Impact of Workers’ Remittances on Human Capital in Least Developed Countries in ECOWAS

Purpose - This paper intends to investigate the impact of workers’ remittances on human capital (HC) in least developed countries (LDCs) in the Economic Community of West African States (ECOWAS). Design/Methodology/Approach - This study made use of balanced panel data from 2000 to 2018. It employs two-stage least squares (2SLS) on equations that contain the endogeneity problem and it employs the Fixed or Random Effects model, based on the Hausman test results, on equations without endogeneity problems. Findings - Empirical results portray statistically significant relationships between remittances and health outcomes. While remittances reduce mortality rate and undernourished prevalence, they raise life expectancy. For education outcomes, they raise tertiary enrollment. However, there is no significant impact of remittances on primary and secondary enrollment and also on completion rate. Research Implications - Existing studies in the case of Sub-Saharan Africa (SSA) region mostly focus on the impact of remittances on economic growth, income inequality and poverty. There is a scarcity of studies that focus on the impact of remittances on HC of LDCs in the ECOWAS. In addition, the existing works do not address the endogeneity problem in their studies. Consequently, our work takes the endogeneity problem into account in the estimations.