Menu Expand

“Being Poor Because of No Money”: Examining the Impact of International Remittance Inflows on Reducing Poverty

  1. Journals
  2. Economics, Finance, Business & Management
  3. Applied Economics Quarterly
  4. Vol. 68, Issue 4
  5. pp. 291–310

JOURNAL ARTICLE

Cite JOURNAL ARTICLE

Style
Khan, I. “Being Poor Because of No Money”: Examining the Impact of International Remittance Inflows on Reducing Poverty. Applied Economics Quarterly, 68(4), 291-310. https://doi.org/10.3790/aeq.2022.1445803
Khan, Imran "“Being Poor Because of No Money”: Examining the Impact of International Remittance Inflows on Reducing Poverty" Applied Economics Quarterly 68.4, 2022, 291-310. https://doi.org/10.3790/aeq.2022.1445803
Khan, Imran (2022): “Being Poor Because of No Money”: Examining the Impact of International Remittance Inflows on Reducing Poverty, in: Applied Economics Quarterly, vol. 68, iss. 4, 291-310, [online] https://doi.org/10.3790/aeq.2022.1445803
Format
Download

“Being Poor Because of No Money”: Examining the Impact of International Remittance Inflows on Reducing Poverty

Khan, Imran

Applied Economics Quarterly, Vol. 68 (2022), Iss. 4 : pp. 291–310

Preview Login to order (PDF)

Additional Information

Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/aeq.2022.1445803
Language
German
Pages
20
Keywords

Pricing

Individual
€ 24.00 (incl. local VAT if applicable)

Author Details

Birla Institute of Technology and Science, Dubai Campus, Academic City, Dubai, United Arab Emirates.

References

  1. Abduvaliev, M./Bustillo, R. (2019): “Impact of remittances on economic growth and poverty reduction amongst CIS countries,” Post-Communist Economies 32(4), 525–546, https://doi.org/10.1080/14631377.2019.1678094.  Google Scholar
  2. Acheampong, A. O./Appiah-Otoo, I./Dzator, J./Agyemang, K. K. (2021): “Remittances, financial development and poverty reduction in Sub-Saharan Africa: Implications for post-COVID-19 macroeconomic policies,” Journal of Policy Modeling 43(6), 1365–1387, https://doi.org/10.1016/J.JPOLMOD.2021.09.005.  Google Scholar
  3. Adams, R. H./Cuecuecha, A. (2013): “The Impact of Remittances on Investment and Poverty in Ghana,” World Development 50, 24–40, https://doi.org/10.1016/J.WORLDDEV.2013.04.009.  Google Scholar
  4. Adams, R. H./Page, J. (2005): “Do international migration and remittances reduce poverty in developing countries?” World Development 33(10), 1645–1669, https://doi.org/10.1016/J.WORLDDEV.2005.05.004.  Google Scholar
  5. Akobeng, E. (2021): “Harnessing remittances for the poor: the role of institutions,” Journal of Economic Policy Reform 26(2), 160–176, DOI: 10.1080/17487870.2021.1976178.  Google Scholar
  6. Anyanwu, J. C./Erhijakpor, A. E. O. (2010): “Do International Remittances Affect Poverty in Africa?” African Development Review 22(1), 51–91, https://doi.org/10.1111/J.1467-8268.2009.00228.X.  Google Scholar
  7. Arapi-Gjini, A./Möllers, J./Herzfeld, T. (2020): “Measuring Dynamic Effects of Remittances on Poverty and Inequality with Evidence from Kosovo,” Eastern European Economics 58(4), 283–308, https://doi.org/10.1080/00128775.2020.1720517.  Google Scholar
  8. Aslam, A. L. M. (2017): “Does consumption expenditure induce the economic growth? An empirical evidence from Sri Lanka,” World Scientific News 81(2), 216–229.  Google Scholar
  9. Azizi, S. S. (2021): “The impacts of workers’ remittances on poverty and inequality in developing countries,” Empirical Economics 60(2), 969–991, https://doi.org/10.1007/S00181-019-01764-8/TABLES/8.  Google Scholar
  10. Baloch, M. A./Danish/Khan, S. U. D./Ulucak, Z. Ş./Ahmad, A. (2020): “Analyzing the relationship between poverty, income inequality, and CO2 emission in Sub-Saharan African countries,” Science of the Total Environment 740, 139867.  Google Scholar
  11. Bang, J. T./Mitra, A./Wunnava, P. v. (2020): “Hollowing out the middle? Remittances, poverty, and income inequality in Nigeria,” Migration and Development 11(3), 543–559, https://doi.org/10.1080/21632324.2020.1806599.  Google Scholar
  12. Barkat, K./Alsamara, M./Mimouni, K. (2023): “Can remittances alleviate energy poverty in developing countries? New evidence from panel data,” Energy Economics 119, 106527, https://doi.org/10.1016/J.ENECO.2023.106527.  Google Scholar
  13. Chea, V. (2021): “Effects of remittances on household poverty and inequality in Cambodia,” Journal of the Asia Pacific Economy 28(2), 502–526, https://doi.org/10.1080/13547860.2021.1905200.  Google Scholar
  14. Cuecuecha, A./Tlaxcala, A. C. E. C. de/Jr./R. H. A. (2016): “Remittances, Household Investment and Poverty in Indonesia,” Journal of Finance & Economics 4(3), 12–31, https://doi.org/10.12735/JFE.V4N3P12.  Google Scholar
  15. Cui, X./Umair, M./Gayratovich, G. I./Dilanchiev, A. (2023): “Do Remittances Mitigate Poverty? Empirical Evidence From 15 Selected Asian Economies,” The Singapore Economic Review 68(04), 1447–1468, https://doi.org/10.1142/S0217590823440034.  Google Scholar
  16. Dada, J. T./Akinlo, T. (2021): “Foreign direct investment and poverty reduction in sub-Saharan Africa: does environmental degradation matter?” Future Business Journal 7(1), 1–10, https://doi.org/10.1186/S43093-021-00068-7.  Google Scholar
  17. Dey, S. (2014): “Impact of remittances on poverty at origin: a study on rural households in India using Covariate Balancing Propensity Score Matching,” Migration and Development 4(2), 185–199, https://doi.org/10.1080/21632324.2014.979022.  Google Scholar
  18. Djeunankan, R./Njangang, H./Tadadjeu, S./Kamguia, B. (2023): “Remittances and energy poverty: Fresh evidence from developing countries,” Utilities Policy 81, 101516, https://doi.org/10.1016/J.JUP.2023.101516.  Google Scholar
  19. Faiza, H. N./Mohd, N. M. A. (2017): “Effects of Remittances on Poverty Reduction: The Case Of Indonesia,” Journal of Indonesian Economy and Business 32(3), 163–177, https://doi.org/10.22146/jieb.28678.  Google Scholar
  20. Farhani, R./Aloui, A./Mohsin, K. (2023): “Asymmetric effect of real exchange rate changes on poverty: The role of remittances and the informal sector,” Cogent Social Sciences 9(1), https://doi.org/10.1080/23311886.2023.2198782.  Google Scholar
  21. Francois, J. N./Ahmad, N./Keinsley, A./Nti-Addae, A. (2022, April 16): “Remittances Increase GDP with Potential Differential Impacts Across Countries,” World Bank Blogs. https://blogs.worldbank.org/peoplemove/remittances-increase-gdp-potential-differential-impacts-across-countries.  Google Scholar
  22. Gaaliche, M./Zayati, M. (2014): “The causal relationship between remittances and poverty reduction in developing country: using a non-stationary dynamic panel data,” Atlantic Review of Economics (1).  Google Scholar
  23. Gujarati, D. N. (2003): Basic Econometrics, Fourth Edition.  Google Scholar
  24. Gurbanov, S./Mammadrzayev, V./Isgandar, H. (2021): “Remittances, Poverty Reduction, and Inclusive Growth in the Resource-Poor Former Soviet Union Countries,” Economics, Law, and Institutions in Asia Pacific, 123–148, https://doi.org/10.1007/978-981-16-1107-0_6/FIGURES/3.  Google Scholar
  25. Handriyani, R./Sahyar, M. M./Arwansyah, M. (2018): “Analysis the Effect of Household Consumption Expenditure, Investment and Labor to Economic Growth: A Case in Province of North Sumatra,” Studia Universitatis “Vasile Goldis” Ara – Economics Series 28(4), 45–54, https://doi.org/10.2478/SUES-2018-0019.  Google Scholar
  26. Harris, R./Sollis, R. (2003): Applied Time Series Modelling and Forecasting, Wiley.  Google Scholar
  27. Hosan, S./Rahman, M. M./Karmaker, S. C./Chapman, A. J./Saha, B. B. (2023): “Remittances and multidimensional energy poverty: Evidence from a household survey in Bangladesh,” Energy 262, 125326, https://doi.org/10.1016/J.ENERGY.2022.125326.  Google Scholar
  28. Huay, C. S./Bani, Y. (2018): “Remittances, poverty and human capital: evidence from developing countries,” International Journal of Social Economics 45(8), 1227–1235, https://doi.org/10.1108/IJSE-10-2017-0454/FULL/XML.  Google Scholar
  29. Khan, I. (2022): “South Asia’s sustained financial development and the role of remittance: An empirical analysis,” Research Square, https://doi.org/10.21203/rs.3.rs-1715873/v1.  Google Scholar
  30. Khan, I. (2023): “Analyzing the impact of positive and negative remittance inflow shocks on economic growth of India,” Journal of Economic Studies, https://doi.org/10.1108/JES-02-2023-0089.  Google Scholar
  31. Khan, I./Akhtar, M. A. (2021): “Do Demographic Characteristics Affect Remittance Behavior? An Analysis of Migrants in the UAE,” Contemporary Review of the Middle East 8(4), https://doi.org/10.1177/23477989211032474.  Google Scholar
  32. Khan, I./Akhtar, M. A. (2022): “Are the remittance receipts of the South-Asian region resilient to the Covid-19 crisis? A peek into the future through the past,” Journal of Sustainable Finance and Investment, https://doi.org/10.1080/20430795.2022.2060175.  Google Scholar
  33. Khan, I./Gunwant, D. F. (2023a): “An impact analysis of macroeconomic factors on South Asia’s renewable energy output,” International Journal of Energy Sector Management, https://doi.org/10.1108/IJESM-01-2023-0013.  Google Scholar
  34. Khan, I./Gunwant, D. F. (2023b): “Is the remittance inflow to the Turkish economy resilient? A glimpse of the future through the lens of the past,” Review of Applied Socio-Economic Research 25(1), https://doi.org/10.54609/reaser.v25i1.203.  Google Scholar
  35. Kumar, B. (2019): “The Impact of International Remittances on Poverty Alleviation in Bangladesh,” Remittances Review 4(1), 67–86, https://www.ceeol.com/search/article-detail?id=841090.  Google Scholar
  36. Kuznets, S. (1955): “Economic Growth and Income Inequality,” The American Economic Review 45(1), 1–28, http://www.jstor.org/stable/1811581.  Google Scholar
  37. Liu, Y./Amin, A./Rasool, S. F./Zaman, Q. U. (2020): “The role of agriculture and foreign remittances in mitigating rural poverty: Empirical evidence from Pakistan,” Risk Management and Healthcare Policy 13, 13–26, https://doi.org/10.2147/RMHP.S235580.  Google Scholar
  38. Masron, T. A./Subramaniam, Y. (2018): “Remittance and poverty in developing countries,” International Journal of Development Issues 17(3), 305–325. https://doi.org/10.1108/IJDI-04-2018-0054/FULL/XML.  Google Scholar
  39. Mercer-Blackman, V./Li, Y. (2021): “Six reasons why remittances soared in South Asia during COVID-19,” World Bank, https://blogs.worldbank.org/endpovertyinsouthasia/six-reasons-why-remittances-soared-south-asia-during-covid-19.  Google Scholar
  40. Musakwa, M. T./Odhiambo, N. M. (2019): “Impact of remittance inflows on poverty in Botswana: an ARDL approach,” Economic Structures 8 (42), https://doi.org/10.1186/s40008-019-0175-x.  Google Scholar
  41. Nahar, F./Nahar, F. H./Arshad, M. N. M. (2017): “Effects of Remittances On Poverty Reduction: The Case Of Indonesia,” Journal of Indonesian Economy and Business 32(3), 163–177, https://doi.org/10.22146/jieb.28678.  Google Scholar
  42. Najar, O./Pochet, C. (2021): “Remittances in South Asia, immune to Covid-19?” Ideas for Development, https://ideas4development.org/en/remittances-migrants-south-asia-covid/.  Google Scholar
  43. Ozturk, N./Karagoz, K. (2012): “Relationship Between Inflation and Financial Development: Evidence from Turkey,” International Journal of Alanya Faculty of Business 4(2), 81–87, http://www.ajindex.com/dosyalar/makale/acarindex-1423869086.pdf.  Google Scholar
  44. Paul, M./Sharma, P. (2019): “Inflation Rate and Poverty: Does Poor become Poorer with Inflation?” International Conference on Multidisciplinary Research (June 2018), 234–246, https://doi.org/10.2139/SSRN.3328539.  Google Scholar
  45. Pesaran, M. H./Shin, Y./Smith, R. J. (2001): “Bounds testing approaches to the analysis of level relationships,” Journal of Applied Econometrics 16(3), 289–326, https://doi.org/10.1002/JAE.616.  Google Scholar
  46. Rafiy, M./Adam, P./Bachmid, G./Saenong, Z. (2018): “An analysis of the effect of consumption spending and investment on Indonesia’s economic growth,” Iranian Economic Review 22(3), 753–766, https://doi.org/10.22059/IER.2018.66642.  Google Scholar
  47. Rasasi, M. al/Alzahrani, Y./Alassaf, M. (2021): “On the Causal Relationship between Household Consumption and Economic Growth in Saudi Arabia,” Business and Economic Research 11(2), 165–177. https://doi.org/10.5296/BER.V11I2.18386.  Google Scholar
  48. Ratha, D./Mohapatra, S. (2007): “Increasing the macroeconomic impact of remittances on development,” World Bank 3(1), 178–192.  Google Scholar
  49. Shahbaz, M./Islam, F. (2011): “Financial Development and Income Inequality In Pakistan: An Application Of ARDL Approach,” Journal of Economic Development 36(1), 35–58, https://doi.org/10.35866/CAUJED.2011.36.1.003.  Google Scholar
  50. Vacaflores, D. E. (2018): “Are remittances helping lower poverty and inequality levels in Latin America?” The Quarterly Review of Economics and Finance 68, 254–265, https://doi.org/10.1016/J.QREF.2017.09.001.  Google Scholar
  51. Wagle, U. (2016): “The role of remittances in determining economic security and poverty in Myanmar,” European Journal of Development Research 28(4), 536–554, https://doi.org/10.1057/EJDR.2015.14/TABLES/7.  Google Scholar
  52. Wagle, U. R./Devkota, S. (2018): “The impact of foreign remittances on poverty in Nepal: A panel study of household survey data, 1996–2011,” World Development 110, 38–50, https://doi.org/10.1016/J.WORLDDEV.2018.05.019.  Google Scholar
  53. Wooldridge, J. M. (2003): “Introductory Econometrics: A Modern Approach,” in: Economic Analysis (2nd ed., Vol. 2): South-Western Publishing Co., https://doi.org/10.1198/jasa.2006.s154.  Google Scholar
  54. World Bank (2020): “Global Action Urgently Needed to Halt Historic Threats to Poverty Reduction,” World Bank, https://www.worldbank.org/en/news/feature/2020/10/07/global-action-urgently-needed-to-halt-historic-threats-to-poverty-reduction.  Google Scholar
  55. World Bank (2022a): “Poverty Overview: Development News, Research, Data,” World Bank, https://www.worldbank.org/en/topic/poverty/overview.  Google Scholar
  56. World Bank (2022b): “South Asia Data,” World Development Indicators, https://data.worldbank.org/country/8S.  Google Scholar
  57. World Bank (2022c): “World Bank Open Data,” World Bank Database, https://data.worldbank.org/.  Google Scholar

Abstract

This research article delves into the intricate relationship between remittance inflows and poverty eradication in the South Asian region, spanning the years from 1980 to 2021. Employing the autoregressive distributed lags (ARDL) model methodology, this study investigates the multifaceted dynamics of remittances while considering key control variables, including inflation, trade openness, and economic growth. The findings of this study unveil compelling insights into poverty reduction. Remittance inflows emerge as a potent instrument in alleviating poverty, exerting a positive impact in both the short and long term. In contrast, an elevated inflation rate is found to exacerbate poverty levels within the region. Interestingly, trade openness emerges as a crucial driver of long-term poverty reduction, while the effect of economic growth on poverty mitigation remains negligible. Notably, this research stands as a pioneering effort within the South Asian context, employing the poverty headcount ratio with a $2.15 per day threshold to gauge poverty levels. The implications of these findings are substantial for policymakers. The study recommends a shift in policy focus towards encouraging investment-oriented utilization of remittances, emphasizing their potential to foster sustainable economic development beyond immediate consumption. Moreover, maintaining effective control over inflation rates over extended periods is deemed imperative for the region’s success in poverty reduction. Furthermore, policymakers are urged to formulate trade policies that favor small-scale entrepreneurs, fostering inclusive growth and contributing to the long-term goal of poverty eradication. In sum, this research advances our understanding of the complex interplay between remittances, inflation, trade openness, and economic growth in the context of poverty alleviation in South Asia. Its empirical insights provide valuable guidance for policymakers striving to forge a path towards a more equitable and prosperous future for the region’s inhabitants.

Table of Contents

Section Title Page Action Price
Imran Khan: “Being Poor Because of No Money”: Examining the Impact of International Remittance Inflows on Reducing Poverty 291
Abstract 291
1. Introduction 292
2. Theoretical Background 294
2.1 Literature Review 295
3. Data and Methodology 297
5. Conclusions and Policy Implications 305
6. Limitations and Future Work 306
References 306

Contact

Duncker & Humblot GmbH Carl-Heinrich-Becker-Weg 9 12165 Berlin, Deutschland T: +49 30 790006-0

Quick Navigation

2025 Duncker & Humblot GmbH

Powered by CloudPublish

We use cookies to ensure that you get the best experience on our website. Learn more about how we use cookies.