The Effects of Remittances on Output per Worker in S ub‐ S aharan A frica: A Production Function Approach

This paper uses a production function to examine the channels through which remittances affect output per worker in 31 Sub‐Saharan African countries from 1980 to 2010. Lagged remittances increase physical capital per worker, average years of schooling and total factor productivity, but the effective...

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Bibliographic Details
Published in:The South African Journal of economics 2016-09, Vol.84 (3), p.400-421
Main Authors: Ssozi, John, Asongu, Simplice A.
Format: Article
Language:English
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Summary:This paper uses a production function to examine the channels through which remittances affect output per worker in 31 Sub‐Saharan African countries from 1980 to 2010. Lagged remittances increase physical capital per worker, average years of schooling and total factor productivity, but the effectiveness of remittances varies with the income level of the recipient nation. Although remittances have increased both physical capital and total factor productivity among the upper middle income nations, among the lower middle income, they have increased only the physical capital. Meanwhile a reduction in institutional risk has encouraged investment and efficiency, but its relationship to the effectiveness of remittances has been inconclusive.
ISSN:0038-2280
1813-6982
DOI:10.1111/saje.12100