The Altruistic Motive of Remittances: A Panel Data Analysis of Economies in Sub Saharan Africa

Dobdinga Cletus Fonchamnyo

Abstract


Remittances have become an important source of foreign exchange earnings in many countries as migrants continue to send income to relatives at home. However, the main motives for sending remittances remain controversial. This paper examines the relative importance of the socio-political and economic determinants of remittance inflow using an unbalance panel data of 36 economies in the Sub Saharan African Region in an attempt to assess the altruistic motive of remittance inflow. The results using a random effect estimation technique show that altruism is important for remitting, as the per capita income differential between host and home country and the age dependency ratio are positive and statistically significant. The level of per capita income of the home country is also found to be negative and statistically significant which also supports the altruistic motive of remittances. The results further suggest that the development of the financial sector and the proportion of Catholics in the population will encourage remittance inflow. These results are robust to the different specifications and estimation methodology.


Full Text: PDF DOI: 10.5539/ijef.v4n10p192

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

Copyright © Canadian Center of Science and Education

To make sure that you can receive messages from us, please add the 'ccsenet.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.