Abstract
This article has considered the effect of development aid and remittances inflows on wages in the manufacturing sector of recipient economies. The empirical analysis has used a sample of 95 countries over the period 1969–2016 and relied on the two-step system generalized methods of moments. Results show for the full sample that while remittances influence positively wages (notably in remittances-dependent countries), development aid exerts a negative effect on wages. Additionally, the effects of development aid and remittances on wages depend on the prevailing real exchange rate as well as on the values of manufacturing exports.
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