Impact of Remittances on Agricultural Labor Productivity in Sub-Saharan Africa

Abstract

In recent years, Sub-Saharan Africa has been attracting considerable remittance flows. These funds, sent to households usually working in the primary sector, could stimulate the productivity of labor in this sector while improving the human capital. This paper investigates the role of remittances on agricultural labor productivity in Sub-Saharan Africa using the system-generalized method of moments (system-GMM) on a panel data for 39 countries from 2000 to 2016. The results reveal that remittances have a strong negative impact on agricultural labor productivity. The analysis also finds that higher GDP per capita and higher human capital generate lower agricultural labor productivity. Furthermore, it provides evidence of a positive link between trade openness and agricultural labor productivity in the primary sector.