Remittances, growth and poverty: New evidence from Asian countries

Abstract

The present study re-examines the effects of remittances on growth of GDP per capita using annual panel data for 24 Asia and Pacific countries. The results generally confirm that remittance flows have been beneficial to economic growth. However, our analysis also shows that the volatility of capital inflows such as remittances and FDI is harmful to economic growth. This means that, while remittances contribute to better economic performance, they are also a source of output shocks. Finally, remittances contribute to poverty reduction -especially through their direct effects. Migration and remittances are thus potentially a valuable complement to broad-based development efforts.

The Impact of Foreign Remittances on Poverty Alleviation: Global Evidence

“…United Nations (2011) finds that those remittances significantly mitigate poverty in recipient countries but the results are more consistent for countries with remittances larger than 5 percent of GDP for 77 developing countries over the period from 1980-2008. Imai et al (2013) discover that remittances contribute to poverty lessening -particularly through their direct effects for 24 Asia and the Pacific economies during 1980-2009 and used fixed effect-2SLS and randome-effects-2SLS approaches. The results of the study generally verified that remittance inflows have been constructive to economic growth.…”

Remittances Impact on Economic Growth, Domestic Savings and Domestic Capital at the Presence of ODA and FDI in Selected MENA Countries

“…Consequently, we estimate the three equations simultaneously. Remittances seem to be an endogenous variable that requires using multiple equation models techniques, Imai et al (2014), including SURE, 2SLS and 3SLS. This is for ensuring the true relationship between the variables instead of using one technique.…”

“…In addition, migrants may remit when intent to return to their home country or for inheritance back to their home countries or buy services to maintain their assets, Lucas and Stark, (1985), Chami et al (2003). Imai et al (2014) provides an evidence from Asian countries that confirm that remittance has positive impact on economic growth, it also found a positive impact of remittance on poverty alleviation.…”

Heterogeneity of household structures and income: Evidence from Zimbabwe and South Africa

“…Nonetheless, potentially confounding effects of migration may arise from the inclusion of remittance income (e.g. Imai, Gaiha, Ali, & Kaicker, 2014). In our measures of household income we exclude the income gained from remittances 3 .…”