Impact of Migrant Remittances on Health and Education Outcomes in Sub-Saharan Africa

Abstract

This study investigated the impact of international migrant remittances on health and education outcomes of sub-Saharan African countries using 18 sub-Saharan African countries. To account for endogeneity between remittances and health and education outcomes, the paper constructed two simultaneous equation models estimated using the two-stage-least square (2SLS) technique. Findings reveal that remittances impact positively and significantly on health and education outcomes of selected countries. For every 10 per cent increase in remittances, primary education outcome increases on the average by 4.2 per cent, secondary education outcomes by 8.8 per cent, and health outcome by 1.2 per cent. After accounting for individual country heterogeneity, results confirm that remittances still remain a significant factor in accelerating improvements in health and education outcomes in recipient developing (Sub-Saharan African) countries. Other factors such as per capita income, education expenditure, and health expenditure were found to be significant. Policy implications are that policy makers must develop appropriate incentive for migrants to remit, especially policies influencing the costs and channels of remittances.