The Role of Workers’ Remittances in Economic Growth: The Sri Lankan Context

Abstract

Workers’ remittances have grown in importance as a source of foreign exchange in Sri Lanka over the past few decades. Many Sri Lankans migrate to other countries in search of employment and remit their earnings back to their families in their home country. Though workers’ remittances tend to uplift the financial situation of receivers, it is doubtful whether remittances have a real impact on the growth of an economy. This has been an area of interest to may research scholars. Since Sri Lanka is a recipient of a large amount of remittances, it is worthwhile to identify the relationship between workers’ remittances an economic growth in the country. Hence, this study is focused on identifying the significance of the relationship between workers’ remittances and economic growth, in the Sri Lankan context. As per the results of the statistical analysis conducted, a negative, but insignificant relationship is found between workers’ remittances and economic growth. The analysis is followed by the conclusion, where the author concludes that, though workers’ remittances is a steady source of foreign exchange, seeing that it has a negative impact on growth, the country should not rely on workers’ remittance inflows as a source for growth