Worker remittances constitute an increasingly important channel for the transfer of resources to developing countries. Behind foreign direct investment, remittances are the second-largest source of external funding for developing countries. Yet, literature on worker remittances has traditionally focused on the impact of remittances on income distribution within countries, on the determinants of remittances at a micro-level, or on the effects of migration and remittances for specific countries or regions. Macroeconomic determinants and effects of remittances have received more attention only recently. Hence, the focus of this paper is on the macroeconomic determinants of remittances and on differences in these determinants between remittances and other capital flows. We find that remittances respond more to demographic variables while private capital flows respond more to macroeconomic conditions. MOTIVATION

Worker remittances constitute an increasingly important mechanism for the transfer of resources from developed to developing countries, and remittances are the second-largest source, behind foreign direct investment, of external funding for developing countries. Yet, literature on worker remittances has so far focused mainly on the impact of remittances on income distribution within countries, on the determinants of remittances at a micro-level, or on the effects of migration and remittances for specific countries or regions. The focus of this paper is thus on four questions: First, how important are worker remittances to developing countries in quantitative terms? Second, what are the determinants driving worker remittances? Third, how volatile are worker remittances to developing countries? Fourth, are remittances correlated to other capital flows?

Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp06025.pdf Non-technical summaryIn this paper, wage and productivity effects of continuing training are estimated and compared in order to analyse who gains from workers' training. Investments in continuing training are undertaken in order to raise the level of qualification in a firm and to secure its economic performance. Whether these investments in training are profitable to the individual, the firm and society as a whole is still unclear although the question is of considerable importance.Most studies on the productivity impact of training take wages as a proxy for productivity.The focus of this paper is on comparing wage and productivity effects in order to study how the training rent is shared between employers and employees. The use of system GMM techniques allows me to account for endogeneity and time invariant unobserved factors.In more detail, wage and productivity effects are estimated and compared using panel data on the industry level in order to analyse the extent to which employer and employees gain from continuing training. This empirical analysis at the sectoral level suggests that the rent sharing aspect of training is important for employer and employees in Germany. Results show that both employer and employees profit from the investment in human capital. The estimated productivity effects of training are higher, on average, than the wage effects.Since the estimated effect of continuing training on productivity exceeds the effects estimated by comparable studies using firm level data, my results hint to the existence of external effects of training on a sector level, that is, spillovers from training between firms in the same sector.The results of former work suggest that skill group heterogeneity of the training impact on wages should be considered. In order to shed light on this issue and to analyse whether the impacts of participating in training on wages and on productivity differ for low and highly skilled workers, I differentiate between these two groups. This extension enables me to analyse whether there are spillovers between the two skill groups. I test whether training participation of high skilled has an influence on wages of low skilled or the other way around.High skilled workers seem to capture a larger share of the rent than low skilled workers. This result is consistent with former work. In addition, I do not find positive external effects of firm-provided training between skill groups.Wage and Pr...

Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp06034.pdf Non-technical summaryAn This paper shows that aggregate unemployment affects not only wages but also individual returns to education. On the basis of a theoretical model, we derive the hypothesis that the wages of less qualified employees are affected differently by changes in the unemployment rate than the wages of higher qualified employees. The main reasons for this are that on the one hand the employment opportunities and unemployment risks of higher qualified employees are better isolated against shocks on the labour market than those of less educated employees. On the other hand the wages of the higher educated may react stronger to changes in the business cycle because lower qualified employees rather leave the labour market than accept lower wages.In addition, the wages of higher qualified employees are rather subject to individual bargaining between employer and employee. Individual bargaining is more sensitive to the topical labour market situation. In contrast, collective bargaining wages are rather stable over time.From our model we conclude that we have to extend the standard Mincer regression to take into account an important factor for individual wages. We include regional unemployment and the interaction term between aggregate unemployment and individual education in order to avoid a misspecification.In our empirical analysis, we use representative individual data and regional panel variation in aggregate unemployment among different German regions.The results show that an increase in regional unemployment by one percent decreases returns to education by about 0.005 percentage points. The observed differences in the regional rates of returns can be almost fully explained by differences in the local labour market situation. This implies that empirical studies on returns to education should take aggregate unemployment into account. Especially international comparisons of the returns to education or comparisons of differents points in time could otherwise suffer from omitted variable bias if the unemployment situation differs strongly between countries or across time.We furthermore check the robustness of our results with respect to the empirical specification and the sample. We split our sample into males and females, East and West Germany, and employees with different tenure. In addition, we take into account unobserved heterogeneity between regions by using fixed effects in a two-step estimation procedure....

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