First Faculty Advisor
Worker; Remittances; Latin America; Caribbean; Macroeconomic; Determinants; Honors Project; Sathiavanee; Veeramoothoo
A regression analysis was performed to identify which macroeconomic factors influence the magnitude to worker remittances to over thirty Latin American and Caribbean countries. Age dependency ratio, land area, net migration, labor force, population and unemployment were found to be significant predictors of remittances. A time series exponential model was developed to forecast the level of remittances for the next ten years. The results suggest that remittances to Latin American and Caribbean countries will reach USD 190,810 million in 2018.
Based on the above findings, this paper will help scholars understand better what drives worker remittances in Latin American and Caribbean countries and provide an insight into unofficial capital flows from developed to developing countries in the global economy, now and in the next ten years. This forecast may be of further benefit to receiving countries in that it may help to develop economic policies that may promote both development and economic sovereignty. A comparison of money received as remittances and money received from foreign direct investment is also provided. The growing amount of remittances flowing from developed to developing countries needs to be properly accounted and budgeted for, to avoid economic loss in the future. The better remittances are understood and the greater the accuracy of official remittance figures, the better policies will be at regulating the situation.