Remittance Recipients Research Articles

Welfare Impact of Remittances in South-West Nigeria: Rural and Urban Households Compared

Migration has been identified as one of the pathways out of the cycle of poverty in developing countries. Nigeria as a developing nation was ranked second after Egypt in Africa and top 10 in the world remittance destination country with estimated official inflows of about US$25.08 billion in 2018. This study provides new evidence on the impact of remittance on household welfare in South-West Nigeria by delving deeper to understand the effect in rural versus urban context. We estimated the impact of remittance on welfare using Propensity Score matching estimation techniques to correct for selection bias that normally arises when remittance–recipient households are not randomly assigned. Average age and household size were 51 and 5 for remittance receiving households, 44 and 4 for non-remittance receiving households, respectively. The impact analysis showed that remittance had a positive impact on household welfare in all cases considered (South west, rural South west and Urban South west) and the estimates were highly sensitive to unobserved characteristics. The estimated average treatment effect on the treated (ATT) on pooled, rural and urban were ₦12411.95 ($34.47), ₦49985.28 ($138.84) and ₦88721.54 ($246.43) respectively for the households. However, the treatment estimates revealed that remittances had higher impact in urban households than the rural households. The application of our model to 552 households' show that the average treatment effects on treated (ATT) showed that remittance had a positive effect on household welfare. Specifically, the urban households received higher value or remittance than the rural but the magnitude of the impact is relatively higher in rural households versus urban households. Although, getting remittances from emigrant does not serve as the sole solution to poverty and national development, our results suggest that receiving remittances significantly improved the welfare of both farming (rural) and non-farming (urban) receiving households than non-receiving households thereby reducing incidence of poverty among the beneficiary. Policies addressing the transaction costs of funds transfer to receiving households in Nigeria and incentives for effective use of the fund among them could be explored as additional tools in improving household welfare in Nigeria.

The distributional impacts of the reduction in remittances in Central America in COVID-19 times

COVID-19 has generated several quarantines and economic lockdowns as the main public policy responses that dramatically affected the dynamic of economic growth and labor markets worldwide. These effects impact remittance inflows to developing countries, in particular those coming from the US, which affect poverty reduction paths in Latin America. Using data from the US labor market and economic performance indicators of the US and remittance recipient countries, this paper estimates the distributional impacts of the change in remittances post-COVID-19 for the region that most rely on remittances, Central America. Results suggest that after COVID-19, remittance inflows are expected to decrease 14 % in the region during 2020 and that effects are heterogeneous among countries: El Salvador and Nicaragua are expected to be the most affected countries while Panama is expected to be the least affected one. The model allows to estimate impacts in other countries in Latin America and the Caribbean. However, due to the lack of household survey availability, this paper only explores the distributional impacts of the change in remittance inflows in Central America. The expected impacts on poverty are also heterogeneous. While poverty in El Salvador is expected to increase by 6 % due to the change in remittances, poverty in Guatemala is expected to increase by 1 %. Results are robust to different specifications.

Масштабы влияния пандемии на экономику стран – нетто-получателей денежных переводов

The advent of the new coronavirus hinders the fragile welfare of migrant workers. Those economic sectors with a large migrant workforce appear to be those hit hardest during the lockdown, resulting in surge in migrant unemployment and a plunge in the volume of remittances. This has become yet another factor putting pressure on the gross domestic product (GDP) growth, balance of payments, and budgets of countries that are net remittance recipients, while also triggering rising poverty levels. This paper evaluates the impact of the current pandemic (and respective economic downturn) on remittance inflows to recipient countries and tackles the potential contribution that international financial institutions could make to alleviate the adverse economic aftermath. In Central Asia and Southern Caucuses (except Azerbaijan) emergency financing granted by the International Monetary Fund (IMF) and the World Bank covers 9–20% of the overall size of the annual remittances received. This financial support could be rendered insufficient due to the sharp decrease in the volume of remittances, decline in tourism revenue, and weakening economic activity, while the poor quality of state institutions may hinder the efficient distribution of accumulated resources. In Europe, the IMF and the World Bank provided approximately $7.7 billion in financing to low- and middle-income countries for such purposes as economic stabilization, support for population welfare, and financing of internal/external deficit, of which $5 billion is represented by the new Ukraine-IMF Stand-By Agreement. With the exception of Ukraine, Macedonia, and Bulgaria (the latter having received no loans/grants so far), the cover index for European remittance-recipients stands within a range of 2–18% over 2019 remittance inflows.Therefore, it is most feasible that the current 2020 GDP growth forecasts made by the IMF, the World Bank, and local governments are inaccurate in the light of the insufficient financial support provided by international financial organizations. Additional pressure on the GDP figures might stem from further extension and/or toughening of the lockdown period, as well as from uncertainty regarding the revival of regular business activity and the timeline for resuming migrant remittances.

Workers’ remittances and financial development: the case of South Asia

South Asia is one of the top remittance recipient regions in the world. Remittances constitute a significant portion of GDP and have helped South Asian countries to minimize a shortage of foreign reserves. Remittances have been an important source of income for many families in the region too. Despite the significant role of remittances at the local as well as national level, the impact of remittances on financial development has not been adequately studied in the case of South Asia. This paper utilizes a panel cointegration approach to examine the impact of worker remittances on financial sector development in the top remittance recipient countries in South Asia. We find evidence of a long-run relationship between remittances and financial development. Our test results show support for a positive and significant impact of remittances on financial development. The Pooled Mean Group tests suggest that a 1% point increase in remittances increases the credit to the private sector by greater than 1% points. The positive and significant impact of remittances on financial development is robust. The results support the existence of bidirectional causality between remittances and financial development in the long run.

Do remittances condition the relationship between trade and government consumption?

ABSTRACT This paper used a panel model and 99 developing economies over the 1980–2018 period to investigate the effect that remittances had on the relationship between trade and government consumption. We showed that remittances mediate the relationship between trade and government consumption. We documented that in high remittance recipient countries, trade negatively affected government consumption. In low remittance recipient countries, by contrast, we found that trade positively affected government consumption. Our results suggested that remittances can reduce the fiscal cost on government budget associated with adverse trade shocks. We proposed two policy responses for remittance recipient countries.

The Impact of Inward Remittances on Economic Growth in Ghana

Ghana was the second largest recipient of remittances in West Africa after Nigeria in 2018, with an underlying economic growth rate which declined from 8.1 percent in 2017 to 5.6 percent in 2018 anchored on industrial-sector growth. The study re-examined the effect of inward remittances on economic growth in Ghana. The ARDL estimation technique is used to test for the relationship between remittances and economic growth, using annual data from 1970 to 2016. The traditional Granger causality test was also applied to explore the direction of causality between remittances and economic growth. The results revealed that remittances had a negative long-run effect on growth and a positive effect on economic growth in the short-run. The study found no granger causality between economic growth and remittances in Ghana for the period of the study. FDI, which appears to have a relatively stronger appeal to support economic growth in Ghana, must be focused on. Sound economic and political institutions will be needed to ensure that the economy benefits fully from inward remittances by directing them from consumption to savings avenues and investment opportunities.

The Microeconomic Impact of Migrants’ Remittances on Household Welfare

This research study investigated that how foreign remittances contributed to household welfare at the micro-level. The results revealed that remittances contributed progressively to household food consumption and wealth status. Remittances recipient families have good wealth status as compared to non-recipient ones. It has been found that migrants’ families are having good wealth status and own more assets. Additionally, a significant portion of remittances is used for food expenditures. The remittance recipient households are spending more on food and more food security as compared to others. Thus it is concluded that that foreign remittances have a positive relationship with household welfare.

Migrant Remittances and Demand for Redistribution

The literature on the political economy of remittances largely agrees that as households receive income from migrants abroad they will be less dependent on government goods and patronage. The underlying assumption is that remittance inflows are stable and increasing. The global economic recession of 2008 and 2009 led to major declines in remittance inflows. This paper asks two different but related questions: (1) Do remittance recipients support redistribution? and (2) Do preferences for redistribution change following a negative shock to remittances? Using three waves of survey data, I find that remittance recipients diverge from non-recipients in favoring redistribution following the sudden decline in remittances. I test for possible mechanisms such as dependence on remittances and relative income levels to explain this change in preferences. I find that remittance recipients who are more dependent on remittances or not inclined to emigrate are more likely to favor redistribution following the negative shock.

Utilization of Remittance in Bangladesh by Migrant Families: A Micro-level Inquiry in Five Selected Upazilas

Remittance has become a significant contributor to the Bangladesh economy. As migrant workers from Bangladesh gradually increased over the years, the amount of annual remittance to the country rose significantly. According to the World Bank, Bangladesh now stands as one of the largest recipients of remittances. The country received almost $15 billion as of June 2019 in the 2018-2019 financial year. There is a definite correlation between macro-economic policies and the flow of remittance. But both flows of remittances and their uses in Bangladesh have not been guided by any notable policy framework. Hence to maximize the flow of remittance and reap benefits from it at the domestic front, it is imperative to have a concerted policy effort. However, limited empirical works had been done about the actual productive purposes of remittance at the domestic level. This paper tries to understand the level of productive uses of remittances at the domestic level and also to find out barriers to productive uses of it. Keywords: Remittance, remittance flow, uses of remittance, barriers of productive uses, economic development, Bangladesh

Coronavirus Disease 2019 in 5 Neighboring Limited-Resource Countries: A Financial and Health Threat

Coronavirus Disease 2019 in 5 Neighboring Limited-Resource Countries: A Financial and Health Threat

Remittances and morality: family obligations, development, and the ethical demands of migration

ABSTRACT Remittances have moral dimensions that, albeit implicitly addressed in migration literature, have not yet been the focus of explicit attention and analysis by social scientists. Building on recent developments in the anthropology of ethics and morality, this article proposes theoretical and analytical pathways to address this important but often neglected aspect of remittances. It does so mainly via a critical analysis of existing scholarship on remittances, and ethnographic data drawn from research among Cuban migrants in Cuba and Spain. The reflexive scrutiny of scholars’ moral assumptions about remittances opens the way for the study of the moral dilemmas and ethical demands articulated by remittance senders and recipients. Family roles and obligations, and the uses of the money sent by migrants, are identified as key areas of moral difficulty. Their analysis shows how remittances inform moral reassessments of family relations, individual responsibility, economic practice, and development. The notion of ‘moral remittances’ is proposed as a heuristic comparative tool that serves to illuminate the moral aspects of remittances. This notion is put into perspective to complement and reconsider more metaphorical takes on remittances, notably the concept of ‘social remittances’, of which it helps reveal some epistemological limitations while opening future research avenues.

Remittance inflows and financial development: evidence from the top recipient countries in Sub-Saharan Africa

ABSTRACT This paper utilizes a panel cointegration approach to investigate the relationship between remittances and financial development in the top remittance recipient countries in Sub-Saharan Africa. Our results point to a significant and positive long-run relationship. More specifically, the pooled-mean group estimates indicate that a one-percentage point increase in remittance inflows promotes financial development by more than one percentage point. In addition, the results support the existence of bidirectional causality between remittances and financial development in the long-run. We also find some evidence that remittance pricing has a negative impact on the long-run relationship between remittances and financial development. While the results suggest that remittance inflows promote financial development, migrant workers may be timing the foreign exchange market to remit.

Living arrangements and food security of a sample of older Palestinian refugees in Lebanon

Background Although we know of the relationship between food insecurity, poor dietary intake and health outcomes, there are limited studies examining the determinants of food insecurity in older adults in developing countries. This study describes the living arrangement and characteristics of protracted Palestinian refugees in Lebanon aged 60 years and older and, the status and determinants of household food insecurity. Methods Two surveys, representative of Palestinian refugees in Lebanon (2010 and 2015), were appended and used to examine living arrangement of older adults and household food security. Our final pooled sample included 5412 households and 24,540 individuals. Of these individuals, 10.85% (n=2663) were adults aged 60 years and older, our population of interest. Living arrangement included 1) households with no older adults, 2) multigenerational households that included at least one older adult, 3) older adults living alone, with spouse or with another older person (single households). Food security was collected using two similar questionnaires that were equated and scores were used to classify households into food secure, moderately and severely food insecure. Means and proportions were used to examine household characteristics and sociodemographic and health variables of older adults by living arrangements. Logistic regression tested determinants of food insecurity. Results About 27% of older adults lived in single households and of those living alone, 94.3% were women. Overall, poverty was highly prevalent in households (57%) and only 38% of households were food secure. However, poverty and food insecurity were significantly less prevalent in single households (P<0.0001) and these were also the highest recipients of welfare and remittances. Conclusions Successful interventions to address poverty and food insecurity will require a better understanding of family structure, interactions within the household, and the role that older adults play within the family.

The Impact of Remittance on Consumption and Investment: A Case of Province Five of Nepal

Background: Remittance remains a key source of external resource flows for developing countries. Remittance inflows are the addition of migrant remittance inflow and compensation of employees which include current transfers by migrant workers, with wages and salaries earned by non-resident workers. Remittance is an essential aspect of leveraging remittance to promote economic development. In the context of Nepal, remittance recipient households tend to spend more on consumption, health and education as compared to remittance non-receiving households.
 Objective: This study examines the impact of remittances on the consumption and investment in the context of province five of Nepal.
 Methods: This study is based on primary sources of data with 570 observations. The primary survey was used to extract the information from the respondents regarding the remittance amount, consumption and investment of individual household from the families of Rupandehi, Dang and Rolpa districts of Nepal whose family member has been working out of country. The regression models are estimated to test the significance and impact of remittances on the investment and consumption. Consumption and investment are the dependent variables. The independent variables are remittance, annual domestic income, household size, family residential area and level of education.
 Results: The results show that there is a positive relationship between remittances and consumption. This indicates that higher the amount of money inflow as a remittance, higher would be the consumption. Similarly, there is positive relationship domestic income and consumption which indicates that higher the level of domestic income, higher would be the consumption. Likewise, there is a positive relationship between household size and consumption. It indicates that larger the members in a family, higher would be the consumption. The result also reveals that there is a positive relationship between level of education and consumption. It indicates that higher the level of education, higher would be the consumption.
 Conclusion: Remittance has been leading to the consumption and investment behavior of rural household in province five. Remittance followed by family size is the most influencing factors that explain the changes in consumption and investment of families in province five of Nepal.
 Implication: This study can be useful to concerned authorities for further planning of proper investment of remittance.

Internal remittances and employment choices in rural Ghana

PurposeThe paper examines the effect of internal remittances on the employment choices of household heads in rural Ghana.Design/methodology/approachThe paper employs data from the Ghana Living Standards Survey (GLSS 6) of the Ghana Statistical Service. Due to issues of endogeneity of remittances in relation to labor supply, the paper adopts an instrumental variable approach in the analysis. First, employment choices are categorized into three: (1) wage/salary employment, (2) self-employment and (3) domestic/family employment. The relationship is then modeled as instrumental variable multinomial probit (IV-MNP). Secondly, employment choices are recategorized into two: farm employment and otherwise and modeled as instrumental variable probit (IV-PROBIT). The models are estimated via the conditional mixed process (CMP) estimation technique.FindingsThe results indicate that remittances have a negative effect on self-employment and a positive effect on domestic/family employment. Thus, remittances reduce participation in self-employment but increase participation in domestic/family employment. Furthermore, remittances have a negative effect on participation in farm employment. The results are robust to different measures of remittances: receipt of remittances (dummy) and remittance income.Practical implicationsThe results suggest that remittances are used for consumption rather than investing in earning activities. In general, engaging in earning type of employment, whether farm and nonfarm employment will decline with receipt of remittances in rural Ghana. There is a need for policy attention with the increasing migration of people out of rural areas.Originality/valuePrior to this study, little was known on the effect of internal remittances on labor supply decisions of remittance recipients in Ghana, particularly rural Ghana. This paper contributes significantly to filling this knowledge gap.

Domestic and International Remittances and Food Security in Sub-Saharan Africa

The amount of remittances to developing counties, defined as the flow of monetary and non-monetary goods, has increased globally and has surpassed the amount of money spent on foreign aid in these developing countries. The impact of remittances on households’ purchasing power has been studied; however, its link to food security status is yet to be explored. This paper quantitatively analyses the relationship between food security status (measured using the Food Insecurity Experience Scale) and the receipt of domestic/ international or both remittances on households in sub- Saharan Africa. Data are derived from the Gallup World Poll from the years 2014-2017. Multinomial logistic regression models and binary logistic regression analyses were conducted to analyze the data. Results showed that remittance recipients had significantly higher household incomes (especially if the remittance was coming internationally and domestically), lived with significantly more household members (7 or more members), and were more likely to be separated (including divorced or widowed). Households that received domestic remittances had significantly higher odds of being food insecure than households receiving no remittances. Conversely, households receiving remittances internationally or a combination of domestic and international remittances had significantly lower odds of food insecurity compared to non-receivers. This study found that receiving remittances affect the food security status of people living in SSA countries.

Influence of Remittances on Socio-Economic Development in Rural Nepal

This article analyses socioeconomic changes with reference to income, consumption, expenditure, health, and education of migrant households in relation to remittances flows. This study is based on a case study of Musaharniya village in Rajbiraj Municipality of Saptari District, Province 2, Nepal. It is found that remittances play a vital role in improving the socioeconomic condition, reducing poverty and bringing social and political awareness in the village. Those households whose family members are not abroad are poorer than those with migrant members abroad. Due to increasing incomes, their expenditure capacity has considerably risen over time. All migrant households have owned land whereas one-third of households were landless in the past. Access to modern technologies has significantly increased among remittance recipient households compared to non-remittances households. Remittances were also causing migration from rural to urban centres to some extent.

Remittances, Corruption, and Human Development in Latin America

International private transfers from immigrant workers to families and friends have surged in Latin America. These transfers, also known as remittances, grew from a mere US$5 billion in 1990 to US$74.3 billion in 2016, supplementing the income of millions of families in the region. Particularly, remittances can contribute to human development by lifting large populations out of extreme poverty and by enabling better housing, education, and health. However, corruption and weak institutional environments can severely reduce the effectiveness of remittances on the path of development. For instance, remittance recipient households could be discouraged to use these foreign funds to acquire assets due to the cumbersome and corrupt process to legalize property. Using a panel of 26 Latin American and the Caribbean countries over the period of 1985–2016, this study investigates the effects of remittances and corruption on five development indicators. We find that remittances do significantly affect human capital indicators, and more so among countries fighting corruption.

Factors Influencing Food Insecurity in Nepal

Nepal has been persistently encountering food insecurity and under-nutrition. It is therefore utmost important to determine the factors responsible for influencing food insecurity in Nepal. This study examines the factors determining food insecurity in Nepal applying binary logistic models for food poverty, household with inadequate food consumption and poor dietary diversity using data from Nepal Living Standard Survey 2010/11. Food security was determined to be strongly associated with education level and age of household head, household with higher female education level, larger farm size with higher ratio of irrigated land, better access to markets, roads and cooperatives, better household assets and remittance recipient households. Food insecure is relatively more prevalent in rural areas with higher dependent on rain-fed agriculture, higher dependency ratio and larger family size. Improving both physical and economic access to foods, together with investment in education and agriculture could help to reduce food insecurity and hunger from Nepal.

Welfare beyond Borders: Filipino Transnational Families’ Informal Social Protection Strategies

Remittances and caregiving arrangements are among the most significant practices of informal social protection against social risks and exclusion among transnational families. This article argues that remittances can provide social protection in cases where formal welfare services do not reach the citizens properly. Furthermore, it illustrates how members of Filipino transnational families can create sustainable informal social protection and utilise it long-term. The transnational practices are analysed to show how migrant capital, particularly the intersection of economic and social capital (Bourdieu, 1986), is transferred to informal social protection through meaningful reciprocity between the senders and recipients of remittances. Successful allocation of remittances and negotiation of care arrangements depend on the realisation of reciprocity and its social context, such as life circumstances, moral obligations and migrants’ personal goals for migration. The data draw on observations and 41 qualitative interviews conducted both in Finland and in the Philippines.