
MIGRATION
ORIGIN ECONOMY
REMITTANCES
Online Access:http://documents.worldbank.org/curated/en/2014/05/19457668/dont-remittances-appear-affect-growth
http://hdl.handle.net/10986/18352
id okr-10986-18352
recordtype oai_dc
spelling okr-10986-183522021-04-23T14:03:44Z Why Don't Remittances Appear to Affect Growth? Clemens, Michael A. McKenzie, David CROSS-COUNTRY REGRESSIONS ECONOMIC GROWTH EFFECTS ON POVERTY GLOBAL GROSS DOMESTIC PRODUCT MEASUREMENT CHANGES MIGRATION ORIGIN ECONOMY REMITTANCES Although measured remittances by migrant workers have soared in recent years, macroeconomic studies have difficulty detecting their effect on economic growth. This paper reviews existing explanations for this puzzle and proposes three new ones. First, it offers evidence that a large majority of the recent rise in measured remittances may be illusory -- arising from changes in measurement, not changes in real financial flows. Second, it shows that even if these increases were correctly measured, cross-country regressions would have too little power to detect their effects on growth. Third, it points out that the greatest driver of rising remittances is rising migration, which has an opportunity cost to economic product at the origin. Net of that cost, there is little reason to expect large growth effects of remittances in the origin economy. Migration and remittances clearly have first-order effects on poverty at the origin, on the welfare of migrants and their families, and on global gross domestic product; but detecting their effects on growth of the origin economy is likely to remain elusive. 2014-05-15T16:33:45Z 2014-05-15T16:33:45Z 2014-05 http://documents.worldbank.org/curated/en/2014/05/19457668/dont-remittances-appear-affect-growth http://hdl.handle.net/10986/18352 English en_US Policy Research Working Paper;No. 6856 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic CROSS-COUNTRY REGRESSIONS
ECONOMIC GROWTH
EFFECTS ON POVERTY
GLOBAL GROSS DOMESTIC PRODUCT
MEASUREMENT CHANGES
MIGRATION
ORIGIN ECONOMY
REMITTANCES
spellingShingle CROSS-COUNTRY REGRESSIONS
ECONOMIC GROWTH
EFFECTS ON POVERTY
GLOBAL GROSS DOMESTIC PRODUCT
MEASUREMENT CHANGES
MIGRATION
ORIGIN ECONOMY
REMITTANCES
Clemens, Michael A.
McKenzie, David
Why Don't Remittances Appear to Affect Growth?
relation Policy Research Working Paper;No. 6856
description Although measured remittances by migrant workers have soared in recent years, macroeconomic studies have difficulty detecting their effect on economic growth. This paper reviews existing explanations for this puzzle and proposes three new ones. First, it offers evidence that a large majority of the recent rise in measured remittances may be illusory -- arising from changes in measurement, not changes in real financial flows. Second, it shows that even if these increases were correctly measured, cross-country regressions would have too little power to detect their effects on growth. Third, it points out that the greatest driver of rising remittances is rising migration, which has an opportunity cost to economic product at the origin. Net of that cost, there is little reason to expect large growth effects of remittances in the origin economy. Migration and remittances clearly have first-order effects on poverty at the origin, on the welfare of migrants and their families, and on global gross domestic product; but detecting their effects on growth of the origin economy is likely to remain elusive.
format Publications & Research :: Policy Research Working Paper
author Clemens, Michael A.
McKenzie, David
author_facet Clemens, Michael A.
McKenzie, David
author_sort Clemens, Michael A.
title Why Don't Remittances Appear to Affect Growth?
title_short Why Don't Remittances Appear to Affect Growth?
title_full Why Don't Remittances Appear to Affect Growth?
title_fullStr Why Don't Remittances Appear to Affect Growth?
title_full_unstemmed Why Don't Remittances Appear to Affect Growth?
title_sort why don't remittances appear to affect growth?
publisher World Bank, Washington, DC
publishDate 2014
url http://documents.worldbank.org/curated/en/2014/05/19457668/dont-remittances-appear-affect-growth
http://hdl.handle.net/10986/18352
_version_ 1764440696193810432

Similar Items