CASE STUDY: From shock absorber to shock transmitter: Determinants of remittances in Sub-Saharan Africa

Abstract

Workers’ remittances to developing countries have substantially increased over the past decade, both globally and in sub-Saharan Africa. They have been argued to be shock absorbers, increasing when home economies face economic difficulties and have been shown to alleviate poverty. During economic downturns, however, migrant workers are often the most vulnerable. As migrants lose their incomes or even their jobs, the global scope of the current crisis may turn remittances into a shock transmitter. Faced by this perspective, what can home countries do to shelter themselves? This paper investigates the determinants of remittances in sub-Saharan Africa and suggests some possible policy responses.