International Remittances Research Articles

The impacts of international remittances on child human capital accumulation

The impacts of international remittances on child human capital accumulation

The Impacts of International Remittances on Child Labor and Household Welfare

The Impacts of International Remittances on Child Labor and Household Welfare

Remittances and income inequality in the Philippines

The economic and social consequences of remittances are attracting greater attention from scholars and policymakers. This study investigates how international remittances affect income inequality in a highly out‐migration and remittance‐dependent country, the Philippines. This study shows that the inequality‐remittances nexus is inverse U‐shaped, suggesting that remittances have an income‐equalising effect only after a threshold level, validating the existence of a remittance Kuznets Curve. The findings are robust to various measures of income inequality. Also, Lind and Mehlum's (2010) test of an inverse U‐pattern between inequality and remittances verifies this non‐linearity.

Can remittances contribute to financing climate actions in developing countries? Evidence from analyses of households' climate hazard exposure and adaptation actors in SE Nigeria.

Migrant remittances are potentially significant sources of funding for climate change adaptation and resilience building in developing countries. However, very little is understood about the linkages between climate actions and remittances at the household level. It is not clear how remittances can affect households’ responses to climate change. This paper presents evidence from analyses of the associations between remittances to households, their climate hazard exposure, and adaptation actors. It uses concurrent data on international remittances receipts, three climate change related hazards (flooding, intense and irregular rainfall), and main adaptation actors (self/family, community, government, and NGOs) from over 600 households in South Eastern Nigeria. The results showed that household incidence of remittances is low (15%) while exposure to climate hazards is higher (flooding: 41.2%, intense rainfall: 47.1%, irregular rainfall: 29.9%). Nominal (contingency coefficient) associations between remittances and household climate hazard exposure and remittances and household adaptation actors were mostly moderate and insignificant. Therefore, households that received remittances and those that did not were not significantly different in terms of their exposure to climate hazard and main actors in climate adaptation. Self/families were the main actors in household climate actions. Governments and NGO actors were less prominent. The results suggest that unregulated remittances have limited impact on household climate hazard exposure and adaptive actions. However, there are indications that the contribution of remittances to financing climate adaptation may be enhanced by addressing issues with cost of remitting and remittee understanding of climate change to increase remittances volumes, incidence, and use.

Fintech, Regtech and Suptech: Three Dimensional Approaches to Digital Finance

Every institution is now doing business transactions through digital financing system. Digital financing solutions offer great potential to overcome challenges and contribute toward achieving universal access to financial services. However, it is noticed that insufficiency of technological up-gradation and various issues created by hackers that might include fraudulent online transactions as an example, hampers people who are not aware of the other side of technology. There are three stages in the implementation of digital finance viz., Fintech, Regtech and Suptech. ‘Fintech’ is an application of Technology for financial services that include; digital payments and e-money, international remittances, personal and business loans, peer-topeer lending platforms, crowd funding platforms, Robo-advisors, Crypto currencies like Bitcoin, Altcoin, etc. ‘Regtech’ is a contraction of the terms ‘regulatory’ and ‘technology’ and it describes the context of regulatory monitoring, reporting, and compliance. ‘Suptech’ is derived from ‘Supervision’ and ‘Technology’, which monitors ‘Fintech’ and ‘Regtech’. The rise of Fintech will undermine the widespread assumption that the primary source of systemic risk in the financial sector is the domination of large, “systemically important” banks and other financial institutions. On this backdrop, this paper aimed to explore the importance of Fintech, Regtech, and Suptech as three stage approach to digital finance. This paper makes a focus as the special dynamics regarding how Fintech, Regtech, and Suptech as three stage approach to digital finance work and will become the better substitute of banks and other financial systems. Based on review of secondary sources, this paper highlights: 1. the problems and obstacles faced by corporate entities in digital finance and 2. the interdependency of three dimensions of technology viz., Fintech, Regtech and Suptech. Keywords: Digital finance, Financial literacy, Fintech, Regtech and Suptech.

Remittance-Growth Nexus in Ethiopia: An Evidence from ARDL Bound Testing Approach

The effect of international remittance inflows on economic growth has become a debating topic among policymakers. This study has used the data of 1980 to 2018. The result of the analysis revealed that the Long-run and short-run impact of remittance is negative at 1% and 5% significant level. This implies, the consumption compensatory behavior of remittance income. Other determinants of growth; such as gross capital formation, gross national saving, and foreign direct investment are appeared to be positive at < 5% significant level impacting growth in Ethiopia both in the long run and short run except for the short-run result of gross national saving is not available. While external debt and terms of trade were significant and negatively associated with growth in both the long run and short run at 1% significant level. The policy implications are, the development agents need to focus on controlling the informal flow of money (black market) through reducing transaction costs and training households receiving remittance to divert from consumption to investment. Thus, remittance inflows must be invested in the productive sector before it can positively impact economic growth and thus, for the ease of the more investment climate the better economic development. Keywords: ARDL, Economic Growth, ECM, Ethiopia, Remittance. DOI: 10.7176/JESD/12-23-03 Publication date: December 31 st 2021

Harnessing remittances for the poor: the role of institutions

ABSTRACT This paper investigates the direct effect of institutions on poverty and explores whether the remittances and poverty link can be strengthened by institutions in Sub-Saharan Africa. The results suggest that a country characterized by sound financial development and good and stable government with systems to control corruption and attract investment will provide the enabling environment to reduce the rate, depth and severity of poverty. Such quality institutional attributes reinforce the effectiveness of international remittances in reducing poverty.

The role of social identity in improving access to water, sanitation and hygiene (WASH) and health services: Evidence from Nepal

SummaryMotivationCOVID‐19 has revived focus on improving equitable access to water, sanitation and hygiene (WASH) and health services in developing countries. Most public programming tends to rely on economic indicators to identify and target vulnerable groups. Can expanded targeting criteria that include social status help to improve not only targeting, but also equity in access to WASH and health services?PurposeThis article assesses the role of social identity in mediating access to WASH and health services, controlling for economic disadvantages such as household wealth, income sources, and assets.Methods and approachWe use regression analysis applied to the 2016 Nepal Demographic and Health Survey (DHS) to estimate the relationships between social identity and access to WASH and health services, controlling for wealth (using wealth index quantiles) and remittances (using indicator variables for domestic and international remittances).FindingsWe find that differences in access are mediated in large part by caste, and religious and ethnic identity, especially in rural areas, suggesting that the supply of such services is lower for historically disadvantaged communities. In addition, communities with least access are not necessarily the most economically disadvantaged, indicating that relying solely on traditional economic indicators to target programmes and interventions may not be sufficient to improve equity in access to public health services.Policy implicationsThe results make a case for broadening indicators beyond the economic criteria for improving targeting of public funds for more inclusive development.

Remittances, financial development and poverty reduction in Sub-Saharan Africa: Implications for post-COVID-19 macroeconomic policies

To design and implement effective post-COVID-19 macroeconomics policies to tackle poverty in sub-Saharan Africa (SSA), policymakers need to understand the factors shaping poverty in the region. This paper investigates the effect of international remittances and financial development on poverty alleviation in 44 sub-Saharan African SSA countries from 2010 to 2019. The instrumental variable generalised method of moment technique results indicated that while remittances increase poverty, financial development contributes significantly to poverty reduction. The results consistently revealed that remittances increase both male and female poverty rates, while financial development significantly reduces male and female poverty rates. Other factors such as economic growth, foreign direct investment, and trade openness contributed significantly to reducing poverty. In contrast, government expenditure and foreign aid were found to increase poverty rate in SSA. These results are robust to the Lewbel two-stage least squares estimator. The practical implications of these findings for post-COVID-19 macroeconomic policies in SSA are discussed.

The impact of foreign direct investment and international remittances on poverty: evidence from Sub-Saharan African Countries in 1996–2017

This paper investigates the causal relationship between Foreign Direct Investment, remittances and poverty in Sub-Saharan African countries using simultaneous equations models over the period 1996–2017. Global panel results showed that there is a bi-directional causal relationship between remittances and poverty as well as FDI and remittances. However, there is unidirectional causality from FDI to poverty. The results suggest that there is a bidirectional causality between remittances and poverty in Sub-Saharan Africa, West, East and South Africa, while unidirectional causality from remittances to poverty in Central Africa. Other results show that in Central, East and South Africa, there is a bidirectional causality between FDI and poverty, while unidirectional causality from FDI to poverty in Sub-Saharan Africa and West Africa. Policy implications of this study suggest that essential for governments in Sub-Saharan Africa give great importance to increase the inflow of remittances to support the achievement of Sustainable Development Goals for 2030.

Effects of trade openness on renewable energy consumption in OECD countries: New insights from panel smooth transition regression modelling

This paper investigates the effects of trade openness on renewable energy consumption in 35 OECD countries for the period between 1999 and 2018. A panel smooth transition regression model is built. Imports, exports, and total trade are used as proxy variables of trade openness. To reduce the error of omitted variables, a control variable pool is constructed, consisting of foreign direct investment, access to electricity, international remittances, GDP per capita, domestic inflation rate, and carbon emissions. The empirical results demonstrate the existence of a strongly nonlinear relationship between trade openness and renewable energy consumption. In terms of imports, three structural breakpoints are identified: 33.732, 40.945, and 76.395. When the imports reach 40.945% of the GDP, their effect on renewable energy consumption will switch from promoting to inhibiting. Both exports and total trade have one structural breakpoint and can constantly promote renewable energy consumption. The analyses on the temporal and spatial variations of the effects show that imports, exports, and total trade all positively impacts renewable energy consumption between 1999 and 2018. Their effects first follow a downward trend, which later change to an upward trend. Imports, exports, and total trade exert the least impact on renewable energy consumption of OECD Asia Oceania. Regarding specific countries, exports and total trade most strongly impact the renewable energy consumption in Mexico and exert the least impact on the renewable energy consumption of the United States.

International remittances and nonfarm entrepreneurship among the left‐behind: Evidence from Nepal

AbstractNepal has one of the largest personal remittances‐to‐gross domestic product ratios globally, which raises questions regarding the role of remittances in key welfare–related outcomes among the left‐behind population. This paper assesses the impact of remittances from international migration on the left‐behind households’ engagement in nonfarm self‐employment and on the revenues of the nonfarm enterprises they operate. The empirical analysis is based on a Nepal household survey that includes an enterprise module for 2011 and on an instrumental variable‐tobit econometric specification. In accordance with Gronau's theoretical framework, remittances were found to discourage women's engagement in nonfarm self‐employment (disincentive effect), whereas there was no significant effect on men. Consequently, we find that the disincentive effect was sufficiently strong to exert a negative impact on the revenues of nonfarm enterprises operated by the left‐behind.

Remesas y agencia económica de las universitarias en el Valle del Mezquital

The article’s objective is to analyze the economic agency acquired by university students through the international remittances support network. During September and October 2019, five indepth interviews were conducted with female law students from the Actopan Higher School of the Autonomous University of the State of Hidalgo. Young women’s households receive remittances whose function is to help them economically, a network built through the family connection with their maternal uncles. The student’s mothers are sorors which allows young women to obtain economic agency. This analysis contributes to the knowledge about one of the effects of remittances on households in the Mezquital Valley, Mexico. The results of the study only focus on one region of the country.

Climbing up the Ladder and Watching Out for the Fall: Poverty Dynamics in Rural Bangladesh

This paper analyses poverty dynamics in rural Bangladesh using a nationally representative panel dataset of 5,020 rural households interviewed in 2011/12, 2015, and 2019. Findings show that education, savings, assets, international remittance, non-farm employment, substantial safety net transfers, and women’s empowerment are key factors in breaking chronic and transient poverty. Rural infrastructure development and market access through improved connectivity are also critical for sustained poverty alleviation. On the other hand, woman-headed households (widowed, divorced or abandoned) are found to be particularly vulnerable to impoverishments. The results are consistent across multinomial logit, simultaneous quantile regression, and panel fixed effects models. Thus, policies and programs that address the determinants of chronic and transient poverty identified in this study hold promise for sustained poverty reduction in rural Bangladesh.

Uluslararası İşçi Dövizlerinin Finansal Gelişme Üzerindeki Etkisi: 1974-2019 Dönemi Türkiye Deneyimi

In this study, workers’ remittances on financial development in Turkey are analysed using the Autoregressive Distributed Lag Bound (ARDL) method from 1974 to 2019. In the analysis, the dependent variable, which is the domestic credit to the private sector by banks (percent of GDP), is used as an indicator for financial development. In addition to international workers’ remittances, other independent variables include GDP per capita, interest rate, and inflation. International remittances are found to affect financial development positively; however, the effect is slight. In addition, growth affects financial development positively, inflation negatively, and the impact of interest is statistically insignificant.

COVID-19 and its Impact on Labour Migration: The Case of Asia

Globalized economy relies on labour migration. In the current effort to rebuild the future in an early post-COVID world, the impact of this health crisis had on the international migration workers should be studied. For more than a year now, professionals of different skill levels have been obliged to either return to their home country or to stay trapped in their destination country unemployed or with little access to social security or the ability for self-protection by potential virus infection. The impact was huge both for the origin and the destination countries. One of the most important effects was on international remittances. Some initiatives were taken to manage this situation. This policy brief aims to enlighten new areas on which extra effort should be made regarding labour migration.

Effect of International Remittance on Economic Growth: Empirical Evidence from Ethiopia

Effect of International Remittance on Economic Growth: Empirical Evidence from Ethiopia

Remittances and Inequality: The Post-Communist Region

This study aims to investigate the impact of international remittances on income inequality in the post-communist region. The association between the variables is examined via static and dynamic panel models. Using macroeconomic data from 27 countries over the period 1991-2014, we discover that income inequality progresses along a U-shaped course as a country becomes more dependent on remittances. For most of the countries, the relationship between remittances and inequality is inverse. When remittances account for more than 20% of GDP, they exacerbate economic inequality. This finding challenges the view that remittances should only be viewed as a pro-poor redistribution mechanism because in certain cases, additional migrant transfers may actually increase income inequality.

Prevalence of Poverty and Inequality in Ethiopia: Using Ethiopian Socio-Economic Survey (ESS) 2013 and 2015

ABSTRACT The core aim of this study is to develop a poverty and income inequality profile of Ethiopia and investigate micro-level poverty-inducing factors. The study used the 2013 and 2015 socioeconomic data sets accessed from the RULIS/FAO database. The three methods used (Foster, Greer, and Thorbecke index; logit regression; and ordinary least square) confirmed that international remittance, access to electricity, education of head of the household, presence of large number of the workforce in a household, and generating more income significantly contribute to poverty reduction. Conversely, household size, owning a house, and access to social assistance significantly contribute for poverty escalation.

Remittances and Protests against Crime in Mexico

The resource mobilization theory has long emphasized the role of resources in facilitating collective mobilization. In turn, recent research on crime and insecurity in Mexico has drawn attention to the role of local networks of solidarity in facilitating mobilization against crime. We rely on these two literatures to propose that remittances — that is, the resources that emigrants send to their relatives left behind — deserve attention as international determinants of this type of non-violent anti-crime mobilization. Further, relying on recent research on remittances’ impact on political behavior, we hypothesize that the relationship between remittances and contentious action is non-linear, exhibiting a positive effect at low to moderate levels of inflows and declining at higher levels of remittances. We contend that at low to moderate levels, international remittances provide the necessary resources for collective activation. At greater levels of remittance inflows, however, lessened economic and security grievances imply a decline in the probability of protesting. Overall, we show that emigrant remittances matter for organizing protests against criminality at the subnational level but that they produce both an engagement and disengagement effect, depending on the size of the inflows.