DETERMINING THE FACTORS THAT INFLUENCE MIGRANT WORKER REMITTANCE: A GULF COOPERATION COUNCIL CASE STUDY

Abstract

This paper examines and evaluates the macroeconomics factors driving the workers’ remittance flows from GCC countries to eight Middle East and South Asian Countries during period 1989 to 2010. The gravity model has approached to estimate remittances, utilizing a variety of panel data techniques. The estimator indicates that remittances respond more to GCC (host countries) macroeconomics activities, than to changes in the macroeconomic activities in the Middle East and South Asian Counties (home countries). The results also show the differential in the wage rates between the GCC countries and the Middle East and South Asian counties had a significant positive effect on remittance flows. However, the estimator also indicates distance was not a significant proxy to impact on the remittance flows.