The impact of remittances on poverty and inequality in Ghana

This paper uses a new, 2005/06 nationally-representative household survey to analyze the impact of internal remittances (from Ghana) and international remittances (from African and other countries) on poverty and inequality in Ghana. To control for selection and endogeneity, it uses a two-stage multinomial logit model with instrumental variables focusing on variations in migration networks and remittances among various ethno-religious groups in Ghana. The paper finds that both internal and international remittances reduce the level, depth, and severity of poverty in Ghana. However, the size of the poverty reduction depends on the type of remittances received. In general, poverty in Ghana is reduced more by international than internal remittances. For households receiving international remittances, the level of poverty falls by 88.1 percent with the inclusion of remittances; for households receiving internal remittances, poverty falls by 69.4 percent with the inclusion of remittances. The paper also finds that both types of remittances increase income inequality in Ghana. For households with internal remittances, the inclusion of remittances causes the Gini coefficient to rise by 4 percent, and for households with international remittances, the inclusion of remittances causes the Gini to increase by 17.4 percent.Population Policies,Access to Finance,Remittances,Debt Markets,Rural Poverty Reduction

The Remittances Framework in Lesotho: Assessment of Policies and Programmes Promoting the Multiplier Effect

This study explored policies and programmes aimed at facilitating remittances inflows through formal channels and leveraging remittances for development in Lesotho. The study also looked into regulations and laws on remittances. In order to answer key questions of this study, semi‐structured questionnaires were administered to 29 institutions, including commercial banks, an asset manager, insurance companies, telecommunication companies, government ministries, parastatals, a research institution, a retailer, a savings and credit cooperative and non-governmental organizations. The gaps revealed by this study can be summarised as: the Deferred Pay Act is the only policy driving officially recorded remittance inflows to Lesotho and which facilitated the creation of remittances‐linked savings product by the banking sector; there are restrictions on remittance outflows for immigrants working in the country, though planned to be eliminated; most of remittances transfer products offered by various institutions suit regular income earners with bank accounts, the adoption of mobile‐phone based transfers adoption is low and the mobile‐phone based transfer products cannot be used to make international transfers; there is lack of adoption of remittances‐linked financial products by financial intermediaries and relevant government ministries; the benefits packaged with the remittances‐ linked savings accounts are less attractive; and most of the remittances services providers are concentrated in urban centres. These findings show there is a need to develop policies and programmes for harnessing remittances for development. This study concluded by suggesting policy options for facilitating remittances inflows through regular channels and promoting positive impact of remittances on development

Remittances and Household Consumption Instability in Developing Countries

This paper analyzes the impact of remittances on household consumption instability in developing countries on a large panel of developing countries. The four main results are the following: Firstly, remittances significantly reduce household consumption instability. Secondly, the insurance role played by remittances is highlighted: remittances dampen the effect of various sources of consumption instability in developing countries (natural disasters, agricultural shocks, discretionary fiscal policy). Thirdly, the insurance role played by remittances is more important in less financially developed countries. Fourthly, the overall stabilizing effect of remittances is mitigated when remittances over GDP exceed 8.5%.Remittances;consumption instability;Financial Development;shocks;threshold effects

Socio-economic consequences and prospective opportunities of the international labour migration as a process of the global labour market development

Purpose: The aim is to study the causes, processes and economic consequences of remittances carried out during international labour migrations in the global labour market. Design/Methodology/Approach: The comprehensive analysis of remittances of migrants based on official data of the World Bank is carried out in this article. The systematic approach and logical research methods were used. The paper analyzes data on the remittances dynamics in the XXI century, shows the largest countries of senders and recipients of migrant workers remittances. Authors studied corridors of cash flows, the cost of transfers depending on the region of departure and the main transfer organizations. Findings: Remittances from migrant workers is the significant amount of aid, especially for low-and middle-income countries, and it is the largest source of external financing for them. The economies of the number of countries are highly dependent on these transfers. According to experts, remittances of migrants are many times higher than the volume of the official development assistance to these countries, as well as remittances of migrants surpass the volume of the foreign direct investment. And according to forecasts, the volume of remittances will only grow. Practical implications: The practical significance of the study is to substantiate and highlight the most important methodological and theoretical economic consequences of remittances of international migration flows. Originality/value: The theoretical and applied value of the study is to substantiate the prospect area with better mechanisms for the implementation, accounting and stimulation of remittances by international labour migrants.peer-reviewe

Worker Remittances and Capital Flows to Developing Countries

Worker remittances constitute an increasingly important mechanism for the transfer of resources from developed to developing countries, and remittances are the second-largest source, behind foreign direct investment, of external funding for developing countries. Yet, literature on worker remittances has so far focused mainly on the impact of remittances on income distribution within countries, on the determinants of remittances at a micro-level, or on the effects of migration and remittances for specific countries or regions. The focus of this paper is thus on four questions: First, how important are worker remittances to developing countries in quantitative terms? Second, what are the determinants driving worker remittances? Third, how volatile are worker remittances to developing countries? Fourth, are remittances correlated to other capital flows? --remittances,capital flows,developing countries

Identifying the Motives of Migrant Philanthropy

Donations by migrants to community projects in their home countries ("collective remittances") help to provide local public goods and may promote economic development. We draw on the literatures on migrant remittances and on philanthropy in general to identify possible motives for collective remittances

Impacts of International and Internal Remittances on Household Welfare: Evidence from Viet Nam

This paper measures the impact of international and internal remittances on household welfare of remittances-receiving households using data from Viet Nam Household Living Standard Surveys 2002 and 2004. It is found that the receiving of international and internal remittances increased both income and consumption expenditures of the recipients. The impact of remittances on non-food expenditures tended to be higher than the impact on food expenditures. For international remittances, the impact on income was much higher than the impact on consumption expenditures. It means that a large proportion of international remittances were used for saving and investment. For the receipt of internal remittances, the impact on income was just slightly larger than the impact on consumption expenditures. In other words, most of the internal remittances were used for consumption expenditures.International remittances, internal remittances, household welfare, income, expenditures, Viet Nam

International Remittances, Domestic Remittances, and Income Inequality in the Dominican Republic

Inequality decomposition techniques are used to analyze the different impacts of domestic and international remittances on household income inequality in the Dominican Republic. Domestic remittances seem more likely to be equalizing than international remittances. The negative marginal effect on inequality of domestic remittances is more prominent among rural households, and in particular among landless rural households, while the negative marginal effect on inequality of international remittances is more prominent among urban households, and in particular outside of the Santo Domingo area. Stronger marginal effects of remittances were found among female-headed households, the elderly and the less educated. Both domestic and international remittances are higher among female-headed households and the elderly. Education is associated with lower domestic remittances and higher international remittances, probably reflecting the role of education in promoting international versus domestic migration. An increase in schooling increases inequality through domestic remittances and decreases inequality through international remittances, while a reduction in household size reduces inequality through both domestic and international remittances. This analysis highlights the importance of the distinction between domestic and international remittances as drivers of inequality as well as the importance of identifying and quantifying the determinants of remittances and their subsequent impact on inequality.Demand and Price Analysis, International Development, Public Economics,

The Impact of Remittances on Education Attainment: Evidence From Dominican Republic

This paper will examine the relationship between remittances and education attainment focusing on Dominican Republic in 2002. This study will focus on households in Dominican Republic using surveys from IPUMS international and the data is cross-sectional. Sending remittances increases the income for households, which in return, influences the spending on education. The study of remittances is analyzed in a more cultural and social value rather than entirely economic. The dynamic and structure of a family is crucial when studying the effects of remittances in a developing country. Key findings from this analysis is that the relationship between education attainment and remittances are positively related and it is statistically significant according to this model. This study examines the family structure as well as the economic and social structure of Dominican Republic to understand the relationship between remittances and education attainment

Remittances and Household Consumption Instability in Developing Countries

This paper analyzes the impact of remittances on household consumption instability in developing countries on a large panel of developing countries. The four main results are the following: Firstly, remittances significantly reduce household consumption instability. Secondly, the insurance role played by remittances is highlighted: remittances dampen the effect of various sources of consumption instability in developing countries (natural disasters, agricultural shocks, discretionary fiscal policy). Thirdly, the insurance role played by remittances is more important in less financially developed countries. Fourthly, the overall stabilizing effect of remittances is mitigated when remittances over GDP exceed 8.5%.Remittances, consumption instability, Financial Development, shocks, threshold effects