Impact of Remittances on Economic Growth and Poverty Alleviation in Pakistan
Author: Saleem Dilawar

The direct and indirect impact of remittances on economic growth and poverty has earned a consensus the world over. There are conflicting views on the impact of remittances on economic growth and poverty alleviation, some studies supports the positive impact of remittances on economic growth and poverty alleviation mainly through the channel of enhancing the investment on Physical and Human capital while few studies supports the adverse impact of remittances on economic growth and poverty of the recipient economy primarily through reduction in labor supply and loss of skilled and efficient human capital, decreases investment as remittances are mainly use for consumption, causing Dutch disease which cause exchange rate appreciation and uplift inflation. Keeping in the view the contradictory literature about the impact of remittances on economic growth, this study aims to provide better and comprehensive understanding of how remittances impact economic growth and poverty. By applying time series data in case of Pakistan, analysis has been done over the period of 1980-2018. Autoregressive Distributed Lag (ARDL) is employed to examine the relationship of remittances with economic growth and poverty alleviation. The results show that remittances have positive and statically significant impact on economic growth and poverty alleviation in case of Pakistan. These results suggest that the government should take valuable steps to put in place an effective, improved and advance financial system to promote remittances through formal sector and policy aimed at promoting productive and valuable use of remittances like investment in education sector to promote human capital development Supervisor:- Dr. Ayaz Ahmad

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Keywords : Economic Growth, Poverty, Poverty Alleviation in Pakistan, REMITTANCES, Remittances on Economic Growth
Supervisor: Ayaz Ahmad

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