Do Remittances Increase Agricultural Productivity? The Case of Ghana

University essay from Lunds universitet/Ekonomisk-historiska institutionen

Abstract: Abstract: Over the last decades, remittances have significantly gained in importance for developing countries. Using recent household data, this thesis assesses the impact of remittances on agricultural productivity for the case of Ghana. Accounting for sample selection bias and endogeneity concerns, an overall positive but modest impact of remittances emerges. Yet, this estimate discerns crucial differences arising due to a household's socio-economic background. In particular, quartile regressions reveal a non-linear pattern, pointing to the strongest impact of remittances among lower-medium income classes. Further, this thesis estimates the impact of remittances on the expenditure on crop inputs as one potential channel to explain the differential impact of these monetary flows across income classes. As remittances are found to also influence crop expenditure stronger in lower income classes, this pattern complements the previous results. Our findings illustrate the need for a more comprehensive approach to assess the impact of remittances in the agricultural context.

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