Macroeconomic impact of workers' remittances on output growth: evidence from Turkey

Thesis Type: Postgraduate

Institution Of The Thesis: Middle East Technical University, Faculty of Economic and Administrative Sciences, Department of Economics, Turkey

Approval Date: 2005

Thesis Language: English

Student: Pınar Yaşar

Supervisor: AYSIT TANSEL


In this study, a demand oriented simultaneous equation macroeconometric model with a dynamic perspective is constructed in order to investigate the impact of workers̕ remittances on output growth via their effects on key macro variables such as private consumption, investment and imports for Turkey. The study covers the period of 1964-2003 on an annual basis. Results of the analysis suggest that workers̕ remittances affect output growth in a positive manner through the multiplier process. It is found that the highest induced growth rate by remittances to output growth belongs to the early 1970s especially the year of 1973, which corresponds to the date of first oil shock and also the end of labour migration to Europe. Thus, it is concluded that although workers̕ remittances have been mostly used for consumption and imports as mentioned in most of the studies both for Turkey and other countries, remittances contributed to economic growth of Turkey positively through the multiplier process especially in the early 1970s.