Sammendrag
In this thesis, I study the inflow of remittances into the Association of Southeast Asian Nations (ASEAN). The flow of remittances has increased massively during the recent decades and is expected to continue growing as migration increases as a result of globalization (Maimbo and Ratha, 2005). Many Southeast Asian countries have a long tradition of migration, largely due to the labor surpluses in these countries. Correlated to the increase in outflow of migration is the inflow of remittances. Many migrants feel an obligation to financially assist the family in the place of origin. Carling (2008) found a positive association between remittances and the household size at origin and a negative association to the household size at place of destination. An interesting aspect of the flow of remittances is the usage at the receiving end. Is the money only used for consumption and therefore have small impacts on economic growth, or is the money invested in education, live stock or fixed capital that can boost economic growth in the receiving country? Hence, the main purpose of this thesis is to find the impact of remittances on economic growth. Using panel data for the time period 1980-2012, I use both Ordinary Least Squares (OLS) method and Instrumental Variable Two-Stage Least Squares (IV 2sls) to estimate the impact, and decide to rely on the OLS estimates after ensuring that no endogeneity problems exist. The estimations state that remittances have a mixed impact on economic growth.