Remittances and public finances: Evidence from oil-price shocks

Abstract

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Remittances and Public Finances: Evidence from Oil-Price Shocks * Zareh Asatryan Benjamin Bittschi Philipp DoerrenbergMarch 3, 2016 AbstractWe study the effect of inflowing remittances -a major source of capital for many countries -on tax-revenues and tax-policy. Instrumenting remittances with changes in the oil-price interacted with a country's distance to oil-producing countries, we find that remittances have a large positive effect on VAT revenues but no effect on income-tax revenues. This suggests that remittances often escape the income tax but can be taxed via consumption. We further show that tax policy is responsive to shocks in incoming remittances: remittances make the adoption of VAT-systems more likely, and they lead to lower VAT-rates and higher income-tax rates.JEL Classification: F24, H20, O23.

Economic and Noneconomic Forces on Remittance Receiving: A Panel Analysis of Top Remittance Sending Countries towards Bangladesh

“…Because of the increase in crude oil price, major host countries need more labor for gearing up the development activities which are financed by the surplus oil revenues. The finding supports (Asatryan et al, 2017;Islam & Nasrin, 2015;Naufal & Termos, 2009;Umair & Waheed, 2017).…”

“…Makhlouf and Kasmaoui (2017) carried out a study where oil price is the significant macroeconomic determinants of remittances and any change in the oil price has an exogenous shock in the economy of Morocco. Same result was found by Asatryan, Bittschi, and Doerrenberg (2017) after exploring price change in oil price is a strong determinant of inwards remittances receiving countries.…”

The asymmetric impact of oil prices on remittances: evidence from India

“…How remittances are associated with oil prices? Given the fact that large migrant importing countries are also oil exporters, according to Snudden () and Asatryan et al (), migration flows, remittances and oil prices are potentially linked. Therefore, dynamics of remittances should be explored by taking into account the oil prices.…”

Investigating the Multivariate Granger Causality between Remittance, Government Expenditure and Economic Growth in Ethiopia

“…Ever than before, in the past couple of decades, international migration was tremendously increasing in the global trend (Brunow et al, 2015). According to the United Nations, in 2000 there were 175 million people (2.8% of the world's population) live outside their home country, after a decade the figure increased to 232 million in 2013 (Asatryan et al, 2017) and reaching to the peak 258 million in 2017, which measured 3.7 % of the world population distribution (The World Bank, 2018;United Nations, 2017). This trend has caused to intensity of the money and capital transfers from the destination country of the migrants to their origin countries, this can be known remittances (Goschin, 2014).…”