Megan Shea

Date of Award

2015

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Khemraj, Tarron

Keywords

Latin America, Caribbean, Remittances, Income, Human Capital

Area of Concentration

International and Area Studies

Abstract

The purpose of this thesis is to examine whether remittances have a significant impact on human capital development in Latin America and the Caribbean. Remittances are defined as income transfer from migrants to individuals in the migrants’ home country and are the largest source of income transfer to the developing world. The literature suggests that this additional income may lead to human capital accumulation among recipient families, which could in turn have positive macroeconomic effects. Within the thesis, the macroeconomic benefits of human capital accumulation are explained through the lens of endogenous growth theory and human capital theory. In order to measure human capital, a variety of variables relating to education, health and financial deepening were used. These variables were correlated with four different independent variables, one of which was a measure of remittances. None of the human capital variables had a significant positive correlation with remittances, suggesting that more study on the topic is needed to explain the effects of remittances on Latin American and Caribbean economies.

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