Do remittances promote human development? Empirical evidence from developing countries

an article by Chong Siew Huay (Taylor’s University, Subang Jaya, Malaysia), Jonathan Winterton (University of Huddersfield, UK) and Yasmin Bani and Bolaji Tunde Matemilola (University Putra Malaysia, Serdang, Malaysia) published in International Journal of Social Economics Volume 45 Issue 10 (2019)

Abstract

Purpose
The purpose of this paper is to analyse the impact of remittances on human development in developing countries using panel data from 1980 to 2014 and to address the critical question of whether the increasing trend of remittances has any impact on human development in a broad range of developing countries.

Design/methodology/approach
Usual panel estimates, such as pooled OLS, fixed or random effects model, possess specification issues such as endogeneity, heterogeneity and measurement errors. In this paper, we, therefore, apply dynamic panel estimates – System generalised method of moment (Sys-GMM) developed by Arellano and Bond (1991) and Arellano and Bover (1995). This estimator is able to control for the endogeneity of all the explanatory variables, account for unobserved country-specific effects that cannot be done using country dummies due to the dynamic structure of the model (Azman-Saini et al., 2010).

Findings
The effect of remittances is statistically significant with positive coefficients in developing countries. The significant coefficient of remittances means that, holding other variables constant, a rise in remittance inflows is associated with improvements in human development. A 10 per cent increase in remittances will lead to an increase of approximately 0.016 per cent in human development. These findings are consistent with Üstubuci and Irdam (2012) and Adenutsi (2010), who found evidence that remittances are positively correlated with human development.

Practical implications
The paper considers implications for policymakers to justify the need for more effective approaches. Policymakers need to consider indicators of human development and to devise public policies that promote income, health and education, to enhance human development.

Originality/value
The question of whether remittances affect human development has rarely been subject to systematic empirical study. Extant research does not resolve the endogeneity problem, whereas the present study provides empirical evidence by utilising dynamic panel estimators such as Sys-GMM to tackle the specification issues of endogeneity, measurement errors and heterogeneity. The present study provides a benchmark for future research on the effect of remittances on human development.

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Human development in the age of globalisation

a column by Leandro de la Escosura for VOX: CEPR’s Policy Portal

The concept of human development views wellbeing as being affected by a wide range of factors including health and education.

This column examines worldwide long-term wellbeing from 1870-2015 with an augmented historical human development index (AHHDI) that combines new measures of achievements in health, education, material living standards, and political freedom. It shows that world human development has steadily improved over time, although advances have been unevenly distributed across world regions.

Continue reading

And if, like me, you enjoy reading social history you will really like this piece.

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“Every individual has his own insanity”: Applying Vygotsky's work on defectology to the question of mental health as an issue of inclusion

an article by Peter Smagorinsky (The University of Georgia, USA) published in Learning, Culture and Social Interaction Volume 1 Issue 2 (June 2012)

Abstract

In Volume 2 of the Collected Works, Vygotsky argues for more inclusive treatment of people who depart from the developmental norm.

In this essay I review facets of his approach and discuss how they may inform current attention to extranormative mental health makeups, e.g., tendencies toward depression, anxiety, bipolarity, and related neurological influences on personality.

I focus on the following sets of Vygotskian tenets:

1. his belief that mental and cognitive differences do not comprise defects or deficiencies, but rather present developmental channels that depart from the evolutionary norm;
2. his assertion that “secondary disabilities” resulting from stigmatization related to difference produce more deleterious effects on one than does the source of difference itself;
3. his belief that feelings of inadequacy, if socially channeled toward productive roundabout means of mediation, can productively promote human growth within existing cultural channels; and
4. his conviction that the goal of education and human development is to promote progress toward a culture’s higher mental functions – i.e., those ways of thinking endemic to particular cultural orientations to the world – rather than to remediate sources of difference.

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