Abstract
People who migrate send remittance back to their home countries. This chapter analyses remittance inflows in regions such as South Asia, Sub-Saharan Africa, Latin America and the Caribbean, placing emphasis on Jamaica. The chapter gives a brief overview of the benefits of remittances inflows in small countries across the globe. The remittance and productivity dilemma is also put under the microscope. A summary of the impact of both the Global Financial Crisis and the COVID-19 pandemic on remittance flows to Jamaica is also provided which shows that remittance flows increased in the COVID-19 pandemic while it went down in the Global Financial Crisis. Possible explanations are provided for these contradicting performances. Finally, an Autoregressive Distributed Lag (ARDL) model is estimated to determine the impact of remittances inflows on Jamaica’s economic growth. The model results indicate that in the long run, remittance inflows reduce GDP growth in Jamaica.
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Notes
- 1.
Authors’ calculation based on Data retrieved from the World Development Indicators, 2021.
- 2.
World Bank. (2005). Global development finance 2005: Mobilizing finance and managing vulnerability, volume 1. Analysis and statistical appendix. Global development finance . World Bank. https://openknowledge.worldbank.org/handle/10986/8135 License: CC BY 3.0 IGO. http://hdl.handle.net/10986/8135.
- 3.
Alfieri, A., Havinga, I., & Hvidsten, V. (2006, February). Issue paper: Definition of remittances. In Meeting of the United Nations technical subgroup on movement of persons–mode (Vol. 4). https://millenniumindicators.un.org/unsd/tradeserv/TFSITS/TSGMode4/tsg3-feb06/tsg0602-14.pdf.
- 4.
Balance of Payments Manual, Sixth Edition Compilation Guide. https://books.google.com.jm/books?id=q0bnBwAAQBAJ&printsec=frontcover&dq=Balance+of+Payments+Manual,+Sixth+Edition+Compilation+Guide&hl=en&sa=X&redir_esc=y#v=onepage&q=Balance%20of%20Payments%20Manual%2C%20Sixth%20Edition%20Compilation%20Guide&f=false.
- 5.
Amuedo-Dorantes, C. (2014). The good and the bad in remittance flows. IZA World of Labor. https://wol.iza.org/articles/good-and-bad-in-remittance-flows/long.
- 6.
World Bank Country and Lending Groups. https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.
- 7.
- 8.
World Bank. (2005). Global development finance 2005: Mobilizing finance and managing vulnerability, volume 1. Analysis and statistical appendix. Global development finance . World Bank. https://openknowledge.worldbank.org/handle/10986/8135. License: CC BY 3.0 IGO. http://hdl.handle.net/10986/8135.
- 9.
World Bank. (2006). Global development finance 2006: The development potential of surging capital flows, Volume 1. Review, analysis, and outlook. Global development finance. World Bank. https://openknowledge.worldbank.org/handle/10986/8125 License: CC BY 3.0 IGO. http://hdl.handle.net/10986/8125.
- 10.
Ajayi, M. A., Ijaiya, M. A., Ijaiya, G. T., Bello, R. A., Ijaiya, M. A., & Adeyemi, S. L. (2009). International remittances and well-being in sub-Saharan Africa. Journal of Economics and International Finance, 1(3), 78–84. https://academicjournals.org/journal/JEIF/article-full-text-pdf/F7388961928.
- 11.
In plotting Haiti’s trendline, the average of 6.2% for 1971 to 1986 is used to plot the graph points between 1990 to 1997 due to data unavailability for those years.
- 12.
Cela, T. (2020, May). Haitian families and loss of remittances during COVID-19 Pandemic. https://oecd-development-matters.org/2020/05/29/haitian-families-and-loss-of-remittances-during-the-covid-19-pandemic/
- 13.
Roberts, D. (2006). The development impact of remittances on Caribbean economies: The case of Guyana. In SALISES Conference, University of the West Indies, St. Augustine. https://sta.uwi.edu/conferences/salises/documents/roberts%20d.pdf.
- 14.
Reference Period is January 2012–March 2021(1 year after the first COVID-19 case was recorded in Jamaica).
- 15.
Ramocan, E. G. (2010). Remittances to Jamaica. Findings from a national survey of remittance recipients. Bank of Jamaica https://www.boj.org.jm/uploads/pdf/papers_pamphlets/papers_pamphlets_Remittances_to_Jamaica_-_Findings_from_a_National_Survey_of_Remittance_Recipients.pdf.
- 16.
Ivey, W. (2017). An empirical analysis of minimum wage on the quality of Life. Southwestern Journal of Economics, 12 (1).
- 17.
- 18.
- 19.
- 20.
Chami, R., Fullenkamp, C., & Jahjah, S. (2005). Are immigrant remittance flows a source of capital for development. IMF Staff Papers, 52(1), 55–81.
- 21.
Imran, K., Devadason, E. S., & Kee Cheok, C. (2020). Foreign remittances and regional poverty: Evidence from household data. International Migration, 58(4), 214–230. https://www.researchgate.net/profile/Kashif-Imran4/publication/338009308_Foreign_Remittances_and_Regional_Poverty_Evidence_from_Household_Data/links/5e0c2197a6fdcc28374d4254/Foreign-Remittances-and-Regional-Poverty-Evidence-from-Household-Data.pdf.
- 22.
Azizi, S. (2021). The impacts of workers’ remittances on poverty and inequality in developing countries. Empirical Economics, 60(2), 969–991. https://link.springer.com/article/10.1007/s00181-019-01764-8.
- 23.
Adeseye, A. (2021). The effect of migrants remittance on economy growth in Nigeria: An Empirical Study. Open Journal of Political Science, 11(01), 99.
- 24.
Lag Selection Model for Eq. 7.4
- 25.
ARDL Bounds Test for Eq. 7.4.
- 26.
ARDL Long-run estimated coefficient: Dependent variable D(GDPG).
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Haughton, A., Ivey, W. (2023). Remittances. In: Overcoming Productivity Challenges in Small Countries. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-23301-2_7
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