International Workers’ Remittances and Private Consumption in Nigeria
Keywords:
International workers’ remittance, private consumption, ECM
Abstract
This study examined the relationship between international workers’ remittance and private consumption in Nigeria for the period 1981-2014. Employing an error correction modelling technique, the study observed that international workers’ remittance had positive and significant influence on private consumption in Nigeria, both in the long and short run. The study recommended the need to ensure that workers’ remittances sent through the banks and other transfer institutions attract little moderate bank charges in order not to limit the impact of workers’ remittance on private consumption. Also, there is the need for the government, through its agency, such as the Standards Organization of Nigeria (SON), to maintain standards in both quantity and quality of consumables produced by local manufactures. This will encourage benefits of international remittance in expending their remittances on domestic commodities rather than on foreign/imported commodities.
References
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Amaghionyeodiwe, A.L. and Dauda, R.O.S. (2011). Economic transformation in Nigeria: Any role for migrant remittance’, Nigeria Journal of Economic and Social Studies, 54: 159-182.
Chami, R., Fullenkamp, C. and Jahjah, S. (2003). Are immigrant remittance flows a source of capital for development?’ Working Paper No.189. Washington International Monetary Fund.
Dornbusch R., S. Fischer and R. Startz (2003), ‘Macroeconomic’, Eighth Edition. Tata McGraw-Hill Companies Inc. ISBN 0-07-047434-6. www.tatamcgrawhill.com
Duesenberry, J. S. (1949). Income, saving, and the theory of consumer behaviour. Cambridge, Mass. Harvard University, Press.
Edwards, C.A. and Ureta, M. (2003), ‘International migration, remittances, and schooling: evidence from El Salvador’, Journal of Development Economics, Vol. 72, pp. 429- 461.
Freidman, M. (1957), A Theory of the Consumption Function, Princeton, NJ; Princeton University Press.
Gammeltoft, P. (2002), ‘Remittances and other financial flows to developing countries’, International Migration, 40(2): 181-211.
Hadi, A. (1999). Overseas migration and the well-being of those left behind in rural communities of Bangladesh. Asia-Pacific Population Journal, 14(1): 43-58.
Honest, Z., Carren, P. and Judith, T. (2013), ‘Consumption response to Diaspora remittances in Zimbabwe’, Botswana Journal of Economics, Vol. 11 No. 15, pp. 32 41.
Iheke, O.R. (2012), ‘The effect of remittances on the Nigerian economy’, International Journal of Development and Sustainability, Vol. 1 No. 2, pp. 614-621.
Încalţărău, C. and Maha, L. (2012), ‘The Impact of Remittances on Consumption and Investment in Romania’, Eastern Journal of European Studies, 3(2): 61-86.
International Monetary Fund and World Bank, (2009), A Review of Some Aspects of the Low Income Country Debt Sustainability Framework, IMF and World Bank: Washington DC.
Jean-Louis, C. and Christian, E. (2010), ‘Remittances and household consumption instability in developing countries’, World Development, Vol. 39 No. 7, pp. 1076 1089.
Kannan, K.P. and Hari, K.S. (2002), ‘Kerala’s Gulf connection: emigration, remittances and their macroeconomic impact 1972-2000’, Working Paper No. 328, Centre for Development Studies, Trivandrum India.
Kausar, Y., Ambreen, A., Somiya, A. and Sidra, T. (2011), ‘The impact of workers’ remittances on private investment and total consumption in Pakistan’, International Journal of Accounting and Financial Reporting, 1(1): 173-175.
Keely, C. and Tran, B.N. (1989). Remittances from labor migration: Evaluations, performance, and implications. International Migration Review, 23(3): 500- 525.
Keynes, J.M. (1936). The General Theory of Employment, Interest and Money. London: Macmillan.
Kure, E. and Nwosu, C.P. (2008), ‘Workers’ remittances and economic growth: evidences from Nigeria’, paper presented at Young Statistician Conference, 1st to 3rd May, held at Saint George Hotel, Pretoria, South Africa.
Lucas, R. and Stark, O. (1985), ‘Motivations to remit: evidence from Botswana’, The Journal of Political Economy, Vol. 93 No. 5, pp. 901-918.
Modigliani, F. (1986), ‘Life cycle, individual, thrift and the wealth of nation’, American Economic Review, Vol. 76 No. 3, pp. 297-313.
Maimbo, S. and Ratha, D. (2005), ‘Remittances development impacts and future prospects’, World Bank.
Mbutor, O.M. (2010), ‘Can monetary policy enhance remittances for economic growth in Africa? The case of Nigeria’, Journal of Economics and International Finance, Vol. 2 No. 8, 156-163.
Olowa, O.W., Awoyemi, T.T., Shittu, M.A. and Omowumi, A.O. (2013), ‘Effects of remittances on poverty among rural households in Nigeria’, European Journal of Sustainable Development, Vol. 2 No. 4, pp. 263-284.
Olatomide, W.O. and Omowumi, A.O. (2013), ‘Remittances and income mobility in the rural areas of Nigeria’, Global Journal of Management and Business Research Finance, Vol. 13 No. 9, pp. 42-49.
Puri, R. and Ritzema, T. (1999), ‘Migrant worker remittances, micro-finance and informal economy: prospects and issues’, Working Paper No 21, Social Finance Unit, Enterprise and Cooperative Development Department, International Labour Office, Geneva.
Ratha, D. (2005), ‘Workers’ remittances: an important and stable source of external development finance’, Economics Seminar Series, Paper 9, pp. 157-175, Global Development Finance External Debt of Developing Countries, World Bank.
Sayyed, M.B., Madeeha, R., Muhammad, N. Tauqueer, A. and Muhammad, K.S. (2015), ‘Workers’ remittances and household consumption volatility in South Asia’, Merit Research Journals of Education and Review, Vol. 3 No. 10, pp. 299-303.
Tansel, A. and Yasar, P. (2010), ‘Macroeconomic impact of remittances on output growth: Evidence from Turkey’, Discussion Paper, No. 5376, The Institute for the Study of Labor.
Taiwo, V.O. and Odekunle, L.A. (2013), ‘Workers’ remittance and their effect on the level of investment in Nigeria: An empirical analysis’, International Journal of Economics and Finance, Vol. 5 No. 4, pp. 89-99.
Udah, E.B. (2011), ‘Remittance, human capital and economic performance in Nigeria’, Journal of Sustainable Development in Africa, Vol. 13 No. 4, pp. 300-318.
Yang, D. (2003), ‘Remittances and human capital development: child schooling and child labor in the origin households of overseas Filipino workers’, Working Paper No.7, Harvard University, Department of Economics Literature Center.
Yang, D. and Choi, H.J. (2007), ‘Are remittances insurance? Evidence from rainfall shocks in the Philippines’, World Bank Economic Review, Vol. 21 No. 2, pp. 219-248.
Amaghionyeodiwe, A.L. and Dauda, R.O.S. (2011). Economic transformation in Nigeria: Any role for migrant remittance’, Nigeria Journal of Economic and Social Studies, 54: 159-182.
Chami, R., Fullenkamp, C. and Jahjah, S. (2003). Are immigrant remittance flows a source of capital for development?’ Working Paper No.189. Washington International Monetary Fund.
Dornbusch R., S. Fischer and R. Startz (2003), ‘Macroeconomic’, Eighth Edition. Tata McGraw-Hill Companies Inc. ISBN 0-07-047434-6. www.tatamcgrawhill.com
Duesenberry, J. S. (1949). Income, saving, and the theory of consumer behaviour. Cambridge, Mass. Harvard University, Press.
Edwards, C.A. and Ureta, M. (2003), ‘International migration, remittances, and schooling: evidence from El Salvador’, Journal of Development Economics, Vol. 72, pp. 429- 461.
Freidman, M. (1957), A Theory of the Consumption Function, Princeton, NJ; Princeton University Press.
Gammeltoft, P. (2002), ‘Remittances and other financial flows to developing countries’, International Migration, 40(2): 181-211.
Hadi, A. (1999). Overseas migration and the well-being of those left behind in rural communities of Bangladesh. Asia-Pacific Population Journal, 14(1): 43-58.
Honest, Z., Carren, P. and Judith, T. (2013), ‘Consumption response to Diaspora remittances in Zimbabwe’, Botswana Journal of Economics, Vol. 11 No. 15, pp. 32 41.
Iheke, O.R. (2012), ‘The effect of remittances on the Nigerian economy’, International Journal of Development and Sustainability, Vol. 1 No. 2, pp. 614-621.
Încalţărău, C. and Maha, L. (2012), ‘The Impact of Remittances on Consumption and Investment in Romania’, Eastern Journal of European Studies, 3(2): 61-86.
International Monetary Fund and World Bank, (2009), A Review of Some Aspects of the Low Income Country Debt Sustainability Framework, IMF and World Bank: Washington DC.
Jean-Louis, C. and Christian, E. (2010), ‘Remittances and household consumption instability in developing countries’, World Development, Vol. 39 No. 7, pp. 1076 1089.
Kannan, K.P. and Hari, K.S. (2002), ‘Kerala’s Gulf connection: emigration, remittances and their macroeconomic impact 1972-2000’, Working Paper No. 328, Centre for Development Studies, Trivandrum India.
Kausar, Y., Ambreen, A., Somiya, A. and Sidra, T. (2011), ‘The impact of workers’ remittances on private investment and total consumption in Pakistan’, International Journal of Accounting and Financial Reporting, 1(1): 173-175.
Keely, C. and Tran, B.N. (1989). Remittances from labor migration: Evaluations, performance, and implications. International Migration Review, 23(3): 500- 525.
Keynes, J.M. (1936). The General Theory of Employment, Interest and Money. London: Macmillan.
Kure, E. and Nwosu, C.P. (2008), ‘Workers’ remittances and economic growth: evidences from Nigeria’, paper presented at Young Statistician Conference, 1st to 3rd May, held at Saint George Hotel, Pretoria, South Africa.
Lucas, R. and Stark, O. (1985), ‘Motivations to remit: evidence from Botswana’, The Journal of Political Economy, Vol. 93 No. 5, pp. 901-918.
Modigliani, F. (1986), ‘Life cycle, individual, thrift and the wealth of nation’, American Economic Review, Vol. 76 No. 3, pp. 297-313.
Maimbo, S. and Ratha, D. (2005), ‘Remittances development impacts and future prospects’, World Bank.
Mbutor, O.M. (2010), ‘Can monetary policy enhance remittances for economic growth in Africa? The case of Nigeria’, Journal of Economics and International Finance, Vol. 2 No. 8, 156-163.
Olowa, O.W., Awoyemi, T.T., Shittu, M.A. and Omowumi, A.O. (2013), ‘Effects of remittances on poverty among rural households in Nigeria’, European Journal of Sustainable Development, Vol. 2 No. 4, pp. 263-284.
Olatomide, W.O. and Omowumi, A.O. (2013), ‘Remittances and income mobility in the rural areas of Nigeria’, Global Journal of Management and Business Research Finance, Vol. 13 No. 9, pp. 42-49.
Puri, R. and Ritzema, T. (1999), ‘Migrant worker remittances, micro-finance and informal economy: prospects and issues’, Working Paper No 21, Social Finance Unit, Enterprise and Cooperative Development Department, International Labour Office, Geneva.
Ratha, D. (2005), ‘Workers’ remittances: an important and stable source of external development finance’, Economics Seminar Series, Paper 9, pp. 157-175, Global Development Finance External Debt of Developing Countries, World Bank.
Sayyed, M.B., Madeeha, R., Muhammad, N. Tauqueer, A. and Muhammad, K.S. (2015), ‘Workers’ remittances and household consumption volatility in South Asia’, Merit Research Journals of Education and Review, Vol. 3 No. 10, pp. 299-303.
Tansel, A. and Yasar, P. (2010), ‘Macroeconomic impact of remittances on output growth: Evidence from Turkey’, Discussion Paper, No. 5376, The Institute for the Study of Labor.
Taiwo, V.O. and Odekunle, L.A. (2013), ‘Workers’ remittance and their effect on the level of investment in Nigeria: An empirical analysis’, International Journal of Economics and Finance, Vol. 5 No. 4, pp. 89-99.
Udah, E.B. (2011), ‘Remittance, human capital and economic performance in Nigeria’, Journal of Sustainable Development in Africa, Vol. 13 No. 4, pp. 300-318.
Yang, D. (2003), ‘Remittances and human capital development: child schooling and child labor in the origin households of overseas Filipino workers’, Working Paper No.7, Harvard University, Department of Economics Literature Center.
Yang, D. and Choi, H.J. (2007), ‘Are remittances insurance? Evidence from rainfall shocks in the Philippines’, World Bank Economic Review, Vol. 21 No. 2, pp. 219-248.
Published
2016-09-01
Section
Articles
