Do remittances matter for health outcomes in developing countries? Fresh evidence from a panel vector autoregressive (PVAR) model

Abstract

PurposeThis study aims to contribute to the growing literature on the effects of remittances and the determinants of health outcomes by analysing for the first time the effect of remittances on health outcomes in developing countries using a panel vector autoregression (PVAR) model.Design/methodology/approachThis study uses panel data from 107 developing countries over the period from 1990 to 2018 to examine the effect of remittances on health outcome in developing countries.FindingsThe main findings from study is that remittances improve health outcomes in developing countries. Another finding of this study is that income, trade, foreign direct investment and financial devlopment improve health outcome.Originality/valueThe contribution of this study is fourfold. Firstly, it adopts the PVAR methodology in a Generalized Method of Moments framework proposed by Abrigo and Love (2016). Secondly, it analyses the implications of remittances on health outcomes by relying on two comprehensive measures of health outcomes commonly used in the literature which are life expectancy at birth and the rate of under-five mortality rates. Thirdly, we identify governance and maternal education as the channels through which remittances improve health outcomes in developing countries. Finally, the current paper covers an extensive time span (29 years) and focuses on a large sample (107 countries).