Remittance Recipients Research Articles

Navigating the impact of remittances on environmental quality in Africa: The crucial role of institutional quality

The Sub-Saharan African (SSA) region remains the world's largest recipient of remittances. Due to growing concerns over climate change issues, recent studies have examined how these financial flows have affected environmental quality. Sundry variables were controlled in such studies concerning the remittances-environment nexus, including institutional quality. Notwithstanding that remittance and institutional quality are imperative, their combined effect on environmental quality has been overlooked. The present study has inspected how remittances and institutional quality have jointly influenced environmental quality in 44 economies in the SSA region between 2000 and 2022. Using PMG-ARDL analysis, the findings revealed that remittances had a negative long-term impact on environmental quality. Conversely, the study found that institutional quality positively affected the per capita ecological footprints, as measured by the six indicators' average. Furthermore, the results indicated that improvements in institutional quality over time mitigated the adverse impact of remittances on the environment in the sampled SSA countries. Additionally, a threshold level of institutional quality effectively moderates remittances' detrimental effects on environmental quality were identified. Therefore, most regional countries must enhance their institutional quality to mitigate the negative environmental impact of remittances.

The Impact of Remittances on Food Inflation in Bangladesh: An ARDL Approach

Purpose of the study: This study aims to investigate how Bangladesh's food inflation is affected by remittance influx. Methodology: The analysis utilizes secondary data collected from 2005 to 2022. In order to accomplish the goals, this study employs the food inflation rate as an endogenous variable, while workers' remittance, official exchange rate, and broad money supply are used as exogenous factors. The data is sourced from the World Development Index (WDI). In this investigation, co-integration is assessed using the Autoregressive Distributed Lag (ARDL) model to provide an accurate outcome. Findings: The study's findings show that, both in the short and long term, the influx of remittances from migrants has a positive and considerable impact on driving up food inflation. This analysis shows that while having a negative short-term impact, the money supply and exchange rate have a long-term, positive, and considerable influence on food inflation. Application of the Study: This research proposes that promoting agricultural output and motivating recipients of remittances to invest in income-generating activities can effectively reduce their reliance on food consumption. If these recommendations are effectively followed, the inflow of workers' remittances will have a positive impact on the economy and contribute to reducing inflationary challenges. Originality of the study: By employing the most recent data set and cutting-edge methodology, the present research adds to the body of available research by demonstrating a link between food inflation and remittances.

International remittances and labor supply in Nigeria: Do educational attainment and household income matter?

AbstractThe effect of remittances on the labor supply decisions of recipients remains a subject of contention. To contribute to the debate, we investigate how the educational attainment and household income of remittance recipients shape their decisions to work. Using data from the 2018–2019 living standard measurement survey for over 61,000 Nigerians and applying the instrumental variable probit and Tobit techniques, we find that remittances are associated with an occupational switch from agriculture to nonagricultural (paid jobs and nonfarm enterprises) works. Specifically, the results show that remittance recipients are more likely to exit or reduce the hours worked on the farm, regardless of educational attainment and household income status. On the other hand, remittances promote labor supply to paid jobs and nonfarm enterprises, especially among the less educated in Northern Nigeria. In terms of household income, the positive effect of remittances on nonfarm jobs only holds for individuals in the top income quartile, regardless of their region of residence. Our findings are robust to alternative estimation techniques and hold important cues for policymakers.

Migrant remittances and the adoption of information and communication technology

In this study, we demonstrate that migrant families adopt ICT more than non-migrant households, the diffusion is higher among the recipients of remittances resulting from the long-duration, long-distance international migration than the short-duration, short-distance migration, and that foreign remittance recipients adopt advanced technologies to a greater extent compared to domestic remittance-recipients. We empirically test these hypotheses by using data on 160,624 households from the 2019 to 20 round of the Pakistan Social and Living Standards Measurement Survey and employing an instrumental-variable strategy as well as generalized two-step Heckman and Augmented Inverse Probability Weighting estimators. We come up with evidence of the significant effects of remittances on ICT adoption. Households with at least one domestic or international migrant, on average have 0.27 per capita mobile ownership and 0.12 higher probability of having internet at home compared to non-recipient households. This effect is visible more among international-remittance than domestic-remittance-receiving households. ICT adoption also increases with the amount received. We find that remittances accelerate the adoption of smartphones and social media apps. Besides, while international remittances substantially increase the use of smartphones, internet and social media apps, domestic remittances mainly improve basic phone adoption. Remittances also help reduce the rural-urban and male-female digital divide.

Delving the influence of socio-economic, demographic and migration factors on utilization of remittances in the agricultural sector in a high out-migrating region in India

In developing nations, remittances play a vital role in the development of the society. Remittances serve as a substantial income stream for rural households, empowering them to invest in farming activities, procure resources, and enhance their overall quality of life. This study focuses on investigating remittance utilization patterns in agriculture and how do socio-economic, demographic and migration factors influence remittance utilization patterns in agriculture in the Middle Ganga Plain region (Eastern Uttar Pradesh and Bihar) of India? The study utilizes the data from the Middle Ganga Plain (MGP) migration survey (2021) conducted by the International Institute for Population Sciences, Mumbai. With the help of bivariate analysis, the study explores the relationship between socioeconomic and migration characteristics and the utilization of remittances in the agricultural sector. The Chi-Square test validates the findings, followed by a Binomial Logistic Regression Model for further analysis. The study reveals that marginalized social groups are more inclined to use remittances for agriculture due to their active involvement in agriculture. Furthermore, households with larger landholdings demonstrate an increased likelihood of remittance utilization across all agricultural sectors. Additionally, it was observed that remittances in agriculture were more prevalent among female-headed households. Moreover, parents who are recipients of remittances tend to allocate their funds to agricultural activities. The significant positive correlation between monthly remittance receivers and total agricultural expenses underscores the importance of remittances in rural development. This study provides valuable insights into remittance utilization patterns and associated factors in the agricultural sector, highlighting the need for targeted policies and interventions to enhance the efficient and effective use of remittances in agriculture, ultimately contributing to rural economic growth and development.

Beyond ‘Those Who Leave and Those Who Stay’: the simultaneous impacts of co-agency in migration

ABSTRACT What are the impacts of migration on those directly involved in it: those who stay and those who leave? The deceptive simplicity of this question becomes obvious once we look at the diverse and mutually contradictory empirical answers it has received. On the basis of Web of Science data, we provide a mapping of existing studies on migration’s impacts, which reveals a clearly pronounced modularity between different disciplines and theoretical approaches, with psychological studies on migrants’ mental health, political science studies of remittances, and economic studies on labour market impacts, for example, often speaking at cross-purposes and not engaging in a meaningful dialogue. To reconcile available evidence and bridge the gap between different disciplines and approaches, in this Special Issue, we put forward the concept of co-agency that underlines the dynamic, relational, co-constructed, and co-performed nature of migration and its impacts. The concept of co-agency draws attention not to what happens to actors involved in migration, but on what they attain, what they perform, ultimately: what they do through migration. Furthermore, co-agency emphasises what actors involved in migration – both those who leave and those who stay behind – do together, rejecting a distinction between migrants as active and those staying behind as simply passive recipients of remittances, development, etc. Focusing on the co-agency of a wide variety of actors – both individual and collective, our conceptual approach emphasises the need to study the interplay between simultaneous impacts of co-agency in migration – including, but not limited to, health impacts on individuals, care-provision impacts on families, and development and policy impacts on states as collective actors. Ultimately, rather than promoting migration-pessimism or migration-optimism, we argue for a nuanced multi-level understanding of the complex interacting impacts of co-agency in migration.

Remittances and economic growth: Evidence from South Africa using ARDL in the presence of structural breaks

The aim of this study is to investigate the relationship between remittances and economic growth in South Africa, using data running from 1970 to 2019. We utilize the ARDL bounds testing approach to explore the relationship between remittances and economic growth, incorporating control variables and addressing structural breaks. Our findings suggest that the structural change in economic growth occurred in 2008 during the global financial crisis, while the break point for remittances emerged in 1997. After taking into consideration the presence of structural breaks, our study found the estimated coefficient for remittances to be statistically significant at the 1% level of significance. The coefficient is negative, indicating that remittances have a negative impact on economic growth. This result is robust to alternative estimators, including the fully modified least squares technique and the impulse response function. Despite employing different estimation methods, the consistent finding of a negative relationship between remittance inflows and economic growth underscores the reliability of our conclusion. Being a recipient of remittances, it is appropriate for a study of this nature to guide policy makers in formulating appropriate policies to benefit from the full impact of remittances, diversify the economy, and reduce reliance on remittance inflows.

Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America

The overall objective of the Sustainable Development Goals is to end poverty in all its manifestations by 2030. To achieve this, international remittance inflows have been identified as crucial external financing, especially for developing countries, to secure the resources needed to improve the living conditions of the poor in these countries. It is on this premise that this study investigates the nexus between remittances and poverty in selected countries in Asia, Africa and Latin America, given that these regions receive the highest amount of remittances globally. The study uses annual data on 38 top recipients of remittances between 1990 and 2021. To ensure the robustness of the results, the study employs two indicators of poverty: household consumption expenditure and poverty headcount. On the methodological front, the study addresses the issue of cross-sectional dependence in a panel study and also corrects for endogeneity, using both static and dynamic methods of analysis, respectively. Empirical findings from the cross-sectional dependence test confirm the interdependence of countries in the study. Interestingly, the study confirms the optimistic view that remittance reduces poverty in the selected countries. This finding is consistent for the two poverty indicators regardless of the methodology adopted. The study concludes that remittance inflows play a pivotal role in alleviating poverty in the selected countries. Based on the findings, governments in the three regions are advised to devise appropriate policies and structures that can support and channel the proceeds from remittances to productive ventures to reduce the incidence of poverty in their respective countries.

Use of remittance and Coronavirus pandemic in Nepal

Remittance based economy of Nepal has been badly affected by the Corona virus pandemic. In this study, we analyze the household and social level use of remittance by the remittance recipient households before and after the pandemic. We adopted cross-sectional study design to collect data from 777 randomly selected respondents residing in Chautara Sngachwokgadhi (Mountain region), Galkot(Hill) and Mithila (Tarai) municipalities in Nepal. We used a reliable questionnaire tool having 0.8 cronbachalpha, and we visited the respondents from 6th June- 18th October 2022. The study found that the remittance recipient households have good access to households, educational, financial and health facilities. A significant amount of remittance also has been used to donate to the youth club, medical treatment seeker, school/college and community level (public moral hazard) after the Coronavirus pandemic. Remittance and agriculture were the major source of family income in each ecological region. However, remittance has failed to increase agriculture production and distributions (domestic household hazard) and also failed to increase entrepreneurship development in the local levels. This study can be a reference for developing evidence-based policies for minimizing public moral hazard and domestic household hazards caused by remittance in developing countries like Nepal.

Socio-Economic Consequences of Remittance on Households in Pokhara Valley

There has been a continuous discussion about the advantages and disadvantages of the continuously increasing remittance flows. On the one hand, few studies in different parts of the world have noted that remittances have increased conspicuous consumption and decreased the Labour supply for farming and agriculture. Instead, several others have shown how enhancing food, health, and education can help recipient households’ quality of life. Thus, this study aims to analyze the socio-economic consequences of remittance on households in Pokhara Valley Through the use of a structured questionnaire, data on how much money families who receive and do not receive remittances spend and invest on a variety of household activities, such as food, children’s health, education, consumer goods, and asset investment, were collected, compared and analyzed using various statistical tools like frequencies, mean, standard deviation and independent samples t-test. The association of the two categories of households of the study on involvement in agriculture and farming was examined using the chi-square test. The study has shown that the remittance income has increased the purchasing power of remittance-receiving households which has led to an increment in the spending capacity of those households. The results indicate that remittance positively affects the improvement of human capital as the remittance recipient households spend more on family members’ education and health services than remittance non-recipient households do. However, remittance has also resulted in conspicuous consumption and higher spending on non-productive activities. In addition, it has adversely affected the participation of recipient families on involvement in agriculture and farming, ultimately necessitating the importation of food grains. On this basis, it is recommended that the government should develop measures that can stimulate remittance recipient families on remittance investments in the development of the domestic economy, national output, and agricultural production rather than spending on unproductive activities.

Nexus Between Remittance and Economic Growth: Case of Top Remittance Recipient Countries

This paper aims to explore the nexus between remittance and economic growth in the top twenty remittance-recipient countries defined in terms of remittances to GDP ratio by using the panel cointegration approach. Panel data from 2009 to 2022 have been used for the Pedroni and Kao Cointegration test and panel ARDL approach to cointegration. Results showed that while there exists a long-run equilibrium relationship among the variables with a very high degree of adjustment in disequilibrium, remittance flows appear to affect economic growth adversely in the long run. Trade openness and gross fixed capital formation positively affected economic growth while inflation reduced growth in the long run. These results imply that the top remittance-recipient countries need to use remittances productively while addressing their structural problems hindering economic growth including high dependence on external sources and imports, low financial access, weak rule of law, and weak quality of institutions.

Examining the Influence of International Migration and Migrant Remittances in Nigeria

Migration is a common phenomenon, often driven by solid motivations, mainly involving long-term relocation. Residents of less affluent countries frequently migrate to more prosperous nations for improved livelihoods. Remittances, the transfer of monetary and societal supplies from the nations that host immigrants to their nations, are recognized as a significant outcome of international migration. Nigeria, a prominent recipient of remittances, serves as the focus of this study. The findings unveil that lack of food, security, safety, joblessness, and no income force global immigration to be the only alternative for most people in Nigeria who are not from well-to-do families. The methodology employed in this study is triangulation, which involves comprehensively examining various data sources to reinforce the validity and reliability of the research findings. The research is rooted in the neo-classical theory, delving into global immigration with a specific impact on remittances from their home country.

Consumption Over Life Cycle Of Remittances Recipients In Indonesia

Purpose of this study is to examine and analyze the consumption patterns of remittance recipient households using the Life Cycle Hypothesis (LCH) model. Using data from three periods of the IFLS (IFLS 2000, IFLS 2007 and IFLS 2014) and the decomposition of cohort and age effects on consumption, the results show that consumption behavior is not as described as in the LCH theory. The curve of average consumption-age in this remittance recipient household has a "hump shape" pattern.

Remittance flows and welfare implications: the Nigerian experience

PurposeIn Africa, recent data show that Nigeria is the second top remittance recipient behind Egypt, but welfare seems deteriorating. Most related reviewed literature is micro-based with surveys, giving credence to the dearth of macro-based literature whose gap this study attempted to fill. Thus, the main purpose of this study is to examine remittance flows and its welfare implications in Nigeria.Design/methodology/approachThe study used quarterly data (1980Q1–2020Q4) from World Development Indicators (2020) and applied the dynamic ordinary least squares (DOLS) model.FindingsRemittance flows were found to be significantly improving the welfare of Nigerians by about 0.04% for a percentage remittance increase. Financial sector development results show that while loans decrease welfare per individual significantly by 0.25% given a 1% increase in the loans accessible by the private sector, a percentage increase in broad money supply in circulation raises welfare per individual significantly by about 0.43%.Practical implicationsSince remittance is found to improve welfare, the study recommends that relevant stakeholders should endeavor to eliminate all form of bottlenecks (payment delays, remitting costs, transfer delays, poor policies and policy inconsistencies) inherent in remitting funds back to Nigeria. The implication of this is that if the impediments are minimized, remittances are bound to rise which will ultimately lead to improved welfare.Originality/valueThe existing literature revealed that there exists very limited or no macro-based study in this context, hence this novelty study.

Effects of remittances on life expectancy and under-five mortality in sub-Saharan Africa: Evidence using Generalized Method of Moments analysis

The study examined the relationship between financial remittances and health outcomes in 45 sub-Saharan African countries (SSA) using data obtained from the World Development Indicator (WDI) over the period 1990 to 2021. Because of the issue of endogeneity, the System Generalized Method of Moments (SGMM) was adopted to analyze the impact of remittances on life expectancy and infant mortality respectively. The results showed that contrary to expectations, remittances did not significantly improve life expectancy and infant mortality rate in SSA. The life expectancy in the previous year, has a statically significant impact on life expectancy at birth for the current year. Also, the lagged value of infant mortality rate significantly increased under five mortality. Therefore, the study recommends that governments in SSA sub-region should evolve policies aimed at guiding recipients of remittances towards effective utilization with a view to improving social welfare and health outcomes.

Funding the Nigerian Agricultural Sector for Improved Performance: The Role of Migrant Workers’ Foreign Remittances Inflows

Although there is a plethora of empirical evidence on the impact of foreign remittances inflows on economic growth in Nigeria, there are few studies that investigated the impact of foreign remittances on agricultural sector performance in the country. This study therefore examined the impact of funding on the performance of the agricultural sector in Nigeria with emphasis on the role of foreign remittances inflows. Specifically, the study investigated the impact of foreign remittances inflows, government expenditure on agriculture, bank credit to agriculture, the Agricultural Credit Guarantee Scheme Fund, and exchange rate on agricultural sector output performance in Nigeria. Exchange rate was used as a control variable. The Johansen co-integration test, Error Correction Mechanism (ECM), and Granger causality test were used to estimate the annual time-series data for the period of 1981 to 2021. The findings from the study revealed that foreign remittances inflows, government expenditure on agriculture, and loans guaranteed under the Agricultural Credit Guarantee Scheme Fund (ACGSE) have significant positive impact on agricultural sector performance. On the other hand, bank credits to agriculture and exchange rate have insignificant negative impact on agricultural sector performance. Among other things, it is recommended that recipients of foreign remittances in Nigeria should be encouraged to invest more in the agricultural sector.

International remittances and political participation in Ghana

The relationship between international remittances and political participation remains unsettled. Studies based on the resource model of participation suggest that remittances are associated with an increase in political participation. In contrast, the insulation model of participation posits that remittances are associated with the likelihood of a decreased political engagement. While most studies have explored this topic using conventional measures of political participation, such as voting, protests, and contacting government officials, we expand the concept of political participation to include media contact. This form of participation has recently gained relevance in both the developed and developing world. Utilizing the 6th and 7th rounds of the Afrobarometer survey and employing matching methods, we explore whether the treatment of receiving remittances stimulates political engagements through contacting the media in Ghana. We find that remittance recipients are more likely to participate in governance by contacting the media, through actions such as calling a radio program or writing a letter to a newspaper to request action from the government. This finding suggests that an adverse exogenous shock to remittances may decrease the likelihood of political activism in households. With recent calls for accountability of governments in developing countries, media engagement of citizens could be an important channel through which citizens hold their governments accountable. As such, our finding has strong policy implications because if remittance engenders media engagement, then it also encourages good governance.

Financial Remittance and Growth in Nigeria: Does Financial Development Matter?

This study explores the complex relationship between financial remittances, financial development, and economic growth in Nigeria by investigating whether financial development serves as a mediator in the effect of remittances on Nigeria's economic performance. Thus, this present study focuses on the interactive effect of financial remittances and financial development on economic growth in Nigeria using secondary data for the periods of 1984 to 2022. The results of the Dynamic Ordinary Least Squares (DOLS) and Fully Modified Ordinary Least Squares (FMOLS) showed that, individually, remittances do not significantly increase economic growth in Nigeria, but when we considered the moderated effect of financial development, remittances become growth-enhancing in Nigeria. The findings reveal a positive and statistically significant interactive effect of remittances and financial development on economic growth, confirming the role of remittances as a source of external finance that stimulates domestic investment and consumption. Furthermore, the study provides compelling evidence supporting the mediating role of financial development in this relationship. A well-developed financial sector, characterized by depth, efficiency, and access, enhances the positive impact of remittances on economic growth. In light of these findings, the study underscores the importance of policies aimed at fostering financial inclusion, promoting financial literacy, and expanding access to formal financial services. These measures empower remittance recipients to make informed and productive financial decisions, thereby maximizing the developmental benefits of remittances. Keywords: Remittances; Growth; Financial Development; Nigeria; DOLS.

Island idleness: Investigating the impact of remittances on labour market participation in Comoros

AbstractThe labour market is fundamental for economic growth, which makes an in‐depth understanding of its dynamics crucial for development and poverty reduction. One determinant of labour market outcomes are remittances. Remittances can influence the decision of an individual whether to participate in the labour market or not, which makes it necessary to understand this relation. In this study we assessed the impact of remittances on the labour supply in the Comoros, the second largest recipient of remittances as a percentage of Gross Domestic Product (GDP) in Africa, by using propensity score matching and national household surveys for 2014 and 2020 to estimate how remittances influenced the decision to participate in the labour market. Most of our results are statistically insignificant; that is, individuals receiving remittances were as likely to participate in the labour market as non‐receivers. Remittances did not influence the unemployment rate and the number of hours worked. On the other side, we found that the type of work was influenced overall by remittances with remittances receivers being more likely to engage in informal work, being more likely to be self‐employed and finally being less likely to engage in wage work. We further find some heterogeneity across the origin and the amount of received remittances. Foreign remittances can explain better the few significant results than domestic remittances and high remittances receivers influenced the labour participation rate, while low and medium remittances receivers explain better the impact of remittances on hours worked, self‐employment and wage work.

Do Remittances Stimulate Economic Growth In Nepal? Evidence From ARDL Approach

ABSTRACT: Remittances from migrant workers are the major sources of financial inflows into the Nepalese economy. The World Bank's data of 2021 suggests that Nepal is one of the top ten recipients of remittances in terms of its share of GDP. Even though remittances make up a significant portion of foreign capital flows, the macroeconomic impact of these transfers on economic growth has not been sufficiently studied. Therefore, the aim of our study is to investigate the impact of remittances on the Nepalese economy for the period 1990 -2021 using the autoregressive distributed lag (ARDL) model. The ARDL approach is applied to identify the long-term and short-term effects of worker remittances on the Nepalese economy. The model uses real GDP as a proxy for economic growth and uses workers' remittances as main explanatory variable along with gross fixed capital formation, trade openness, foreign aid, and human capital as the control variables. The findings of the bound test suggest that there is a long-run relationship between remittances and economic growth. Furthermore, it is also demonstrated that remittances, gross fixed capital formation and foreign aid have a positive effect on real GDP. While we found a negative effect of trade openness and human capital on real GDP in short run and long run dynamics. The positive influence of remittances appears to be very weak, as a significant portion of remittances to Nepal are used for private domestic consumption. Moreover, the negative contribution of imports to economic growth suggests that a larger portion of remittances is spent on daily consumption and consumer durable items such as television, refrigerator, washing machine, air conditioning, and so on. Based on the analysis of the results, Nepal needs to develop an integrated policy to motivate migrants in intensity of saving and investment on multiple productive sectors rather spending on basic consumption. In doing so, such practice helps in channelising the remittances into economic growth through the multiplier effect. The transaction cost of remitting money is another challenging issue in Nepal. Therefore, policy measures must be focused on minimising transaction cost of remittances through the formal and organised channels.