Migration policy, remittance inflows and economic growth in Cambodia

Labor migration is a recent phenomenon, yet due to globalization, it has become a big issue. Therefore, it requires proper policy for harnessing labor migration and remittances to enhance economic development. With significant amount of remittances has been sent into the country, the effect of remittance inflows could not be overlooked. Therefore, our main objectives of the study are to provide brief overview of migration policy in Cambodia and Thailand and to investigate the effect of remittance and migration policy of Cambodia on economic growth in Cambodia. Employing simple regression model with data covering from 1993 to 2016, the models show that remittances and migration policy of Cambodia have positive significant impact on economic growth. The outcomes from the models indicate that remittances have contributed 0.118% to the Cambodia’s economic growth. Moreover, using migration policy in 2010 as a dummy variable, the model found that economic growth for post-policy is 0.39% higher than the pre-policy. Remittances are found to have positive significant effect on economic growth due to high increase in remittance inflows and because of the increase in uses of remitted money in productive activities such as enterprises, agriculture and healthcare in recent years. Our study is of great interest for labor economic policy makers and a good contribution to literature of migration in the case of developing countries where labor migration and remittances become an interesting topic.