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Intra-African migration and the real exchange rate

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  • Tien, Morel

Abstract

Africa’s openness to migration is strongly continental (about 80% of African migrants are settled in Africa). This paper explores how intra-continental migration impacts the real exchange rates of African economies. International migration may impact the real exchange rate through many pathways (demand-side and supply-side effects on prices, indirect effects through demography structure and remittances), thus leading to contradictory effects. Using a sample of 51 African countries over the period 1990–2019, econometric estimations show evidence that an increase in net intra-African migration exerts an appreciating effect on the real exchange rate of host countries. This finding holds when controlling for potential endogeneity using gravity-based instruments for migration.

Suggested Citation

  • Tien, Morel, 2024. "Intra-African migration and the real exchange rate," International Economics, Elsevier, vol. 179(C).
    • Handle: RePEc:eee:inteco:v:179:y:2024:i:c:s2110701724000490
    DOI: 10.1016/j.inteco.2024.100526
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    More about this item

    Keywords

    Intra-African migration; Real exchange rate; Demographic structure; Remittances; Current account;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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