Destrée, N., Gente, K., Nourry, C. (2021). Migration, remittances and accumulation of human capital with endogenous debt constraints. Mathematical Social Sciences, 112, 38-60.
Abstract:
This paper studies the impact of migration and workers’ remittances on human capital and economic growth when young individuals face debt constraints to finance education. We consider an overlapping generations model à la de la Croix and Michel (2007). In this no-commitment setting, education is the engine of growth. Individuals may choose to default on their debt and be excluded from the asset market. We show that remittances tend to tighten the borrowing constraints for a given level of interest rate, but may enhance growth at the equilibrium. The model replicates both negative and positive impacts of migration and remittances on economic growth underlined by the empirical literature. We calibrate the model for 30 economies.
Destrée, N. (2020). The Golden Rule of Capital Accumulation with Workers' Remittances. Annals of Economics and Statistics, (137), 31-64.
Abstract:
This paper studies the impact of workers’ remittances on capital accumulation. We consider an overlapping-generations economy in which labour is endogenous and education is paid by parents. Children can migrate to another country and altruistically send remittances to family. In the recipient country, remittances reduce labour supply, domestic savings and capital accumulation with a country-specific impact on the gap between the competitive long-run equilibrium and the optimum. Appropriate taxes and subsidies allow a government to decentralize the optimum. We calibrate the model for 30 recipient countries to quantify the impact of remittances and the policy recommendation.
Khan, S., & Merritt, D. M. (2020). Remittances and International Development: The Invisible Forces Shaping Community. Routledge.
Politique étrangère, (1/2021), 213-214.
The Impact of Remittances on Net Foreign Asset Position in Developing Economies
In progress
Abstract:
The aim of this study is to determine the impact of remittances on the capacity of countries to borrow from other countries. In order to do this, we estimate an autoregressive distributed lag model (ARDL) for middle-income economies. Preliminary results show that in countries with a higher level of GDP, these transfers have a negative effect on net foreign assets relative to GDP meaning that borrowing is increasing. However, the effect is positive in countries where the GDP is lower. These results indicate that remittances tend to reduce credit constraints in the wealthiest developing countries.
Workers’ Remittances and Borrowing Constraints in Recipient Countries
Abstract:
This paper focuses on the role played by workers’ remittances in constrained economies. We consider an overlapping generations economy in which households have access to International Capital Market and the possibility to borrow to finance children education. We assume that households receive some remittances which may relax borrowing constraints. These inflows may reduce or increase domestic savings and capital accumulation according to the level of capital inflows constraint. Because of the OLG structure, the country may either be constrained or unconstrained in the long run. Remittances may make the initially constrained economy converging to the unconstrained steady state. The model is calibrated for five countries.