The impact of migrant remittances from Jordanians working abroad on human capital and economic development in Jordan: empirical evidence

This study examines the impact of remittances on economic growth and human capital development in Jordan, focusing on health expenditure, education, and GDP, using balanced annual panel data from 1990 to 2023. Using autoregressive error models with selected autoregressive lags to correct for serial correlation in the residuals, the relationships between migrants’ remittances and the variables of GDP, education, and health expenditure were analyzed, along with the impact of control variables such as foreign direct investment, trade, inflation, and official development assistance. The results show that remittances do not have a statistically significant relationship with GDP. However, remittances have a significant positive effect on education, contributing to improved access to educational opportunities. Regarding health expenditure, the study finds a negative relationship with remittances, suggesting that higher remittance inflows may reduce spending on health. Furthermore, health expenditure is positively related to education. The study also highlights that foreign direct investment and net official development assistance negatively impact health expenditure and positively impact education, while trade and inflation show no significant relationships with education, health, or GDP. Additionally, net official development assistance is negatively related to GDP. These findings underscore the importance of focusing on the role of remittances in enhancing human capital and economic development, while also considering the broader economic factors that shape sustainable development in Jordan.