Remittances and agricultural productivity in Burkina Faso

Abstract

In this paper, we examine the interplay between remittances and agricultural productivity in Burkina Faso. We estimate a Bayesian instrumental variables model using data from the 2014 Living Standards Measurement Study. We consider three measures of agricultural productivity: total production, total production per unit of land, and total production per unit of labor. Whatever the measure used, our results reveal a significant and negative association between remittances and agricultural productivity. We show that this effect is robust with respect to misspecification of the production function.

Remittances and agricultural productivity: the effect of heterogeneity in economic activity of farming households in Ghana

“…The result for maize and cocoa is consistent with some existing studies in developing countries, which have found that the effect of receiving remittances as a nonlabor source of income could result in a state of dependency, thereby reducing the labor market participation of the recipient households and their production activities (see Lipton, 1980;Berker, 2011;Dedewanou and Kpekou Tossou, 2022). The negative relationship between remittances and agricultural productivity confirms similar results by Akudugu (2016) but insignificant relationship between remittances and productivity.…”

“…Akpan et al (2014) examine the relationship at the macroeconomic level for Nigeria and find that in the short run remittances have a positive and significant effect on agricultural productivity, but this effect disappears in the long run. A recent study by Dedewanou and Kpekou Tossou (2022) on farming households in Burkina Faso also find that although remittances increase labor input there is a negative relationship between remittances and total agricultural productivity, confirming the findings of Zahonogo (2011). These findings are somewhat puzzling and create a need for further inquiry.…”

“…The existing literature on remittances analyses its household impacts on household outcomes such as assets (Chiodi et al ., 2012), education and health (Clément, 2011), income smoothing (Amuedo-Dorantes and Pozo, 2011) and agriculture production and productivity (Akudugu, 2016; Zahonogo, 2011; Kapri and Ghimire, 2020; Dedewanou and Kpekou Tossou, 2022; Bahadur, 2022).…”

“…Of the few studies on remittances and agricultural productivity globally, only three (Zahonogo, 2011;Akpan et al, 2014;Dedewanou and Kpekou Tossou, 2022) are on countries in SSA and with inconclusive results (see Zahonogo, 2011), using household data from two villages in Burkina Faso found remittances and migration to negatively impact on agricultural productivity. Akpan et al (2014) examine the relationship at the macroeconomic level for Nigeria and find that in the short run remittances have a positive and significant effect on agricultural productivity, but this effect disappears in the long run.…”

“…Of the few studies on remittances and agricultural productivity globally, only three (Zahonogo, 2011; Akpan et al ., 2014; Dedewanou and Kpekou Tossou, 2022) are on countries in SSA and with inconclusive results (see Zahonogo, 2011), using household data from two villages in Burkina Faso found remittances and migration to negatively impact on agricultural productivity. Akpan et al .…”