The Effects of Remittances on Output Per Worker in Sub-Saharan Africa: A Production Function Approach

South African Journal of Economics,84(3), pp. 400-421 (September, 2016).

33 Pages Posted: 22 Dec 2014 Last revised: 10 Sep 2016

See all articles by John Ssozi

John Ssozi

Baylor University

Simplice Asongu

African Governance and Development Institute

Date Written: August 21, 2014

Abstract

This paper uses a production function to examine the channels through which remittances affect output per worker in 31 Sub-Saharan Africa (SSA) countries from 1980-2010. We find that remittances directly increase output per worker if complemented with education. The indirect effects vary with the economic characteristics of the recipient nations: while remittances have increased human capital among the low-income nations, among the upper-middle-income nations, they have mostly increased total factor productivity, but are still inversely related to factor inputs among the lower-middle-income nations of SSA. Finally, remittances are more effective when institutional risk is reducing.

Keywords: remittances, output per worker, total factor productivity, Sub-Saharan Africa

JEL Classification: F22, F24, F35, F43, F63, O15, O16, O43, O55

Suggested Citation

Ssozi, John and Asongu, Simplice, The Effects of Remittances on Output Per Worker in Sub-Saharan Africa: A Production Function Approach (August 21, 2014). South African Journal of Economics,84(3), pp. 400-421 (September, 2016).. Available at SSRN: https://ssrn.com/abstract=2541219 or http://dx.doi.org/10.2139/ssrn.2541219

John Ssozi (Contact Author)

Baylor University ( email )

Waco, TX 76798
United States

Simplice Asongu

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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