Essays on the macroeconomic consequences of remittances in developing countries

• Main Author: Ebeke, Christian Hubert Xavier Camille
• Language: English
• Published: Université d'Auvergne - Clermont-Ferrand I 2011
• Subjects: [SHS:ECO] Humanities and Social Sciences/Economies and finances; [SHS:ECO] Sciences de l'Homme et Société/Economies et finances; Remittances; Financial development; Working poor; Consumption instability; Natural disasters; Output growth volatility; Public spending; Tax revenues
• Online Access: http://tel.archives-ouvertes.fr/tel-01066213; http://tel.archives-ouvertes.fr/docs/01/06/62/13/PDF/2011CLF10362.pdf

This thesis focused on the consequences of remittance inflows in developing countries. The first partexplored the causal impacts of remittances on some indicators of aggregate welfare while the secondpart examined the effects of remittances on public policy. Several results emerged. First, remittanceinflows help reduce the proportion of individuals selling low wages and this effect is stronger in acontext of low level of financial development, high macroeconomic instability and less unpredictableremittances (Chapter 1). Second, remittances have a robust stabilizing impact on the privateconsumption. However, this effect tends to decrease with the levels of remittance inflows and financialdevelopment. Moreover, remittance-dependent economies seem to be strongly sheltered against thedamaging effects of various types of shocks affecting consumption (Chapter 2). In Chapter 3, theresults highlighted that remittance inflows dampen the positive effect of natural disasters on the outputgrowth volatility. However, this impact was strongly reduced as the level of remittances increased.The second part of the thesis revealed interesting results regarding the effects of remittance inflows onpublic policy. First, remittance inflows reduce the insurance role played by the governmentconsumption in more open economies and this effect is more likely to hold when remittances exhibit acountercyclical behavior (Chapter 4). In Chapter 5, the results showed that the fiscal retrenchmentinduced by remittance inflows, is particularly marked for the public education and health spending incountries characterized by various types of governance problems. Finally, the thesis showed that theeffects of remittances do not only concern the expenditure side but also the revenue side. Remittancesare more likely to increase the fiscal space in receiving economies that rely on the value added taxsystem. In these countries, remittance inflows help increase both the level and the stability of thegovernment tax revenue ratio (Chapter 6).