Remittances, Economic Growh, Inequality And Poverty: An Exploration Of The Linkages For Developing Asia
Author: Waqar Ahmed Qamar

The direct and indirect impact of remittances on growth, inequality and poverty has earned a consensus the world over. This study, using the annual data for twelve Asian developing countries, over time span of 1998-2013, gauges the linkages between remittance inflows, economic growth, inequality and poverty. Results from Generalized Method of Moments (GMM), applied on simultaneous equation model (SEM), exhibit that remittance inflows have statistically significant growth enhancing and poverty and inequality reducing effect in selected countries. We find a stronger direct poverty reducing impact of remittances. Most importantly, however, these gains are conditional on the level of financial market development. Additionally, the poverty reducing impact of remittances is conditional on remittances-inequality nexus and the remittances reduce poverty only when they are found cutting inequality down. Remittance inflows are found reducing the income inequality. Evidence also suggests that, remittances serve as the substitute to credit constraints. Finally we find that remittances are primarily sent for altruistic motives (meeting daily routine expenditures). The study recommends that remittance inflows should be channelize through formal sources. For effective use of remittance inflows, governments of the respective countries (through collaborating with financial institutions) should ease the process of sending and receiving remittances through developed banking sector Supervisor:- Dr. Sajid Amin Javed

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Keywords : Developing Asia, Economic Growth, Inequality And Poverty, REMITTANCES
Supervisor: Sajid Amin Javed

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